Qatar Airways Acquiring 19% Stake in Virgin Australia

Qatar Airways (QR) is set to acquire a 19% stake in Virgin Australia (VA), with the deal expected to be announced in the coming days, pending approval from the Australian government’s Foreign Investment Review Board. The acquisition, known internally as “Project Doubles,” will deepen Qatar Airways’ involvement with the Australian carrier and could shift the competitive landscape in the region, especially impacting its Oneworld alliance partner, Qantas (QF), reported ch-aviation.com.

Qatar Airways and Virgin Australia already have a strong partnership through their existing codeshare agreement, which has allowed the Qatari airline to favor Virgin frequent flyers over Qantas. The acquisition would enhance this relationship further and provide Qatar Airways with more influence in Australia’s aviation market, especially as it seeks to increase its presence in the region.

This announcement comes amid ongoing speculation about Qatar Airways expanding its footprint in Australia. Recently, the airline also acquired a 25% stake in South African airline Airlink (4Z), signaling its broader strategic intentions to expand globally.

The deal would likely spark renewed tension between Qatar Airways and Qantas, especially after Qantas successfully lobbied the Australian government in 2023 to block Qatar Airways’ request for additional flight rights to Australia. Currently, Qatar Airways is allowed to operate 28 weekly flights to major Australian airports—Sydney, Melbourne, Brisbane, and Perth—under the existing bilateral agreement between Qatar and Australia. In contrast, Emirates (EK, Dubai International), which has a codeshare partnership with Qantas, is allowed 168 weekly flights to the same airports, creating an imbalance in market access for Qatar Airways.

The rejection of Qatar’s application for more flights stirred controversy, especially given the demand for increased capacity during that period. Since then, Qatar Airways has resubmitted its application for additional flights, and this acquisition deal could add further weight to its efforts.

Qatar Airways’ new stake in Virgin Australia will also provide a clearer valuation for Bain Capital, which holds a 93% majority share in the Australian airline. Bain Capital, which acquired Virgin Australia for AUD 3.5 billion (USD 2.35 billion) in 2020 after the airline went into voluntary administration, has already recouped much of its initial investment and is now considering a potential initial public offering (IPO) for the carrier. Virgin Australia has returned to profitability but has not yet released its financial results for FY2023.

This investment by Qatar Airways will likely solidify Virgin Australia’s position in the competitive Australian aviation market, especially as it seeks to recover fully from the financial struggles of recent years. Bain Capital’s decision to welcome Qatar Airways as a key shareholder could further drive Virgin Australia’s expansion and financial performance.

Neither Virgin Australia nor Bain Capital has commented publicly on the impending deal, though Qatar Airways’ involvement signals a major shift in the region’s airline industry. With the anticipated announcement, Qatar Airways is set to strengthen its presence in Australia, potentially reshaping alliances and competition in the Australian market.

Sources: AirGuide Business airguide.info, bing.com, ch-aviation.com, Qatar Airways