Virgin boss says Qatar decision is keeping international airfares high

virgin

Virgin Australia CEO Jayne Hrdlicka has added her voice calling on the federal government to reconsider allowing Qatar Airways to bring additional flights into Australia, saying it could reduce airfares by as much as 40 per cent.

Qantas boss Alan Joyce faced a grilling at a Senate committee hearing yesterday where he supported the decision to bar Qatar from adding extra flights, saying it would create a market distortion.

“Granting a carrier doubling their traffic rights in the short term would cause distortion,” Joyce said.

“A lot of capacity is being added to the market and it‘s going to be significant over the next year, and that will bring down airfares quite considerably.”

But Hrdlicka dismissed Joyce’s assumption, saying “you need to add seats where the demand exists”.

“The constraints are in these major capital cities and that’s where the seats need to come and that’s what Qatar has applied for,” she told ABC radio.

“It‘s also a bit of a nonsense to say it’s a market distortion when there’s such little capacity that’s recovered.”

Hrdlicka said airfares were currently “abnormally high” at around 50 per cent more than pre-covid.

“The statistics say two-thirds of the seats that were flying in and out of Australia pre-Covid are back and one-third of those seats are not yet back,” she said.

“And so if we get those seats back, airfares will be as low as they possibly could be. I guess that would be a reduction of at least a third, maybe 40 per cent reduction in airfares.”

Many are seeing the government’s decision, described as “in the national interest”, as a way to pick winners in the aviation sector.

“I would just encourage the government to step back and say, let‘s get all the facts on the table and understand what’s actually in the national interest,” said Hrdlicka.

“There’s over $500 million in economic interest at stake here for the tourism industry — that’s a lot of jobs.”