Virgin Australia boss exposes the real reason airfares are so high in Australia

Virgin Australia’s CEO has criticized the government for preventing Qatar Airways from operating more flights to Australia amid claims Qantas was demanding the ban.

In a private video message to staff leaked to Daily Mail Australia, Virgin boss Jayne Hrdlicka denounced the move, blaming a lack of competition for soaring airfares.

She said passengers had to pay more due to the limited number of international flights in and out of the country, which has doubled ticket costs.

And she said the Australian economy also suffered as fewer tourists entered the country due to the lack of passenger seats and high prices.

Approving additional flights via Qatar could improve the situation immediately, she said, but the request had been rejected by the federal government.

“We are deeply disappointed,” she told employees in the personal videogram to company staff.

“Qatar is one of the few airlines in the world to be able to operate four additional flights a day to Australia overnight.

And for some reason they were refused. There is no understandable reason why they were denied these rights.’

Qatar Airways’ additional flights – as a gateway to the rest of the world – had been approved by all relevant government departments, it was reported on Friday.

But Qantas boss Alan Joyce wanted it vetoed, and Prime Minister Anthony Albanese’s government cabinet blocked it.

“That’s the influence that Alan Joyce has,” says a source The Australian.

The prime minister has previously faced outrage after his son Nathan, 21, and girlfriend Jodie Haydon were given free membership to the prestigious Qantas Chairman’s Lounge.

Transport Minister Catherine Knight blocked the 28 extra flights to Qatar earlier this month, telling Parliament it was ‘not in the national interest’.

But she denied the decision gave Qantas an unfair advantage, saying it was an “unfair characterization.”

She also denied it was related to outrage over the forced gynecological examination of thirteen female airline passengers by Qatari authorities investigating the discovery of the body of a newborn baby in a garbage can at Doha airport in October 2020.

Mr Joyce on Thursday defended Qantas’ opposition to Qatar’s proposed expansion into Australia at his airline’s $2.5 billion earnings announcement Thursday.

“What we said when it came to Qatar… was that rights should not be granted if a huge amount of capacity is put back on the market,” he said.

“Doubling those rights (for Qatar) could actually disrupt the market and that turns out to be correct, because the capacity has actually doubled in that time.

“From July 1 this year to June 30, 6.4 million seats will be added to the international capacity.”

He said the government dictated the right of entry into countries and “considered many considerations.”

He added, “There are many reasons the government would consider granting or not granting rights.”

Qantas is connected to Qatar Airways through the Oneworld Alliance of airlines, but does not list its name or logo on its website, alongside its 25 other international Oneworld or partner airlines.

The flag carrier partners on many of its international routes with UAE-based airline Emirates, Qatar Airways’ Middle East rival, while Virgin Australia has an official affiliation with Qatar.

“(Qatar Airways) is our partner,” Ms Hrdlicka said in her message to staff at Virgin Australia’s Brisbane headquarters. “They have served Australia well during Covid.

“More importantly, they give us the opportunity to bring additional inbound traffic to Australia for much-needed international tourism.”

She said opening the routes further would have an immediate impact on air fares.

“The central theme is that airfares in Australia are simply too high for international travel,” she said. ‘The prices are determined by the amount of available capacity.

“And between Australia and Europe there is not enough capacity and prices are twice as high as in 2019. Now they are still 50 percent higher.”

She said the additional flights to Qatar would bring the Australian economy an additional $500 million a year from increased foreign tourism.

“Usually that goes to small and medium-sized businesses across the country, many of whom are based in Queensland,” he said.

“Tour operators will tell you that they are really hungry to get international tourists back because they spend their money differently than we would when traveling domestically.

$500 million out of the economy in this decision means fewer jobs, fewer opportunities and a denial of growth for a part of the economy that has suffered most from Covid.

So we’re disappointed and we’ll continue to work hard to make sure there’s a path in place to make this happen.

“Qatar is a great partner for Australia, they are a great partner for Virgin Australia and their inbound tourism naturally fills our planes.

“So it’s important for all of us.”

Ms Hrdlicka ran Qantas budget carrier Jetstar from 2012 to 2017 and answered Mr Joyce’s questions.