The proposal would allow Virgin to offer long-haul flights and lower domestic fares, but the deal requires regulatory scrutiny.
The lines agreed. Qatar Airways in deal to buy stake in Virgin Australia, The country’s second largest airline, it is the latest in a number of operations. International Acquisition Which is carried out by Gulf Air.
The deal will see Qatar Airways buy a 25% stake in Virgin Australia from private equity group Bain Capital, which bought the carrier originally founded by Sir Richard Branson out of administration during the pandemic.
Details of the Qatar Airways and Virgin Australia deal
The deal is part of a broader plan to eventually list Virgin Australia publicly, with Qatar Airways expected to be a cornerstone investor, the airlines said in a statement.
Qatar Airways is wholly owned by the Qatari government, and the deal is subject to regulatory approvals, including the Australian Foreign Investment Review Board.
Virgin Australia will return to long-haul flights as part of the agreement, feeding passengers to Qatar’s hub in Doha on flights from Brisbane, Melbourne, Perth and Sydney on chartered aircraft from 2025.
Strong competition with Qantas
The deal will increase Virgin Australia’s competition with national carrier Qantas, and comes after Qatar Airways lobbied the Australian government for more flying rights to increase the number of routes it can operate within the country.
“We believe that competition in the aviation industry is a good thing and helps raise the bar, which ultimately benefits customers,” said Qatar Airways Chief Executive Officer Badr Mohammed Al Meer.
Virgin Australia Group CEO Jane Hrdlicka said it had not sought regulatory approval and would work to determine the benefits to the Australian economy and aviation sector.
“This partnership brings the missing piece to Virgin Australia’s long-term strategy and is a huge vote of confidence in Australian aviation,” she said. “More importantly, it will strengthen Virgin Australia’s long-term competitiveness.”
Virgin Australia was one of the most high-profile corporate collapses caused by the pandemic in April 2020, after shareholders refused to bail out the carrier.
Qatar Airways Deals
The deal is the latest in a series of deals for Qatar Airways, which has bought stakes in several airlines to help build a feeder network for flights to its Doha hub.
In August, it agreed a deal to buy a 25% stake in South African carrier Airlink.
Qatar Airways already owns a 25% stake in International Airlines Group, which owns British Airways.
It also owns 10% stakes in Hong Kong’s LATAM Airlines and Cathay Pacific Airways, as well as 3.4% in China Southern Airlines.
The airline is also closing a long-planned investment to acquire a 49% stake in state-owned RwandAir.
