Qantas unfazed by Chinese investment in Virgin: Joyce

Qantas chief Alan Joyce has shrugged off a $159 million investment in Virgin Australia by Chinese carrier HNA.

Qantas CEO Alan Joyce. Picture: Dylan Robinson

Qantas chief Alan Joyce has shrugged off any threats the recent $159 million investment by China’s biggest privately owned carrier in Virgin Australia could pose for the nation’s No 1 airline.

China’s HNA Group emerged as a surprise investor in Virgin this week when it struck a deal with the airline to take a 13 per cent stake in exchange for $159m.

The agreement covers code sharing, loyalty programs, lounge access and promotion of tourism and business travel. Virgin may also lease aircraft from HNA to fly to China.

Virgin boss John Borghetti described it as a “big coup” for the airline, which is currently going through a capital structure review to fix a balance sheet that is in need of as much as $1 billion to repair.

But despite opening up Virgin to the 1.2 million ­Chinese tourists coming to Australia each year with the promise of new routes into the lucrative region, Mr Joyce said he was not concerned about the deal and that Qantas’s partnerships with two of the three large state-owned carriers, China Eastern and China Southern, provided a greater competitive advantage.

“I would rather be in our position than our competitor’s position,” Mr Joyce said on the sidelines of the International Air Transport Association annual meeting in Dublin.

“With such a strong position that Qantas is in — with its cost base, with its product, with its brands — we will play our own game on this.

“And nothing that has happened in the past few days has changed that.”

With HNA on board the Virgin register, the airline now has five airlines as major stakeholders, including Air New Zealand, Singapore Airlines, Etihad Airways and Richard Branson’s Virgin Group.

But Mr Joyce was not fazed by the support that Virgin had attracted.

“When it comes to the competition, we want a stable competitive environment where the competition is acting commercially. Everybody wants that,” Mr Joyce said.

“I think it is very clear from what the shareholders (of Virgin) have said, they all want a return. It’s not making a return for them, they are burning through cash and they need to correct their balance sheet.”

Mitchell Bingemann travelled to Dublin as a guest of Airbus and IATA.