Qatar Airways has agreed to acquire a 25 per cent stake in Virgin Australia, positioning the Australian airline to re-enter long-haul international routes. The deal now awaits regulatory approval from the Foreign Investment Review Board.
Key Takeaways
- Qatar Airways will acquire 25 per cent of Virgin Australia, pending approval.
- The partnership aims to introduce long-haul flights from Australian cities to Doha by 2025.
- Virgin’s proposed services could add $3 billion to the Australian economy.
- The deal includes a “wet-lease” agreement, enabling Virgin to use Qatar aircraft.
- The Foreign Investment Review Board and Australian Competition and Consumer Commission will need to approve the transaction.
Crucial Quote
“This partnership brings the missing piece to Virgin Australia’s longer-term strategy,” Virgin Australia CEO Jayne Hrdlicka told media on Tuesday morning. “It will strengthen our ability to compete over the long term, translating into more choice and better value for consumers.”
Big Number
$3 billion – The amount Virgin Australia estimates its proposed services to Doha could generate for the Australian economy over the next five years.
This economic boost is expected through increased visitor numbers and expanded travel routes, aligning with Qatar Airways’ ambition to expand its footprint in Australia.
Key Background
Virgin Australia went into voluntary administration in April 2020, one month after Australia closed its borders due to the COVID-19 pandemic. The airline was purchased by Bain Capital later that year and has since focused on rebuilding its operations.
Under CEO Jayne Hrdlicka, Virgin reduced its international routes, flying only domestically and to select short-haul destinations like Bali and Fiji.
What happens next?
The deal is pending approval from the Foreign Investment Review Board and the Australian Competition and Consumer Commission. If approved, Virgin plans to start flying long-haul routes to Doha by mid-2025.
The wet-lease agreement with Qatar Airways will enable Virgin to use Qatar aircraft, allowing for a quicker re-entry into the international market. Regulatory decisions are expected in the coming months.
