Qatar Airways to acquire 25% stake in Virgin Australia, enhancing airline partnerships

The Qatar airline will acquire the stake from Virgin Australia’s owner Bain Capital, the companies said Monday in a joint statement.

Terms of the deal, which is subject to regulatory approval, weren’t disclosed, Bloomberg reported.

Virgin Group and Queensland Investment Corp. will retain shareholdings in Virgin Australia, according to the statement.

The tie-up will also see Virgin return to long-haul international flights, with the carrier reportedly planning to launch flights from Brisbane, Melbourne, Perth and Sydney to Doha from mid-2025.

Virgin went bankrupt during the pandemic, and was rescued in 2020 by Bain in a deal that wiped out much of the claims of unsecured creditors.

Qatar Airways takes stake

Qatar’s stake serves as a cornerstone investment ahead of Virgin’s anticipated return as a listed company.

Bain last year postponed plans for an initial public offering that would have valued the airline at around A$2.5 billion ($1.7 billion).

The stake acquisition move aims to give Qatar Airways better access to a market where it was denied more flights by the government last year – a move the airline criticized as unfair.

Australia’s domestic market is highly concentrated, with dominant player Qantas Airways carrying 62 per cent of passengers in March, according to the nation’s competition regulator.

Virgin had 31 per cent of the market, followed by Rex, which collapsed in July after a failed attempt to challenge the majors on capital city routes.

Qatar has been adding to its network of global equity holdings of late, with the carrier announcing several acquisitions in Africa, including buying a 25 per cent stake in South Africa’s SA Airlink.

It also announced closing the pending purchase of 49 per cent of Rwanda’s RwandAir.

The Doha-based carrier is the largest shareholder of British Airways owner IAG SA, and owns about 10 per cent of Hong Kong-based Cathay Pacific Airways and Latam Airlines Group SA.