This is a spicy story. The TLDR is that Qatar Airways is looking to purchase a 25% stake in Australian airline Virgin Australia. Also, the middle eastern carrier has some ambitious plans to bring back Virgin Australia to long-haul services in not that long at all. Now, let’s get into the details what can be a major shift in the Australian aviation market.
Qatar Airways Taking Over 25% of Virgin Australia
The investment still must go through the scrutiny of the Australian authorities. However, if it is approved, as seems extremely likely, Qatar Airways will take over a 25% minority stake in Virgin Australia.
That 25% will be purchased off the current majority stake holder, Bain Capital. Therefore, the American investment fund will lower its stake to 68% with the Qatari airline entering the company equity.
Taken out of context that 25% might not look all that important or significant. However, it is incredibly significant as it ensures Virgin Australia an extremely strong and capable partner to regroup and give large scale operations another try.
Also, the agreement will see the two airlines’ frequent flyer programs strengthen ties. There will be some sort of reciprocity between VA’s Velocity and Qatar Airways’ Privilege Club.
Virgin Australia Returning to Long-Haul Flights Soon?
What is most surprising of the announcement are Qatar Airways’ plans and ambitions for Virgin Australia. The middle eastern carrier plans to ramp up the Aussie carrier’s operations.
It intends to strengthen the airline’s presence both within Australia and internationally. Yes, that’s right, internationally. Furthermore, the intention is not to fly internationally as done up to a few months ago, with quirky services to Asia via Darwin, but on long-haul services.
The first and only mentioned services in the press release are from all Australian major cities to none other than Doha. A way of cementing the Qatar Airways-Virgin Australia partnership and allowing an integration between operations.
These long-range operations, according to Qatar Airways, should take off in mid-2025. However, if you are at all familiar with Virgin Australia’s fleet you might be scratching your head right now. Virgin Australia currently doesn’t own any long-range capable aircraft. So how will it launch these flights?
QR plans to help the Aussie carrier launch these ULR flights to Doha by taking on in its fleet some capable wet leased planes. I’ll be on the lookout to understand if they’ll be Qatar Airways planes or if they will come from some other airline.
Qatar Airways Upsetting another oneWorld Airline?
What makes this whole story a little spicy is the fact that Qatar Airways, a oneWorld airline, is partnering with the main domestic competitor of another airline of the same alliance. Virgin Australia is Qantas’ main and only domestic competitor.
Despite being part of the same alliance, Qatar Airways-Qantas relations aren’t exactly as good as can be. Australia is a strategic market for Qatar Airways which, numerous times has tried to acquire more flight rights to the country. Flight rights that have been rejected by the government in what has been judged by many as blatant protectionism.
So, when the Qatari airline saw the opportunity to invest in Virgin Australia it didn’t think about it twice. Buying into the Australian airline will help it further strengthen its position in the country and increase its market share.
Add Comment