Surprising: Qatar Airways & Virgin Australia Launch Partnership

Surprising: Qatar Airways & Virgin Australia Launch Partnership

19

This certainly came out of left field.

Details of new Qatar Airways & Virgin Australia 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 to 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?

Conversations (19)
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  1. Ruka Guest

    Here's to our partnership $40 for you and me.
    https://www.rakuten.com/r/GOODWO139

  2. Andy Diamond

    This was only one of two possible options for QR, given the recently extended cooperation of Qantas with Emirates. The other one would have been Rex.

    So the question should rather be, why did Qantas select Emirates and not QR as their partner in the Middle East?

  3. Brianair Guest

    Weird how Qantas partners with both Qatar and Emirates at the same time, and how between them, the alliance partner is their weaker partner. Why and how did they get so close to Emirates in the first place?

  4. Morgan Gold

    Very interesting news but this is good news for us Australian consumers

  5. platy Guest

    @ Lucky

    To note - elsewhere it is being claimed that there will also be facility to redeem on the other airline (not just earn).

    In support of that expectation, here is a quote from the email I received yesterday from the CEO of Virgin Australia:

    "Reward Seat availability is another fantastic benefit of this new partnership, and you’ll be able to use your Velocity Points to book Economy, Business and First Class seats, including...

    @ Lucky

    To note - elsewhere it is being claimed that there will also be facility to redeem on the other airline (not just earn).

    In support of that expectation, here is a quote from the email I received yesterday from the CEO of Virgin Australia:

    "Reward Seat availability is another fantastic benefit of this new partnership, and you’ll be able to use your Velocity Points to book Economy, Business and First Class seats, including Qatar’s renowned Q-Suite (available on select flights), throughout their expansive international network."

    This is a huge game changer for Australian frequent flyers.

    VA points can be earned a lot faster than QF points on groceries, flights, etc. These are spend will accrue much higher points totals on everyday spend. Bonus points transfers are sometimes also better (e.g. from Citibank during promotions).

    QF has the edge with some earn opportunity, such as wine purchases.

    IME Qatar offers far more premium reward seats to partners than Emirates to Qantas. That will Gove VA the edge.

    Emirates has added prohibitive carrier charges to premium rewards, destroying the value of arguably the most attractive benefit of QF FF, the ability to redeem for EK premium.

    VA is already offering better business class availability on Singapore Airlines than some other Star Alliance partners (but not as good as KrisFlyer itself).

    Short haul Avios rewards on domestic business class in Australia can be half the cost levied by QF on QF metal (check out MEL-PER for example).

    I am not a fan of the VA EO, but this one made me sit up and take notice.

    Now add the next step of integrating ANA and QF have some very serious competition for the attention of the erudite frequent flyer.

    Meanwhile business class fares on VA are a fraction of the price of QF (albeit for arguably a lessor product with fewer lounges).

  6. philelltt Member

    Both Qantas and Virgin are linked to the 2 major retail chains in Australia through loyalty schemes. Typically I get $10 worth of points for $50 grocery or wine purchase. Using their almost daily promotions. More if I use a linked credit card. I can transfer those points to the relevant airline or buy tickets on any airline through their travel store. The Virgin Velocity scheme allows you to transfer points to a range of...

    Both Qantas and Virgin are linked to the 2 major retail chains in Australia through loyalty schemes. Typically I get $10 worth of points for $50 grocery or wine purchase. Using their almost daily promotions. More if I use a linked credit card. I can transfer those points to the relevant airline or buy tickets on any airline through their travel store. The Virgin Velocity scheme allows you to transfer points to a range of airlines. But never as good as the supermarket option.

  7. JPC Guest

    First step towards a QR stake in VA?
    Very happy with this move regardless

  8. RichM New Member

    This puts us Australians in a potentially interesting position re frequent flyer schemes.

    Most Australians will be members of Qantas Frequent Flyer and/or Virgin Australia Velocity.

    However, it seems that by being an elite member of Qatar's Privilege Club, we could potentially get access to lounges and other elite benefits for both Virgin and Qantas out of a single loyalty programme.

    Time will tell whether this is actually feasible, but certainly food for thought.....

    This puts us Australians in a potentially interesting position re frequent flyer schemes.

    Most Australians will be members of Qantas Frequent Flyer and/or Virgin Australia Velocity.

    However, it seems that by being an elite member of Qatar's Privilege Club, we could potentially get access to lounges and other elite benefits for both Virgin and Qantas out of a single loyalty programme.

    Time will tell whether this is actually feasible, but certainly food for thought.....

  9. Nate nate Guest

    "for example, Virgin Australia dumped Delta in favor of United, given that the latter has a bigger network in Australia"

    Do you mean bigger network TO Australia? Or does UA have domestic flights down under?

  10. Sibelius Guest

    The most intriguing thing about all this is that I’ll be able to earn Avios on Virgin Australia, and then use those Avios on Qantas award flights!

  11. Jesper Guest

    Isn't Qantas still sleeping with the enemy?

    Partnership with Emirates.....

    1. Phillip Member

      Exactly! Which is why I’m surprised so many are saying this is a confusing/surprising move! Isn’t it obvious that QR have long been unhappy about the QF and EK relationship when QF could have done the same with QR instead? Plus, QR have also long complained about access to the Australian market. Don’t forget QR have stakes in IAG/BA and we know BA and QF fell out just before the QF/EK partnership!

  12. Mike C Member

    @Ben, you might want to change Virgin Atlantic in the 'In this Post' box and in the first header to Virgin Australia.

  13. St James Guest

    It's only official once His Excellency proclaims the purpose of the exercise is to rub salt into the wound of Qantas.

  14. Steven E Guest

    It’s all very strange - now Qatar and Virgin - VA clawing to be relevant

  15. Willem Guest

    I’d love to see Qatar help Virgin Australia eventually bring back their A330s or even their 777s, will miss the competition they put up against Qantas to LAX in particular

  16. AussieJosh Guest

    One thing that makes this all a bit stranger is that Virgin Australia already has a reciprocal earn and burn relationship with Etihad. So both VA and QR already have redundant partners offering the same connectivity

    1. ConcordeBoy Gold

      Etihad continues to slash their network, and are a shell of their former self. Qatar is far larger in breath of destinations and services than EY at this (and really) any point.

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Jesper Guest

Isn't Qantas still sleeping with the enemy? Partnership with Emirates.....

2
Phillip Member

Exactly! Which is why I’m surprised so many are saying this is a confusing/surprising move! Isn’t it obvious that QR have long been unhappy about the QF and EK relationship when QF could have done the same with QR instead? Plus, QR have also long complained about access to the Australian market. Don’t forget QR have stakes in IAG/BA and we know BA and QF fell out just before the QF/EK partnership!

1
RichM New Member

This puts us Australians in a potentially interesting position re frequent flyer schemes. Most Australians will be members of Qantas Frequent Flyer and/or Virgin Australia Velocity. However, it seems that by being an elite member of Qatar's Privilege Club, we could potentially get access to lounges and other elite benefits for both Virgin and Qantas out of a single loyalty programme. Time will tell whether this is actually feasible, but certainly food for thought.....

1
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