Qatar Airways has announced plans to acquire a 25% stake in Virgin Australia from its current owner, Bain Capital, subject to regulatory approvals.
The acquisition comes as Virgin Australia gears up for an anticipated initial public offering (IPO) and long-haul flight expansion.
The deal is set to strengthen Virgin Australia's international reach, with plans to launch new routes from Brisbane, Melbourne, Perth, and Sydney to Qatar's hub in Doha.
The routes will provide Australians with greater access to destinations across Europe, the Middle East, and Africa, with the first of these leased wide-body aircraft services expected to begin by mid-2025.
Virgin Australia described the minority stake as a “cornerstone investment” as it prepares for a potential return to public ownership.
Bain Capital, which acquired Virgin Australia in 2020 for A$3.5 billion ($2.42 billion) following its voluntary administration, had initially targeted a A$1 billion IPO but delayed the plans in 2022.
Virgin Australia's CEO, Jayne Hrdlicka, expressed optimism about the partnership with Qatar Airways, highlighting the strategic alignment it brings to the airline’s long-term growth plans.
“This partnership brings the missing piece in Virgin Australia's long-term strategy," Hrdlicka said in a statement.
Qatar Airways' investment is still subject to approval by Australia's Foreign Investment Review Board and other regulatory bodies. If approved, it will allow Qatar Airways to gain more access to Australian traffic through its Doha hub, even though the airline’s previous attempts to increase its flight capacity from Australia were blocked by the Australian government.
The move will enhance competition in the Australian market, which is currently dominated by Qantas Airways and Virgin Australia, who together control about 90% of domestic air travel.
Qatar Airways has a history of making strategic investments in global airlines, holding minority stakes in International Airlines Group (IAG), which owns British Airways, Cathay Pacific, and China Southern Airlines.
Later, Hrdlicka spoke on ABC News Breakfast on what this would mean for Virgin: "It means that we’ve got an important shareholder who has scale that we don’t have, who has expertise that we don’t have, that can help us … to do things that we otherwise wouldn’t be able to afford to do as quickly and give us the chance to compete better domestically. We think that this is great news for Australians.
"It means a very strong competitor domestically to stand the best of time. And also the ability to put our toe in the water and add services between Australia and Doha, which opens up 107 new destinations for Australians with one stop over Doha."