Qatar Airways Buys 25 Percent of Virgin Australia, Promising More Flights and Cheaper Fares

Virgin Blue line the apron at Sydney Airport on January 9, 2008. Torsten Blackwood/Getty Images

The Australian government has approved a deal allowing Middle Eastern airline Qatar Airways to acquire a 25 percent minority stake in Virgin Australia.

As part of the deal, 28 new weekly return services will operate between Doha and four major Australian cities—Perth, Brisbane, Sydney, and Melbourne.

Travellers are being told to expect cheaper airfares, with a promise the marriage of airlines will also benefit regional Australia by providing better tourist connections.

The airlines have also signed an agreement to collaborate on green initiatives, including aiming to advance the use of sustainable aviation fuel and to improve waste and energy management.

Government Approval

Australian Treasurer Jim Chalmers, who gave the deal the green light along with the Foreign Investment Review Board, says it will benefit Australians.

“My decision aligns with the advice of the Foreign Investment Review Board that this proposal is consistent with the national interest,” he said.

Federal Labor Treasurer Jim Chalmers speaks to the media during a press conference at the Commonwealth Parliamentary Offices in Brisbane, Australia on Sept. 25, 2024. AAP Image/Darren England

“The CEOs of Virgin Australia and Qatar Airways have written to me with assurances that this investment will create employment benefits and job growth opportunities for Australians.”

Virgin Australia Group CEO Jayne Hrdlicka said the deal added “fuel” to the airline’s transformation agenda.

“This is a major win for Australian consumers, who are already benefiting from more choice and greater value when travelling to Europe, the Middle East, and Africa since our flights went on sale in December,” she said.

“Domestically, we are competing well and performing stronger than at any other point in our 24-year history.

“Being backed by one of the world’s largest airlines now gives us the scale and access to industry expertise which will support continued growth in line with the market domestically, improve our ability to compete for key segments of the market, and add momentum to our margin ambitions.”

Qatar Airways Group Chief Executive Officer Mohammed Al-Meer said it was a solidifying move between the two airlines.

“We are confident in our ability to deliver an alliance between our two airlines that will provide immense benefit to customers, Australian businesses, Australian jobs and the wider economy,” he said.

The deal was made possible after a draft determination by the Australian Competition and Consumer Commission to permit the airlines to cooperate under an integrated alliance for five years.

The final approval of the alliance is expected in March or April, with flights set to begin in June. Virgin Australia is still waiting for an official allocation of air rights, but there are no competitors for the route.