Mark Riley: There is more than one way to break the Qatar Airlines logjam

When Qatar Airlines increased the size of its Perth flights last December it said it demonstrated the company’s deep commitment to the Australian market.

It was also to make money.

Let’s not be fooled here.

Qatar provided a terrific service to Australia during COVID, when many other airlines shut up shop.

As Premier Roger Cook pointed out last week, some of Qatar’s mercy flights to Perth from Europe had as few as seven stranded Aussies on board. Those flights ran at losses running into the tens of millions of dollars.

But Qatar no doubt saw them as a much-needed investment in recovering goodwill with the Australian Government and the chance of making billions more.

It has a lot of ground to make up.

The treatment of 13 Australian women allegedly subjected to invasive strip searches after an abandoned newborn was discovered in the Qatar airport terminal is the subject of ongoing legal proceedings.

Foreign Minister Penny Wong called Qatar’s prime minister this week to protest the ruling royal family’s attempts to claim diplomatic immunity on the proceedings.

Qatar Airways’ decision to upgrade its daily Perth services from B777-300 aircraft to the much larger A380s added 163 extra seats to every flight. With one direct flight in and one out every day, that’s another 2,282 people every week, or 128,664 a year.

Even at a conservative price of $1000 a leg, Qatar could trouser an additional $130million annually from that increase. Not bad.

But it’s chicken feed in comparison to the eye-watering amounts it seeks to make by doubling its 28 flights a week into Perth, Sydney, Melbourne and Brisbane. That could bring another $1bn a year.

So, Qatar’s “deep commitment” would also help to fill its already deep pockets.

None of that absolves the Albanese Government in general or Transport Minister Catherine King in particular from the responsibility of explaining exactly why it has knocked back Qatar’s expansion bid.

Ms King insists there are many valid reasons for her making that decision. She just can’t detail them publicly for national security and commercial reasons.

But as a government-owned, royal family-controlled company, Qatar Airways is renowned by passengers for its high-quality customer service and by its competitors for its predatory market behaviour.

It is accused of manipulating markets by artificially undercutting its competition, imperilling those competitors’ jobs and profits, knowing its own losses will be covered by the emirate’s endless oil and gas riches.

Ms King bit back sharply yesterday at Opposition Leader Peter Dutton’s claim that preventing Qatar from doubling its flights is robbing the market of competition and customers of cheaper flights.

She says the travel market is recovering with more flights returning each week and more players expanding their services. That would inevitably drive down ticket prices and that adding 28 Qatar flights to the thousands already operating would have little effect on competition.

Mr Dutton exploited Prime Minister Anthony Albanese’s absence from the parliament this week to create mayhem on the issue.

His decision to move dissent in a ruling of Speaker Milton Dick in Question Time on Tuesday was a crude but ultimately successful tactic. The ensuing parliamentary brawl left the impression that the Government was doing Qantas’s bidding in blocking Qatar.

And, at least politically, being aligned with Qantas at present is a bit like being aligned with Russia.

Ms King insists her decision was made for the benefit of the market as a whole and no one carrier in particular.

She highlighted the not-insignificant point that, when faced with a similar proposal from Qatar in 2018, the then-Coalition Government froze any decision for four years.

Ms King’s determination was the result of that non-decision being thawed. And Qatar can make another application in six months.

Reading between the lines of Catherine King’s answers yesterday, Qatar might do better to apply for a smaller increase than the effective doubling of its slots.

In the meantime, it could upscale its flights into Adelaide the way it has into Perth and restart its Canberra services as an additional demonstration of its “deep commitment”.

Who knows, it might also make an extra few hundred million dollars along the way.