Qatar Airways Group has agreed to acquire a minority equity stake (25%) in Virgin Australia (from owner, Bain Capital) in a move that will give the Gulf carrier additional capacity into the lucrative Australian market. In a joint statement today, the Qatari and Australian airlines confirmed plans to strengthen their existing alliance even further, with new non-stop flights to Doha enhancing competition with rival partner airlines, Qantas and Emirates through Dubai.
“A deeper strategic relationship between Virgin Australia and Qatar Airways will drive increased competition in Australian aviation. This will ensure Australian consumers have access to even better value airfares and greater choice,” the partners said.
Having emerged from administration under Bain Capital’s guidance, in 2022 Virgin Australia struck a new style of “Partner Alliance” with Qatar Airways. That partnership has since flourished.
“Domestic competition in Australia is dependent on Virgin Australia thriving through the inevitable ups and downs of aviation. Qatar Airways Group’s strategic investment will provide access to the critical scale and expertise of a world leading global airline. The minority stake also serves as a cornerstone investment ahead of an anticipated return of Virgin Australia into public ownership and the opportunity that would provide for Australians to share in Virgin Australia’s future,” the duo said.
Under the planned venture, Virgin Australia will introduce flights from Brisbane, Melbourne, Perth and Sydney to Doha, Qatar Airways’ global hub from mid-2025. Those flights will be timed to “connect seamlessly into Qatar Airways’ global network,” enabling more than 100 new connecting itineraries to Europe, the Middle East and Africa for Australian travellers.
Lacking its own long-haul aircraft, Virgin Australia would wet-lease wide-body aircraft from Qatar Airways to operate those services.
Last year, Qatar Airways pushed to add up to 21 additional weekly flight frequencies between Qatar and Australia, however the request was rejected by the Australian government.
“The expanded codeshare and collaboration arrangement will provide access to a greater range of international destinations with improved schedules and frequencies, increased earn and redemption opportunities for members of Velocity and Qatar Airways’ Privilege Club, and broader access to great value fares for leisure travellers, small and medium-sized enterprises, and corporate customers,” Virgin and Qatar Airways said.
Jayne Hrdlicka, outgoing CEO of Virgin Australia, said “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.”
“Qatar Airways has been a valued codeshare partner of Virgin Australia since 2022. This investment by the world’s best airline will deepen an already strong partnership by bringing critical scale and the best industry expertise to support our long-term competitiveness and growth.”
“This proposed investment is subject to regulatory approval. We do not take this for granted and have made submissions outlining the benefits of the transaction for Australian aviation, Australian travellers and the Australian economy,” she added.
Eng. Badr Mohammed Al-Meer, CEO, Qatar Airways Group said the company was thrilled to reveal its proposed strategic investment in Virgin Australia today.
“The alignment of our two airlines is significant, the relationships are deep, and we could not be more proud to bring even more great value and choice to all Australians. The investment further demonstrates our strategic alignment with Virgin Australia and our collective ambition to deliver the best possible service and value to Australian passengers,” he said.
Mike Murphy, Partner at Bain Capital noted: “Virgin Australia plays a pivotal role in connecting Australians with each other, and with the world. Over the past four years, we’ve had the privilege of working alongside a team that has shown the dedication and tenacity needed to revitalise the airline.
“After a decade of losses resulting in administration, Virgin Australia has emerged as a strong and profitable company with an attractive market position, a loyal customer base, and a promising growth trajectory.”
“We are pleased to welcome Qatar Airways Group as a partner at this stage to build on Virgin Australia’s strong foundation.”
The proposed equity investment by Qatar Airways Group is subject to approval by the Foreign Investment Review Board and the Australian Competition and Consumer Commission.
Ingrid Fraser, Acting CEO of the Australian Travel Industry Association, welcomed the announcement.
“This will ultimately mean more travel options and more competition in the air, which is positive news for travellers.”
“While the Government must carry out the necessary checks, we urge them to do so expediently to ensure that any benefits of increased competition and connectivity are realised as soon as possible.”
“Investments like this are a strong sign of confidence in the recovery and future growth of the Australian travel sector. It’s positive that this will provide Virgin Australia with a runway towards long-term sustainable ownership and an anticipated return to public listing,” Fraser added.
