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Qatar Airways intends to buy a minority 25% equity stake in Bain Capital-owned Virgin Australia for an undisclosed sum, according to a press release. Reports of a possible acquisition emerged in July. The transaction is still pending approval from the Australian government.
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A W for Qatar: As part of the transaction, Virgin Australia plans to launch flights from Brisbane, Melbourne, Perth, and Sydney to Doha from mid-2025 with leased aircraft, the statement notes. The flights will translate to over 100 new connecting itineraries across Europe, MENA and Africa for Virgin customers. The increased traffic would spell benefits for Qatar’s Doha hub regardless of whether the Australian government approves Qatar Airways’ push to add additional routes, Reuters reports.
It’s been a rocky road: Qatar was denied by Australia a request for additional routes last year over what the Australian government described as invasive body searches of five Australian women at Hamad International Airport in 2020. Qatar Airways entered talks more recently with Australia’s government to boost the number of routes it operates in the country to no avail.
What they said: “This partnership brings the missing piece to Virgin Australia’s longer-term strategy and is a huge vote of confidence in Australian aviation … it will further strengthen Virgin Australia’s ability to compete over the long term,” Virgin Australia CEO Jayne Hrdlicka said in the statement.
And Virgin is banking on Qatar Airways’ strength: “It means that we’ve got an important shareholder who has a scale that we don’t have, who has the expertise that we don’t have, that can help us compete better domestically by giving us access to that scale,” Hrdlicka added in an interview with ABC television yesterday.
There’s more to come: The minority stake purchase makes Qatar Airways a cornerstone investor in Virgin Australia ahead of an upcoming IPO, the statement notes. Bain Capital said last year it would explore an IPO of Virgin Australia, targeting an AUD 1 bn listing, but plans were pushed to 2024 after assessing market conditions. Bain bought Virgin Australia for USD 2.42 bn back in 2020 after it was placed in voluntary administration.
Qatar Airways has been on an expansion spree: Qatar Airways is set to close a 49% acquisition of RwandAir. The carrier also launched its first cargo hub at Kigali International Airport (KGL) in Rwanda in partnership with RwandAir. Qatar Airways is also looking to invest in a southern African airline as part of expansion plans.
