Virgin Australia wants to deepen its relationship with its newest bestie Qatar Airways at the expense of Etihad Airways. Virgin Australia has applied to vary permission to cease selling seats on some Etihad-operated flights between Australia, Milan, Rome, and Paris and to start selling seats to the same cities on Qatar-operated flights. The switch marks a downgrading of a longstanding relationship between Virgin Australia and Etihad and an upgrading of the new friends of convenience relationship going on between Virgin Australia and Qatar Airways

Etihad gets the Virgin Australia cold shoulder

The Australian Government agency that manages airline capacity according to existing air services agreements, the International Air Services Commission (IASC) received applications from Virgin Australia earlier this week to vary their rights on these country pairs. Virgin Australia has asked permission to sell tickets on some Qatar Airways-operated flights to the three cities via Doha and see a VA flight tag added to the services. In itself, a new codeshare agreement isn't usually especially interesting, but there are backstories here presenting all sorts of competitive wrinkles.

Longstanding Virgin Australia international partners and former shareholders, Singapore Airlines and Etihad, already put VA flight numbers on their existing codeshare flights between Australia and the European cities. Singapore Airlines adds a VA flight number on some services to Rome and Milan while Etihad codeshares on flights to all three cities.

Qatar Airways Airbus A350-900
Virgin Australia's relationship is brand new and evolving fast. Photo: Qatar Airways

Singapore Airlines keeps its codeshare partner role

The arrangement with Singapore Airlines is not changing regarding these flights, but Etihad appears to be out in the cold in Virgin Australia's brave new codeshare world - at least as far as flights to these three European cities go.

"Virgin Australia will continue to offer codeshare services on the Australia – Singapore – Paris route and Australia – Singapore – Milan route with its alliance partner Singapore Airlines," Virgin Australia's July 11 letter to IASC reads. " Virgin Australia does not intend to market on Etihad Airways operated services, but Etihad may continue to market Virgin Australia operated domestic services and service operated on the New Zealand route."

Virgin Australia has been busy in the codeshare space lately. Last week, Virgin Australia won tentative approval for codeshare pricing arrangements with its international airline partners for five years.

For a mid-market carrier, Virgin Australia is doing well locking in alliances with a series of high-profile international airlines. Going particularly well is Virgin Australia's alliance with Singapore Airlines. Virgin Australia's Velocity members are cheering the restoration of flight redemptions on Singapore Airlines and the ability to flick Velocity points across to a KrisFlyer account - effectively giving Virgin Australia frequent flyers access to the Star Alliance network. Singapore Airlines KrisFlyer members also have reciprocal rights.

Singapore Airlines Airbus A380-800
Photo: Getty Images

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An airline marriage of convenience that might work

Virgin Australia is giving Etihad the flick on these routes in favor of their new Doha-based buddy. Like Singapore Airlines, Qatar Airways has a big footprint in Australia. But Qatar Airways is a oneworld airline as is the homegrown powerhouse airline Qantas. But because Qantas has long cozied up to Emirates, Qatar Airways isn't able to deepen their relationship with Qantas, a circumstance CEO Akbar Al Baker rather impolitely regretted in front of Virgin Australia CEO Jayne Hrdlicka recently.

As in a lot of other markets, Etihad's presence in Australia these days isn't what it once was. But plenty of Australians like flying Qatar Airways which flies into five (soon to be six) Australian cities. Their well-regarded Qsuites hit the spot on those long flights towards Europe. And while many of Simple Flying's European readers might roll their eyes at the thought of another flight into Charles de Gaulle, lots of Australia-based flyers, including many Virgin Australia loyalists, would cheerfully hock their firstborn for a week or two there. Milan and Rome also rate highly on wishlists. So Jayne Hrdlicka might be onto a winner here - assuming IASC approves the applications, which you can almost take for granted they will.

"You have to understand the market and where you want to play and how you're going to compete," said the Virgin Australia CEO last month. "We can't provide the international network for our customers that they need and want, so we needed to have the best partners. We're serving our customers and they deserve the very best out of Australia - and for us that's United Airlines to the US, it's Qatar Airways into Europe, and Singapore Airlines into Asia and through to Europe. The combination of these partners brings an extraordinary network to our customers."

While Jayne Hrdlicka name-checked the three big Virgin Australia partners, Etihad didn't rate a mention. Virgin Australia's international airline partner structure is starting to represent a series of tiers, and Etihad Airways has slipped from top tier late last decade to the bottom rung.

Etihad Airbus A321 on Apron
Etihad has been undergoing a comprehensive restructuring since 2018. Photo: Etihad

An alternative to Qantas

The proposed Rome flights also offer an interesting alternative to Qantas' new seasonal services between Perth and Rome. Seats on these flights have sold like hotcakes, no doubt sparking some interest at Virgin Australia's HQ. For travelers to and from Australia's big east coast cities, both options are one-stop.

If you are, say, Brisbane-based, you can 737-800 it across to Perth on Qantas to hook up with their Rome-bound 787-9 Dreamliner. Or you could fly out of Brisbane on a Qatar Airways A350-900, connect in Doha, spend some time in the Al Mourjan Lounge, and continue onto one of the three European cities in another Qatar Airways widebody jet. For many, especially those ten million-odd Virgin Australia Velocity members with their stashes of frequent flyer points, the later alternative ticks a lot of boxes.

Virgin Australia isn't asking for any special favors here. The airline wants to utilize pre-agreed capacity between Australia and Italy and France. Under the current guidelines, Virgin Australia can sell 300 seats a week on flights to Rome and Milan on their codeshare partners and 150 seats a day to Paris. The application simply wants to swap out Etihad for Qatar Airways. IASC is unlikely to object.