Etihad Airways pulls the plug on Virgin Australia partnership
The Gulf carrier is the first to go, as Virgin Australia reshapes its international partner network.
By David Flynn, November 18 2024
Virgin Australia’s long-standing Etihad Airways partnership is officially coming to an end in June next year, paving the way for Qatar Airways’ proposed 25% investment in Virgin.
A statement from Etihad says the decision “reflects a divergence in the strategic direction of the respective airlines,” confirming the end of a codeshare and frequent flyer partnership between the carriers from June 1, 2025.
While the move comes as no surprise, it does feel premature, as Virgin and Qatar Airways’ filings to the Foreign Investment Review Board and the Australian Competition and Consumer Commission (ACCC) for a “proposed integrated alliance” are yet to be approved.
Of course, the ACCC application (click here to download a pdf copy) does paint a rather vivid picture of how the tie-up would impact Virgin’s relationship with Etihad Airways and Singapore Airlines.
“Qatar Airways will become Virgin Australia’s exclusive interline, codeshare and loyalty partner headquartered in the Middle East or Türkiye (excluding interline for passenger re-accommodation purposes),” the application reads.
In addition, the application states “Virgin Australia will not codeshare on the international flights of other airlines to, from or within the Middle East, Europe, and Africa.”
While there’s as yet no official word from Singapore Airlines, this appears to restrict Virgin’s Singapore Airlines codeshare flights to Asia and India, while Qatar Airways would be the sole VA partner for travel across Europe, the UK and Africa.
Included in the ACCC document is a map showing an ‘overview of Virgin Australia’s partner network’ showing how Virgin’s international network would be redrawn under its Qatar Airways alliance.
An extract from the Virgin Australia & Qatar Airways submission to the ACCC.
Virgin may also cut its ties with South African Airways, based on paragraphs citing that Virgin would not “codeshare on the international flights” or “supply any loyalty point accrual services or high value guest services” with any airline in Africa.
As previously reported, Qatar Airways plans to provide jets and crew to Virgin Australia so that Virgin can run daily flights from Sydney, Melbourne, Brisbane and Perth to Qatar’s Doha hub as early as mid-2025.
The partnership between Virgin Australia and Qatar Airways will also be strengthened to add benefits including increased earning of Velocity Points and status credits and greater availability of points-based “redemption opportunities”, the airlines have promised.
Additional reporting by Chris Ashton.
27 Feb 2014
Total posts 6
Doesn't this also mean that Virgin Atlantic has to be dropped as a partner as their services are to and from Europe? As a European-based airline they would now be excluded from points accrual?
Qantas - Qantas Frequent Flyer
14 Apr 2014
Total posts 45
Removal of “high value guest services” from “airline headquartered in Europe” reads to me like this kills Virgin Atlantic lounge access too.
Virgin Australia - Velocity Rewards
24 Jan 2018
Total posts 773
Good question. VR's Clubhouse lounges require a J-class fare for access (as best I recall, VA Platinum doesn't cut the grade, but I may be wrong). Below Clubhouse, is the No.1 Lounge - never been there (yet).
Virgin Australia - Velocity Rewards
24 Jan 2018
Total posts 773
Parting ways with EY comes as no surprise, but to even slightly singe the VA-SG relationship is a cause for concern. I'm beginning to worry that what's good for Bain and QR may not be that good for VFFs, but happy to be fair and let time tell me otherwise (though when it does, it will tell quickly).
18 Sep 2015
Total posts 140
Virgin Atlantic is headquartered in England, which is not part of Europe. Remember Brexit?
05 Feb 2022
Total posts 5
Europe is a continent, a place on planet Earth. Political agreements, such as the European Union, don't change the location of a country :)
18 Sep 2015
Total posts 140
That's the entire point. The location of England is that it is part of an island in the Atlantic, not part of the continent of Europe. It is neither geographically or politically a part of Europe.
Virgin Australia - Velocity Rewards
12 May 2022
Total posts 15
Exiting the European Union doesn't change its location on the map, completely different, England is in Europe no matter what political changes occur.
22 Sep 2017
Total posts 96
Seems like this would be a substantial lessening in competition in the market for international services to Australia. The inability to interline or code-share would limit any other carrier's ability to serve customers outside the main cities. For example they could not sell a single-ticket trip to Europe from Townsville or wherever via Virgin, leaving them negotiating with Qantas in a monopoly position. Given how precious the regions are, I can see this becoming a hot topic in both the ACCC and political arena.
QF
11 Jul 2014
Total posts 1024
Current cost of a return ticket business class to Europe is $10k was $5.4K with Singapore. Cost with Qatar is around $28k from what I found. I can’t see people paying extra for any seats and I’ll also mention Turkish Airlines with there around the world ticket business class for $7.8k
Virgin Australia - Velocity Rewards
12 May 2022
Total posts 15
I'm seeing business to MEL to LHR from $5800 with Qatar Airways each way in August. Only looking then as I am considering a booking. Not too bad price wise.
QF
11 Jul 2014
Total posts 1024
Pre covid, Singapore Air had return for around $5,500.00.
05 Mar 2015
Total posts 422
Very predictable when you think about it. VA being equally allied to both EY and QR was always odd. But this latest move shows the shortcomings of Virgin's 'DIY alliance' model in how it has to accommodate different partner airlines. A big loss for VA flyers who value Etihad and SQ, use their award seats etc.
Qantas - Qantas Frequent Flyer
04 Nov 2017
Total posts 351
VA cutting off what's left of the partnership with EY comes as no surprise to most, but SQ being blocked from Europe is definitely a QR move to take exclusivity on the European and African corridors.
Considering according to the AFR that SQ was approached by Bain reps and had declined interest for a cornerstone stake in VA again, this would've had been predicted once they were in negotiations with QR. Seems SQ was not interested in burning billions at the Australian domestic market again after their Air New Zealand (Ansett), Tiger and Virgin 1.0 disasters.
QF
11 Jul 2014
Total posts 1024
I’m sure there would have been a bidding war if SQ did offer a price, I normally bid even if not interested just to drive the price up or get it at a discount.
22 Sep 2017
Total posts 96
SQ has little need of a feeder network, they cover about 80% of Australia’s population directly, so the market for the other 20% travelling to Europe is quite small.
The VA-QR alliance has a bigger impact on all the lesser-travelled Kangaroo route alternatives who might only have a couple of points of presence in Australia, so they need to deal with QF for a domestic leg without any alternative or bargaining power.
20 Sep 2024
Total posts 8
December 11 20
@ russh7
Agree with you on your post. Below is an excerpt from Gert-Jan de Graaff, CEO of Brisbane Airport.
December -11 -2024
Gert-Jan de Graaff, CEO of Brisbane Airport, welcomed the increased capacity, saying SIA is a vital link in Queensland’s air connections to Europe.
“When you think about it, 25 flights per week into Brisbane is quite incredible. That’s 2600 services in and out of BNE each year, with the potential to move 787,800 people or fill Suncorp Stadium 15 times.” No wounder there voted number 1 airline .
28 Sep 2022
Total posts 24
Not great news, I love flying SQ and EY - and in particular using the first class EY lounge, which in my opinion while smaller than EK one, is much nicer and more private.
I have no doubt that QR will not extend the same privilege to VA platinum members, and so I really see this as a significant diminishing of the benefits of VA.
With Turkish making big inroads into Australia, maybe star alliance would be better, and then it's just a matter of figuring out whether to go with Turkish or Singapore loyalty program - I guess SQ would be better for now as it's already quite established in Australia.
Qantas - Qantas Frequent Flyer
30 Mar 2015
Total posts 14
I hope I can continue to access va lounge with my sq pps. Otherwise it’s back to Qantas. Sigh.
04 Sep 2019
Total posts 66
time to transfer your VA points to SQ if thats what you stockpile them for. Never know whats around the corner on that alliance perk
Qantas - Qantas Frequent Flyer
04 Nov 2017
Total posts 351
There is also the potential that "Krisflyer/Velocity" transfer could be devalued in favour of a 'new' "Velocity/Avios" transfer program under the incoming new part owners.
QF
11 Jul 2014
Total posts 1024
I wonder what the percentage of air travel will be through the G (ulf) Spot after QR and VA get together?
Virgin Australia - Velocity Rewards
24 Jan 2018
Total posts 773
Good question (curious delivery notwithstanding). The progeny of this QR-VA union will rely heavily upon the transfer pricing of fares between QR and VA. And given the 25% equity position, QR could be forgiven for wanting to steal market share from the rainbow kangaroo (including former finance-media journalists trying their hand at books?). But, hey, that's Karma for you.
08 May 2020
Total posts 90
Interesting how long the Singapore Airline relation ship will last as it is my preferred Airline to Europe. So what I can read that will not be beneficial on Virgin benefits. All is already lost with Virgin travelling to New Zealand with no beneficial way with Virgin. Queenstown is not an option for my need. Yes Virgin points may need to be transferred to SQ .
QF
11 Jul 2014
Total posts 1024
I wonder if Alaskan / Hawaiian buy 25% of Virgin to secure the USA and Canada? Remember Jayne was / is a board member of Hawaiian.
Qantas - Qantas Frequent Flyer
04 Nov 2017
Total posts 351
The Hawaiian board members which include Jayne will cease to be board members once HA/AS achieve a Single Operating Certificate. I'd also tip there's a better chance of UA being a darkhorse to buy a minor stake (say 10%) instead of AS (a partner of QF) getting involved in QF's rival.
QF
11 Jul 2014
Total posts 1024
Alaskan is a better fit I think, being in Seattle a couple of months ago talking to a few people it would be an amazing tie up. And on a side note, you gotta love how patriotic they are in the US. USA flags the size of hangers everywhere.
11 Sep 2015
Total posts 228
I can't see that happening at all, as mentioned below, the Hawaiian board is on the way out, plus it doesn't seem to make sense that Alaska would invest in Virgin when it has closer ties to Qantas & OneWorld.
Virgin Australia - Velocity Rewards
24 Jan 2018
Total posts 773
It's now looking like Alaskan paid a HUUUUUUGGE premium (US$18/share) compared to true market value (US$5-10) for Hawaain, so I'd imagine they're focused on cost cutting there within the constraints imposed by the regulator, no time to consider the Australian market.
Virgin Australia - Velocity Rewards
23 Aug 2016
Total posts 5
The potential for flight to / from Doha to Cairns is a massive win!
"...flights between Doha and other non-gateway ports, such as Canberra (which Qatar Airways has previously serviced), Cairns, Darwin (during peak seasons)..."
21 Apr 2019
Total posts 22
I wonder if VA J/C on their limited 737 routes will be able to use Qatar lounges.
QF
11 Jul 2014
Total posts 1024
Ok, another Exclusive Bet by UpUpandAway, because I was the first to pick the Qatar - Virgin Tie Up all those years ago (2019 I think).
My next bet/tip is Alaskan buying into Virgin for flights to the USA and Canada which includes Hawaii!!!
Qantas - Qantas Frequent Flyer
04 Nov 2017
Total posts 351
There's a better chance of UA buying a stake into Virgin than the Alaska Airlines Group (which includes Hawaiian and Horizon), who is a major partner of the Qantas group.
16 Jan 2019
Total posts 4
Hope that Qatar airlines can wet lease their aircraft to Virgin which will give them the opportunity to build more international routes such as Bangkok. QF and Thai dominating with inflated prices doesn't give other airlines many opportunities. Hope more airlines did a Bangkok stop over rather than boring expensive Singapore.
Virgin Australia - Velocity Rewards
11 Dec 2016
Total posts 74
While the Etihad partnership is an obvious loser in the Qatar/Virgin deal. As they're a direct competitor that I don't think the ACCC will be too fussed about.
I think they will be more concerned about the lose of Sia and South African airways as a partner. It also effectively rules out the option of VA eventually getting into Star Alliance which they have obviously been working towards for some time.
ACCC will be critical of this I think and hope.
Qantas - Qantas Frequent Flyer
04 Nov 2017
Total posts 351
As mentioned above, SQ are mostly unaffected except for the cessation of codeshares between SIN and Europe/UK. VA/VFF can still redeem for redemption seats on SQ with the appropriate lounge access included.
VA hasn't shown any interest into joining Star Alliance at all under Bain's ownership, if they had thought *A membership had increased their ROI as well as bring in hundreds of millions in revenue after running the numbers, Bain would've applied on behalf of VA a long time ago.
30 Aug 2019
Total posts 30
In Virgin’s response to the ACCC today, they confirmed no changes to South African Airways or Virgin Atlantic arrangements.
Velocity members will still be able to earn status credits and earn and redeem points on Singapore Airline services to and from Europe, UK and Africa. The only thing changing is Virgin won’t codeshare on SQ’s services to Europe, UK, Middle East and Africa.
All in all, with the exception of the Etihad alliance ending and VA’s code not on SQ’s services as mentioned above, Velocity members have little reason to be concerned.
06 Feb 2014
Total posts 30
Not great to see the changes to the SQ relationship that this seems to suggest, but not surprising either given the ambitions of Qatar Airways more broadly.
26 Dec 2018
Total posts 2
Any ideas on existing EY bookings made before 1 June 25 and flown after? Would they still earn any VFF? Can't seem to find a definitive answer online other than
From 1 June 2025, Etihad’s customers will no longer be able to book Virgin Australia-operated flights through Etihad booking channels. Velocity Frequent Flyer and Etihad Guest members will also no longer be able to redeem or earn points or miles on the respective partners. However, existing bookings under the partnership will be unaffected.
Qantas - Qantas Frequent Flyer
04 Nov 2017
Total posts 351
They'll honour the bookings made before June 2025 and flown after the end date, but there will eventually be an end date for those bookings made before June and booked after that (I'd assume a 4-6 month cutoff).
09 May 2020
Total posts 574
Sounds like QR and SQ are essentially on different price point and hardware/software mix so the SQ long haul business to EU may not take that much of a hit from the QR-VA relationship but presumably trying to use VA privileges and point/status earning arrangements to fly to EU/UK with SQ on a single itinerary/PNR will be a PITA to do, maybe the PNRs can be linked at the SQ check-in counter
29 Jan 2012
Total posts 184
This may be a big mistake for Virgin long term, and perhaps just focus and strengthen their local network, otherwise they may go the way of Ansett just like when they tried to become a global player. Virgin is too small a player to keep up with the big boys and their international arrangements.
Qantas - Qantas Frequent Flyer
04 Nov 2017
Total posts 351
VA are "strengthening" their local network, as largely a feeder for QR, as well as SQ in Asia and UA in North America.
Note that VA's "international" network is entirely on 737 metal and is largely 'leisure focused' limited to Bali, Fiji and the Pacific Islands. Whilst the "long haul" staff is left largely to codesharing on the three carriers mentioned above.
With QR in the box seat to take the 25% stake in VA, it's also likely they'll remain independent of the Global Alliances for the foreseeable future (unless if QR are sure that having a foot in two camps (Oneworld and Star) is sure to bring in hundreds of millions of revenue for the wider QR group which would include their stakes in IAG (BA, IB) and their pending stake in VA).
Hi Guest, join in the discussion on Etihad Airways pulls the plug on Virgin Australia partnership