Qantas opposed the Qatar bid saying it could prevent other carriers from coming back to the Australian market. Mr Joyce also said Qatar did not need extra flights to increase its capacity into Australia because it was free to fly to other cities, such as Adelaide, or to fly bigger planes.
But Ms Hrdlicka called that an “obfuscation”. “You need to add seats where the demand exists, it’s a bit of an obfuscation to say fly into cities where there is no demand,” she said.
Virgin said Qantas and its partner, the state-owned Emirates, dominate flights into Europe and the Middle East with a 43 per cent market share.
Virgin and its partners hold a 23 per cent share and adding Qatar’s additional four services would increase this to between 25 per cent and 27 per cent.
Ms Hrdlicka said that Qatar’s flights would mean a big reduction in fares, suggesting they could fall by at least a third, maybe 40 per cent.
She said Virgin sought a meeting with the government to discuss the implications of the decision for her airline, which plans a float next year and had planned a strategic tie-up with Qatar. It has yet to receive a response.
Flight capacity below pandemic levels
Qantas reported a record $2.5 billion profit last week including a rise in group profit margins to 12 per cent, from 8.3 per cent before the pandemic, and a surge in the profit margin on domestic flights to 18.3 per cent from 12 per cent.
At the Senate hearing, from left Qantas head of corporate affairs Andrew McGinnes; CEO Alan Joyce and Jetstar CEO Stephanie Tully. Eamon Gallagher
Mr Joyce told the inquiry on Monday that Qantas – with its Jetstar subsidiary – was operating at 80 per cent of its pre-COVID capacity internationally and should be at 100 per cent before the middle of next year.
Ms Hrdlicka said the aviation industry needed to be doing everything to add flight capacity back to pre-pandemic levels and to bring down fares and support local tourism.
“Two thirds [of flights] are back, one third is not back,” she said.
The recovery depended on 100 per cent of the seats pre-pandemic coming back, but that might not be the case.
“The reality is that many of the airlines that provided those seats into Australia won’t recover,” Ms Hrdlicka said.
Her comments echo those made by the managing director of the Board of Airline Representatives Australia Stephen Pearse, who has said capacity in Australia had come back slower than in other countries.
Ms Hrdlicka called on the government to open a dialogue after comments from assistant treasurer Stephen Jones that the government should make sure Qantas is profitable “in the national interest.”
“Let’s put the facts on the table let’s make sure we’re clear about what national interest means,” she said.
Political calls mount
ACT Senator David Pocock said the federal government needed to do more to foster competition across the broader economy, including in banking, supermarkets and aviation.
He said Labor should re-examine the Qatar decision, which he argued did not appear to make sense for consumers.
“This is something that the government needs to step up… to ensure there is more competition across airlines,” senator Pocock said.
Teal independent Kate Chaney said she understood the need for countries to protect their national airlines, but said it did not make sense when Qantas was charging consumers more and flying less.
