It seems that the Australian Government has approved Qatar Airways Group’s purchase of a 25 per cent stake in Virgin Australia.
Qatar Airways and Virgin Australia Together – Image, Qatar Airways/Virgin Australia
Qatar Airways Group’s minority 25 per cent investment in Virgin Australia has now received Foreign Investment Review Board (FIRB) approval following the Federal Treasurer’s announcement today. This follows the Australian Competition and Consumer Commission’s (ACCC) Draft Determination on 18 February indicating its intention to authorise the airlines’ integrated alliance, with final approval expected in March/April 2025. Together, they help open the door to the airline’s return to long-haul international flying.
Virgin Australia now awaits a decision from the International Air Services Commission (IASC) on what is an uncontested allocation of air rights for services between Australia and Qatar, due to commence in June.
Bain Capital, Virgin Group, and Queensland Investment Corporation will retain shareholdings in Virgin Australia.
Come forward, the Long-haul flying and Integrated Alliance
Subject to IASC (International Air Service Commission) approval, Virgin Australia will recommence long-haul flying in June 2025, with flights from Sydney, Brisbane, and Perth to Doha.
Flights from Melbourne to Doha are scheduled to commence in December 2025.
These flights will be operated utilising wet-leased aircraft from Qatar Airways. Passengers can connect at Doha to Qatar Airways’ global network, including more than 100 new connecting itineraries across Europe, the Middle East and Africa.
The expanded codeshare and collaboration arrangement will also provide access to increased points earn and redemption opportunities for members of Velocity and Qatar Airways’ Privilege Club.
In Quotes
Qatar Airways Group Chief Executive Officer, Engr. Badr Mohammed Al-Meer said:
“This latest development is a significant step towards solidifying the strong and enduring relationship that continues to evolve between Qatar Airways Group and Virgin Australia. It is also a huge boost to our shared ambition to create even greater choice and value for all Australian passengers, with healthy competition and world-class service at the very core of our collective offering.
“We are confident in our ability to deliver an alliance between our two airlines that will provide immense benefit to customers, Australian businesses, Australian jobs and the wider economy.”
“This is a major win for Australian consumers, who are already benefiting from more choice and greater value when travelling to Europe, the Middle East and Africa since our flights went on sale in December. Domestically, we are competing well and performing stronger than at any other point in our 24 year history. Being backed by one of the world’s largest airlines now gives us the scale and access to industry expertise which will support continued growth in line with the market domestically, improve our ability to compete for key segments of the market and add momentum to our margin ambitions.
“Today is an incredibly proud day for everyone in the Virgin Australia team. Each of our 8,000 team members has played an important role in getting us to this point. Many of our people are personally excited about the secondment opportunities, and we have seen this through the extraordinary response to the expressions of interest for pilot and cabin crew roles with Qatar Airways. Virgin Australia has a bright future, and we will continue to go from strength to strength with Qatar Airways by our side.
“We thank the Federal Treasurer for his decision, and join him in recognising the positive outcome for competition, consumers and jobs growth. Today is great news for the many stakeholders that rely on Virgin Australia’s success.”
Bain Capital Partner, Mr. Mike Murphy, said: “We’re delighted to welcome Qatar Airways Group as a partner in Virgin Australia.
“Virgin Australia has emerged as a strong and profitable company with an attractive market position, a loyal customer base, and an exciting growth trajectory. Now, through our partnership with Qatar Airways, we’re unlocking new areas of cooperation with one of the world’s leading airlines.
“Bain Capital remains the majority shareholder and is committed to Virgin Australia’s long-term success.”
One way to get into a market – buy your way in
With the money side out of the way, it all comes down to the final approval of the IASC to give the final nod to allow Virgin Australia to operate these new services via a wet-lease.
It seems the experience along with the funds, along with the appeals from Bain Capital, Virgin Austraila and Qatar Airways, have satisfied the majority of the regulator’s requirements.
With access to Australian markets limited (and Qatar Airways very much on the thin end), securing access to the Australian market has been an important step for the group – compared to Emirates (who have a tight relationship with Qantas).
For Virgin Australia, this will be another attempt at long-haul routes (given that in previous incarnations, they operated Boeing 777-300ERs under the V Australia brand, as well as operating Airbus A330 aircraft internationally), with the airline made up of Boeing single-aisle aircraft currently.
All it takes is one more regulator to give the green light – but it seems that a lot of the fears have been put aside.
And if it lowers fares in the long term… all the better.
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