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Virgin Australia could soon be part-owned by Qatar Airways, opening a major Australia to Middle East route to the roster by 2025.
Qatar Airways intends to acquire a 25 per cent stake in Virgin Australia, which will be subject to Foreign Investment Review Board approval.
The deal would allow flights from Australia’s four largest cities to Doha, under an aircraft and crew lease agreement.
In a statement, Virgin says the proposed minority stake would create “more choice and better value for Australians”.
“Internal competition in Australia depends on Virgin Australia thriving through the inevitable ups and downs of aviation.”
The deal would be closed through the Gulf airline’s acquisition of 25 percent of Virgin owner Bain Capital’s stake.
“This partnership provides the missing piece to Virgin Australia’s long-term strategy and is a huge vote of confidence in Australian aviation,” said Virgin Australia CEO Jayne Hrdlicka.
Virgin Australia has not operated flights longer than eight hours since it was rescued from administration by Bain Capital in 2020. Image: NewsWire/Damian Shaw
Qatar Airways and Virgin Australia are aligned from 2022. Image: Supplied
The two airlines have ‘codeshare’ flights from 2022. The proposed deal would allow Virgin to resume flights longer than eight hours again and has positive implications for the development of sustainable aviation fuel, given Virgin Australia’s commitment to efforts to decarbonizing Australian jet fuel, the statement says.
“We believe that competition in aviation is a good thing and helps raise standards, ultimately benefiting customers,” said Qatar Airways CEO Badr Mohammed Al-Meer.
“This deal will also help support Australian jobs, businesses and the wider economy.”
Virgin Australia’s boss says approval from the government’s Foreign Investment Review Board was not a given, but negotiators had made submissions outlining the benefits to Australian aviation, Australian travelers and the economy.
Parties involved claim the deal would add $3 billion to the Australian economy through incremental visitor flows over the next five years.
Virgin Group and Queensland Investment Corporation will retain their stakes in Virgin Australia.
“Importantly, it will further strengthen Virgin Australia’s ability to compete in the long term, which will inevitably translate into more choice and even better airfares for consumers, as well as additional jobs in Australian aviation,” Ms. Hrdlicka.
