Qatar Plans to Buy a 25 Percent Stake in Virgin Australia, New Doha Flights

Virgin, Qatar, and Alliance planes can be seen at Adelaide Airport in South Australia on April 10, 2023. Susan Mortimer/The Epoch Times

Qatar Airways is planning to acquire a 25 percent stake in Virgin Australia, a deal that could increase competition in the Australian travel market.

The plan, subject to Foreign Investment Review Board approval, would enable Virgin to launch a range of new flights from capital cities to Doha.

Virgin Chief Executive Jayne Hrdlicka estimates that new long-haul services between Australia and Doha would generate an estimated economic benefit of $3 billion (US$2 billion) for the Australian economy.

“I am delighted that our closer relationship allows us to put our toe in the water regarding long-haul international, as well as the ability to deepen other areas of existing cooperation, including between our respective loyalty programs and code-sharing arrangements,” she said.

She highlighted that the deal would help Virgin compete with rivals, lowering Australian flight prices.

“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,” she said.

“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.”

However, she cautioned the proposed investment was 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 said.

According to Virgin, the new Doha flights from Brisbane, Melbourne, Perth, and Sydney would open up over 100 new connecting travel itineraries across the globe. The new partnership with Qatar would also unlock new opportunities at the Western Sydney Airport.

Best Airline

Qatar Airways Group CEO Badr Mohammed Al-Meer said the agreement with Virgin would help support Australian jobs, businesses, and the broader economy.

“We are really pleased to be announcing our 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,” he said.

He said the investment further demonstrates Qatar’s strategic alignment with Virgin Australia and their collective ambition to deliver the best possible service and value to Australian passengers.

“Not only that, we believe competition in aviation is a good thing and it helps raise the bar, ultimately benefiting customers,” he added.

Qatar has consistently been ranked one of the top airlines in the world, winning the World’s Best Airline titles eight times since 2010.

US Private Investment Firm Bain Capital Owns Virgin

Qatar would acquire its 25 percent stake, subject to approval, via Virgin’s owner Bain Capital. Bain acquired Virgin Australia in late 2020 and is headquartered in the United States, with about $185 billion in assets under its management.

Meanwhile, Bain Capital Partner Mike Murphy noted that Virgin Australia played a pivotal role in connecting Australians with each other and with the world.

“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 trajector,” Murphy said.

“We are pleased to welcome Qatar Airways Group as a partner at this stage to build on Virgin Australia’s strong foundation.”

Transport Workers Union Seeks Assurance on Jobs

The Transport Workers Union said the proposed plan allows the airline to expand and take on the aggressive competition of Qantas.

However, the union said workers want commitments to address their reservations about Qatar Airways’ influence over their jobs and working conditions.

National Secretary Michael Kaine said, ““It’s crucial that the workers who made sacrifices to get Virgin Australia flying again are those to benefit from the opportunities this deal provides in an industry dominated by aggressive competition.

“After a few tumultuous years, Virgin ground crew, cabin crew and pilots have worked hard to rebuild and repair the culture and working conditions at the airline.”