Virgin Australia to go long-haul as Qatar Airways secures shareholding

Qatar Airways is to acquire a minority quarter share in Virgin Australia for an undisclosed sum in a move set to trigger increased competition.

Virgin Australia will be able to launch flights from Brisbane, Melbourne, Perth and Sydney to Doha, connecting into Qatar Airways’ global network as part of the proposal.

The extra flights, due to start in mid-2025, will open up more than 100 new connecting itineraries across Europe, the Middle East and Africa.

The new services using aircraft wet leased from Qatar Airways will allow Virgin Australia “to assess the longer-term merits and viability of wide-body aircraft flying while providing Australians with greater local competition for their long-haul travel needs in the near-term”.

The Gulf carrier already has a minority 21.1% stake in British Airways and Aer Lingus owner International Airlines Group and is acquiring the 25% stake in Virgin Australia from US private equity owner Bain Capital, subject to approval from competition authorities.

A joint statement said: “A deeper strategic relationship between Virgin Australia and Qatar Airways will drive increased competition in Australian aviation.

“This will ensure Australian consumers have access to even better value airfares and greater choice.

“Domestic competition in Australia is dependent on Virgin Australia thriving through the inevitable ups and downs of aviation. Qatar Airways Group’s strategic investment will provide access to the critical scale and expertise of a world leading global airline.”

Virgin Australia slumped into administration in 2020 during the pandemic and was sold to Bain Capital.

The Qatar Airways deal will intensify pressure on Qantas both domestically within Australia and on key long-haul routes.

Virgin Australia chief executive Jayne Hrdlicka said: “This partnership brings the missing piece to Virgin Australia’s longer-term strategy and is a huge vote of confidence in Australian aviation.

“Importantly, it will further strengthen Virgin Australia’s ability to compete over the long term, which will inevitably translate into more choice and even better value airfares for consumers as well as additional Australian aviation jobs.

“I am delighted that our closer relationship allows us to put our ‘toe in the water’ regarding long-haul international, as well as the ability to deepen other areas of existing cooperation, including between our respective loyalty programmes and code sharing arrangements.”

Qatar Airways has been a codeshare partner of Virgin Australia since 2022.

Hrdlicka added: “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.

“This proposed investment is subject to regulatory approval. We do not take this for granted and have made submissions outlining the benefits of the transaction for Australian aviation, Australian travellers and the Australian economy.”

Qatar Airways chief executive Badr Mohammed Al-Meer said: “The alignment of our two airlines is significant, the relationships are deep, and we could not be more proud to bring even more great value and choice to all Australians.

“The investment further demonstrates our strategic alignment with Virgin Australia and our collective ambition to deliver the best possible service and value to Australian passengers.

“Not only that, we believe competition in aviation is a good thing and it helps raise the bar, ultimately benefiting customers. This agreement will also help support Australian jobs, businesses and the wider economy.”