Qatar Airways has announced its intention to take a minority 25% stake in Virgin Australia, in a “strategic investment” that will shake up the Australian airline sector.
The Middle East carrier says it intends to acquire the stake from Virgin Australia owner Bain Capital for an undisclosed sum, with the deal subject to regulatory approval.
Qatar says the deal will provide Virgin Australia with “access to the critical scale and expertise of a world leading global airline”.
A joint statement reads: “The equity investment by Qatar Airways Group will unlock new areas of cooperation with Virgin Australia, all of which will help to drive additional consumer and economic benefits.”
It will also help pave the way for Virgin Australia to relist on the Australian stock exchange, a move that had been mulled for a while.
The deal could also see Virgin Australia make a return to widebody operations, under a proposed wet-lease agreement that see the Australia link Brisbane, Melbourne, Perth and Sydney with Doha.
“The proposed wet lease services will begin in mid-2025, allowing Virgin Australia to assess the longer-term merits and viability of wide-body aircraft flying while providing Australians with greater local competition for their long-haul travel needs in the near-term,” the two carriers add.
The details of these operations are not immediately clear. Virgin Australia had operated widebodies - in the form of Boeing 777s and Airbus A330s - before it entered into administration in 2020.
Both Virgin Australia and Qatar are already in a wide-ranging partnership, which they signed in 2022, covering areas such as codeshares and loyalty programmes. The prospect of a Qatar stake in Virgin Australia had also been floated on several occasions, but neither carrier had commented publicly about it.
Virgin Australia chief Jayne Hrdlicka says the partnership is a “missing piece” to the airline’s longer-term strategy.
Calling it a “vote a confidence in Australian aviation”, she adds: “[It] will further strengthen Virgin Australia’s ability to compete over the long term, which will inevitably translate into more choice and even better value airfares for consumers as well as additional Australian aviation jobs.”
The news will raise the stakes in Australia’s airline sector, which is dominated by Qantas – who, like Qatar, is a member of the Oneworld alliance – and its low-cost unit Jetstar. Both carriers hold about 61% of domestic market share.
Qatar had long been vocal about wanting to gain access to the Australian market. Its application to add capacity to the country was rejected by Australian regulators, a move seen by some as Canberra protecting the interests of Qantas.
