May 18, 2022

This certainly came out of left field.

Details of new Qatar Airways & Virgin Atlantic strategic partnership

Qatar Airways and Virgin Australia have announced plans to launch a strategic partnership around the middle of 2022 (the exact date hasn’t yet been revealed). With this new partnership, Qatar Airways passengers will get access to 35 Virgin Australia destinations across Australia, while Virgin Australia passengers will get access to more than 140 Qatar Airways destinations worldwide.

This partnership will include:

  • A codeshare agreement, whereby passengers will be able to seamlessly book itineraries that include travel on both airlines
  • Reciprocal points earning opportunities, meaning that Qatar Airways Privilege Club members can earn Avios when flying on Virgin Australia, and Virgin Australia Velocity members can earn points when flying on Qatar Airways
  • Reciprocal elite perks, including lounge access, extra baggage allowance, priority check-in, priority boarding, priority baggage delivery, and more

Here’s how Qatar Airways CEO Akbar Al Baker describes this new partnership:

“We have a strong, long-standing relationship with Australia and this agreement with Virgin Australia comes at a time when it is needed the most. This partnership will give Australian passengers access to the world that they have so acutely missed these past two years, to be able to reconnect with family and friends, and keep the wheels of trade moving.”

Here’s how Virgin Australia CEO Jayne Hrdlicka describes this new partnership:

“Today is more great news for Virgin Australia and Velocity Frequent Flyer members who are hungry to travel internationally. We are incredibly focused on creating great travel experiences and our new partnership with Qatar Airways will significantly expand Virgin Australia’s footprint into the Middle East, Europe and Africa, offering hundreds more ways our guests can seamlessly see the world.”

Qatar Airways is picking up a new partner in Australia

But what about Qatar Airways & Qantas?

Typically airlines form partnerships to fill a network gap that isn’t currently served, and that’s also what makes this partnership so interesting. Qatar Airways and Qantas are both part of the oneworld alliance, so Qatar Airways passengers already have access to an extensive network in Australia, reciprocal points earning and elite perks, and more.

From Virgin Australia’s perspective this partnership makes perfect sense:

  • Virgin Australia has discontinued long haul flying, so the airline is now focused on short haul flying; forming partnerships with as many long haul carriers as possible makes sense, as it’s a way to fill seats
  • Virgin Australia doesn’t belong to any major alliance, and especially since emerging from bankruptcy protection, the airline seems to be open to just about any partnership that makes sense (for example, Virgin Australia dumped Delta in favor of United, given that the latter has a bigger network in Australia)
  • While Virgin Australia also partners with Etihad Airways, Etihad isn’t nearly as big as Qatar Airways, and there are also several airlines that partner with both Etihad and Qatar
This partnership makes sense for Virgin Australia

From Qatar Airways’ perspective this partnership is a bit more confusing. Virgin Australia doesn’t offer much service that existing partner Qantas doesn’t offer, so the value-add for frequent flyers is fairly limited. What’s the motive for Qatar Airways, then? The way I view it, there are a few possible explanations (or perhaps it’s a combination of these factors):

  • Airlines are ultimately free to form their own partnerships beyond alliances; for example, Qantas and Emirates have long had a partnership, so Qantas’ relationship with Emirates has been closer than its relationship with fellow oneworld member Qatar Airways
  • In general there has been some bad blood between Qatar Airways and Qantas; back in the day when Al Baker was threatening that Qatar Airways would leave oneworld, Qantas CEO Alan Joyce basically encouraged him to do so
  • I suppose from Qatar Airways’ perspective, if there’s not a non-compete clause, the airline might as well form partnerships with as many Australian airlines as possible, as that will just lead to more passengers connecting onto Qatar Airways flights
  • I wonder if Qatar Airways’ terms with Virgin Australia are simply better than with Qantas, in terms of revenue sharing, cost of providing reciprocal benefits, etc.; I guess we’ll see based on how booking options are prioritized
  • There definitely seems to be a bit of shade in all of this, as Qatar Airways refers to Virgin Australia as “Australia’s most loved carrier”
Qatar Airways already has a partnership with Qantas

Bottom line

Qatar Airways and Virgin Australia have announced a new partnership, which will launch around the middle of 2022. This will include a codeshare arrangement, and reciprocal points earning and elite benefits.

What makes this so interesting is that Qatar Airways and Qantas are both part of oneworld. Typically new partnerships are formed in underserved markets, but that’s not really the case here. I’m curious to see how this plays out, and what this means for the relationship between Qatar Airways and Qantas.

What do you make of the new Qatar Airways and Virgin Australia partnership?

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