Qatar Airways to buy 25% stake in Virgin Australia from Bain

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Qatar Airways will acquire a 25 per cent stake in Virgin Australia from US private equity firm Bain Capital, a deal that poses a tougher contest for Qantas Airways, which has long held a dominant position in the Australian aviation market.

Qatar Airways CEO Badr Mohammed Al Meer said his airline believed competition in aviation was “a good thing, and it helps raise the bar, ultimately benefiting customers.”

The stake sale, which is subject to the Foreign Investment Review Board (FIRB), serves as a cornerstone investment ahead of Virgin Australia’s anticipated return to public ownership.

Australia’s FIRB must approve the sale of the Virgin Australia stake to Qatar Airways, but the treasurer can accept or reject the recommendation and impose conditions on the deal.

“This partnership brings the missing piece to Virgin Australia’s longer-term strategy and is a huge vote of confidence in Australian aviation,” Virgin Australia group CEO Jayne Hrdlicka said in a statement.

“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.”

Under the deal, Qatar Airways and Virgin Australia plan to launch flights from Brisbane, Melbourne, Perth and Sydney to Doha with leased aircraft by mid-2025. The extra flights are expected to open up more than 100 new connecting itineraries across Europe, the Middle East and Africa for Australian travellers.

“Qatar Airways’ equity investment will unlock new areas of cooperation with Virgin Australia, which will help drive additional consumer and economic benefits,” the airlines said in a joint statement.

The expanded partnership between the two carriers will offer several advantages, including enhanced connectivity, an expanded loyalty programme and competitive fares.

The financial details of the investment were disclosed.

The sky is the limit for Qatar Airways

Meanwhile, Qatar Airways is the biggest shareholder in British Airways owner International Airlines Group and owns around 10 per cent of Hong Kong-based Cathay Pacific and Latam Airlines Group.

The aviation giant acquired a 25 per cent stake in South Africa-based regional carrier Airlink as part of the flag carrier’s broader strategy to expand its operations across the African continent.

The investment in privately-owned Airlink would enhance an existing code-share partnership between the two airlines and bolster its Africa growth strategy. The deal is also expected to increase Airlink’s capacity and expand the airline’s marketing reach.

The Qatari flag carrier is in talks to acquire a minority stake in RwandAir and, in 2019, agreed with Rwanda’s government to take a majority stake in a new international airport in Rwanda.

Qatar Airways’ full-year profit jumped by 39 per cent to $1.7bn (QAR6.1bn) in 2023/24, driven by robust demand for international travel, while its revenues rose by 6 per cent or QAR4.7bn to a record QAR81bn.

Read: Qatar Airways acquires 25% stake in South African carrier Airlink