Qatar Airways has taken a step towards entering the Australian air travel market by announcing plans to acquire 25% of Virgin Australia.
The deal will see the acquisition of shares by US private equity firm Bain Capital, but it must still be approved by Australian authorities.
The minority stake in Virgin is a response to the Australian government’s refusal to allow Qatar to launch more flights from Sydney, Melbourne, Brisbane and Perth in 2023.
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According to Virgin Australia, the partnership will allow it to launch flights from the four Australian cities to Doha, where Qatar’s hub is located.
The routes will be operated on a lease basis with Qatar aircraft and crew, however. Flights will begin in mid-2025.
Qatar’s entry into the Australian market is expected to have a major impact on Qantas, the country’s largest and most traditional airline. To date, its competitors have had a modest market share compared to its market share.
For Qatar, it is yet another step in its global strategy to transform Doha into a strong hub to compete with Dubai and the Saudi Arabian government’s plans for Jeddah.
“This partnership brings the missing piece to Virgin Australia’s longer-term strategy and is a huge vote of confidence in Australian aviation. Importantly, 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,” said Virgin Australia Group CEO Jayne Hrdlicka.
Virgin and Qatar have had a codeshare agreement since 2022.
