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Qatar Airways has taken a strategic 25 per cent stake Virgin Australia from private equity group Bain Capital, giving one of the world’s largest airlines a seat at the table ahead of a potential ASX listing for Virgin.
The move will see existing investors Virgin Group and Queensland Investment Corporation retain their shareholdings in Virgin Australia, with the deal touted as driving increased competition in the Australian aviation sector.
The investment in Virgin Australia also cements the codeshare partnership Qatar already has with the Australian airline which the partners say will now deliver greater destination choice for passengers.
“This partnership brings the missing piece to Virgin Australia’s longer-term strategy and is a huge vote of confidence in Australian aviation,” says Virgin Australia CEO Jayne Hrdlicka.
“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.
“Qatar Airways has been a valued codeshare partner of Virgin Australia since 2022. 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.”
The minority stake secured by Qatar Airways provides a cornerstone investment for the group ahead of Virgin Australia proposed ASX float following the Bain Capital buyout from administrators in 2020.
An ASX listing for Virgin Australia is rumoured to have been placed on the backburner in the wake of the collapse of Rex Airlines earlier this year.
"Virgin Australia plays a pivotal role in connecting Australians with each other, and with the world,” says Bain Capital partner Mike Murphy.
“Over the past four years, we've had the privilege of working alongside a team that has shown the dedication and tenacity needed to revitalise the airline.
“After a decade of losses resulting in administration, Virgin Australia has emerged as a strong and profitable company with an attractive market position, a loyal customer base, and a promising growth trajectory.
“We are pleased to welcome Qatar Airways Group as a partner at this stage to build on Virgin Australia’s strong foundation.”
The Virgin partners say the investment by Qatar Airways will provide the Australian airline access to the “critical scale and expertise of a world leading global airline”.
The investment also aims to advance new areas of cooperation between Qatar Airways and Virgin Australia that they say will deliver benefits to the consumer and economy.
Hrdlicka notes that proposed long-haul services between Australia and Doha stemming from this deal will generate about $3 billion in economic benefit to the Australian economy through visitor increases over the next five years.
The route will also deliver increased freight capacity, supporting the country’s high-value exports to the Middle East and Europe.
“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 programs and code sharing arrangements,” says Hrdlicka.
Among the initiatives will be the potential for the partners to collaborate in fields such as sustainability and development of the Western Sydney aviation precinct that could drive job and training opportunities for the region.
The investment could also see Virgin Australia launch flights from Brisbane, Melbourne, Perth and Sydney to Doha, connecting with Qatar Airways’ global network.
“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,” says Qatar Airways CEO Eng. Badr Mohammed Al-Meer.
“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.”
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