Virgin Australia will soon be partly owned by Qatar Airways and begin flying to Doha as soon as mid-2025, pending regulatory approvals.
Virgin confirmed the Gulf carrier’s intentions to take a 25 per cent stake in the Australian airline if approved by the Foreign Investment Review Board, and flagged it may soon fly to Doha from Sydney, Melbourne, Brisbane and Perth under a “wet-lease” agreement with its new backer.
Virgin Australia is set to add Qatar Airways to its register and start flying to Doha. Credit: Oscar Colman
Under a “wet lease”, one airline loans aircraft, crew and maintenance to another carrier. The arrangement would require approval from the Australian Competition and Consumer Commission.
Qatar applied to double its number of weekly services between Doha and Australia’s four biggest cities in 2023 but was rejected by the government despite overwhelming support from the bulk of the tourism industry. It has since applied again.
Qantas Airways – which has a code share partnership with rivals Emirates and Etihad – is the only known party to have objected to the additional bilateral air rights. The saga led to scrutiny over the relationship between Qantas and the government, which culminated in a parliamentary inquiry into bilateral air rights last September.
Virgin said the arrangement would allow it to “assess the longer-term merits and viability” of re-entering the long-haul market. It has not flown flights longer than eight hours since being saved from administration by Bain Capital in 2020.
Outgoing Virgin boss Jayne Hrdlicka said the proposed route was expected to generate $3 billion to the Australian economy through incremental visitor flows over the next five years.
“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,” she said.
Virgin is Australia’s second-biggest airline and only rival to Qantas Airways on major domestic routes. It controls about 30 per cent of the domestic market, with more than 60 per cent flown by Qantas and its budget carrier Jetstar. Regional Express withdrew from flying on major capital city routes and entered voluntary administration in August after ex-budget carrier Bonza collapsed this year.
Hrdlicka said Qatar’s backing would solidify Virgin’s longevity.
Outgoing Virgin boss Jayne Hrdlicka estimates the proposed Doha route would generate $3 billion towards the Australian economy.
“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,” she said.
The confirmation of Qatar’s stake follows more than a year of speculation about the future of Virgin, which intensified after Bain delayed a long-mooted float of the carrier on the ASX and its aircraft manufacturer Boeing became embroiled in a quality assurance scandal that delayed the delivery of its new fleet. Hrdlicka and ex chief development officer David Marr fronted its non-deal roadshow at the beginning of 2023 and have both since resigned.
Virgin was partly owned by Singapore Airlines, Etihad and Chinese groups HNA and Nanshan when it entered administration during the COVID-19 pandemic.
Virgin is due to report its full-year results to the Australian Securities and Investment Commission this month. It reported a $129 million profit in the 2023 financial year.
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