Qatar Airways to Acquire 25% Stake in Virgin Australia Ahead of Potential IPO, Reports Reuters

Qatar Airways has announced plans to acquire a 25% stake in Virgin Australia, the country’s second-largest airline, from U.S. private equity firm Bain Capital. The companies confirmed the joint agreement in a statement on Tuesday.

The financial details surrounding the minority stake purchase have not been disclosed, but it is being viewed as a significant investment prior to Virgin Australia’s anticipated return to public ownership. Bain Capital previously indicated intentions to explore an initial public offering of Virgin Australia after acquiring the airline for A$3.5 billion, which included liabilities, following its voluntary administration in 2020.

Virgin Australia CEO Jayne Hrdlicka remarked that the partnership with Qatar Airways represents a crucial element of the airline’s long-term strategy. She stated that this collaboration would enhance Virgin Australia’s competitive position, ultimately resulting in increased choices and improved fare options for consumers.

The transaction is still pending necessary regulatory approvals, including from Australia’s Foreign Investment Review Board.

In the past, Qatar Airways has faced challenges in expanding its flights from Australia, with the Australian government blocking its plans last year. This action sparked discussions about the government’s relationship with Qantas Airways, given that Qantas and Virgin Australia collectively dominate about 90% of the domestic aviation market in Australia.

As part of the agreement with Qatar Airways, Virgin Australia intends to introduce flights from Brisbane, Melbourne, Perth, and Sydney to Doha using leased aircraft by mid-2025, contingent upon approval from the Australian competition regulator. This move would allow Qatar Airways to increase traffic to its Doha hub, irrespective of the Australian government’s stance on its request for additional flying rights.

In addition to this latest investment, Qatar Airways holds minority stakes in several other airlines, including British Airways’ parent company, International Airlines Group, Cathay Pacific Airways, and China Southern Airlines.