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Qatar Airways eyes Virgin Australia stake in deal that could drop ticket prices

After having its bid for more flights blocked, a major international airline is in talks for a stake in Virgin Australia, in a move that could lower ticket prices.

Qatar seeks to increase stake in Virgin Airlines

Government-owned Qatar Airways is looking to buy a 20 per cent stake in Virgin Australia, with experts suggesting the deal could lower fares.

Australian aviation expert Geoffrey Thomas said on Thursday a deal with Virgin would help the Qataris’ bid for more flight slots in Australia.

“But it also sets up a fascinating competition with its rival, Emirates,” by virtue of the Qantas-Emirate partnership, he said.

“You’re going to have two big powerhouses vying for Australian traffic ... This is good for competition.”

Domestic airfares could possibly decrease if the 20 per cent stake is approved, but Emirates and Qatar competing for international travellers would reduce international prices, Mr Thomas said.

Virgin Australia and Qatar Airways teamed up two years ago. Picture: Virgin Australia
Virgin Australia and Qatar Airways teamed up two years ago. Picture: Virgin Australia

Qatar Airways is one of the world’s biggest airlines, and was blocked by the federal government from putting on more flights last year. Any Qatari-Virgin deal would need Australian government approval.

The Australian Financial Review is citing unnamed sources close to the transaction, saying the Qatari interest could be formally announced next week.

Qatar Airways and Virgin Australia announced a strategic partnership in 2022; ostensibly to compete with Qantas and Emirates’ profit-sharing alliance on flights between Australia and Europe through Dubai.

Qatar Airways bid for more Australian flights was blocked last year. Picture: NewsWire / Andrew Henshaw
Qatar Airways bid for more Australian flights was blocked last year. Picture: NewsWire / Andrew Henshaw
The Qatari carrier flew Australians home from the conflict zone in Israel in October. Picture: NewsWire / Monique Harmer
The Qatari carrier flew Australians home from the conflict zone in Israel in October. Picture: NewsWire / Monique Harmer

After Qantas courted but ultimately rejected signing a deal with Qatar Airlines, Qantas opposed and the federal government blocked Qatar Airways getting more flights into Australia last year.

The AFR reports since Transport Minister Catherine King blocked Qatar Airways’ bid for expansion on “national interest” grounds, Sri Lankan Airlines and Turkish Airlines’ allotments have increased three and fourfold, though neither carrier has enough planes to fill their spots.

Virgin Australia is profitable, but a long-awaited IPO is still a matter of scuttlebutt. Picture: NewsWire / Nicholas Eagar
Virgin Australia is profitable, but a long-awaited IPO is still a matter of scuttlebutt. Picture: NewsWire / Nicholas Eagar

Virgin Australia is owned by Boston-based private equity firm Bain Capital. Bain purchased Virgin when the carrier was in voluntary administration in 2020. A Virgin listing on the Australian Securities Exchange has been teased and delayed since January 2023.

This week The Australian reported the IPO is slated to happen before Christmas.

Virgin returned a $129m profit last year.

Original URL: https://www.news.com.au/travel/travel-updates/travel-stories/qatar-airways-eyes-virgin-australia-stake/news-story/138d61ae13b7f57fabfc5c19aa388861