Qatar Airways plans to take a 25 per cent stake in code-share partner Virgin Australia in a move that will expand the Gulf carrier’s global network.
Qatar plans to acquire the minority stake from Virgin Australia owner Bain Capital, the companies said in a joint statement.
The move aims to give Qatar Airways better access to a market where it was denied more connections by the Federal Government last year — a contentious move the airline said was unfair and protected rival Qantas’ dominant position in the market.
Virgin said the stake would allow for a measured entry into long-haul international flying by the middle of next year, with significant flow on benefits for Australian travellers and the economy.
“A deeper strategic relationship between Virgin Australia and Qatar Airways will drive increased competition in Australian aviation,” the statement said.
“This will ensure Australian consumers have access to even better value airfares and greater choice.
“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.”
Virgin said Qatar’s buy-in also serves as a cornerstone investment ahead of a long-awaited return of Virgin Australia to trading on the Australian Securities Exchange
Virgin crumbled under the weight of $6.8 billion in debt during the pandemic and was rescued in 2020 by Bain in an $3.5b deal that wiped out much of the claims of unsecured creditors. Bain last year postponed plans for an initial public offering for the airline.
Doha-based Qatar is also the largest shareholder of British Airways owner IAG, and owns about 10 per cent of Hong Kong-based Cathay Pacific and Latam Airlines.
Virgin Group and Queensland Investment Corporation will retain shareholdings in Virgin Australia, according to the Monday statement.
Qatar has also announced several acquisitions in Africa, including buying a 25 per cent stake in South Africa’s SA Airlink and the pending purchase of 49 per cent of Rwanda’s RwandAir.
The Virgin and Qatar deal is subject to regulatory approval.
More to come.