Qatar Airways & Virgin Australia Deal Approved

Qatar Airways has seen its stake in Virgin Australia approved following Australian regulators giving the all-clear.

The Doha-based carrier had been seeking to expand into Australia but had its attempts rejected as regulators frowned upon the deal’s impact.

Some analysts considered the impact on Qantas a reason Australia rejected Qatar’s planned expansion, but they called this ridiculous.

After Qatar Airways could not expand with its aircraft, the carrier had to become more creative about how it would enter Australia.

As a result, the carrier began looking towards domestic carrier Virgin Australia, with Qatar believing it could take a minority stake to obtain greater access to the market.

Now, 25% of Virgin Australia, which is owned by the US private equity firm Bain Capital, will be sold to Qatar Airways, and questions are being asked about the impact this will have on the industry and Qantas.

Many believe the deal will positively impact the industry, notably increasing competition and driving airlines to offer better service and more affordable deals.

After speaking with unions and other relevant parties, Australia determined that Qatar Airways’ proposals remained in the country’s best interests and would have positive repercussions.

At times, regulators can reject consolidation efforts, even if they involve a minority stake, for fear that the impact on airlines would be negative rather than positive.

Virgin Australia knows that the approval is an essential step in the right direction for its business after it entered voluntary administration at the beginning of the pandemic.

Before the pandemic and the arrival of new backers, the airline offered international services with widebody aircraft. However, these were cut as part of downsizing efforts undertaken.

Looking ahead, the pair will look to work together to enhance international connectivity. These two airlines will benefit from the relationship, which will continue growing with time if it is successful and attains approval.

The Qatar Airways Plan Moving Forward

All these acquisition efforts are part of a broader plan unveiled for Virgin Australia, which involves resuming long-haul international flights.

Approval will allow Virgin Australia to operate flights to Doha, utilising Qatar Airways’ global network to service more than 100 destinations worldwide.

The current plan is for Virgin Australia to operate 28 weekly flights from Perth, Sydney, Melbourne, and Brisbane via Qatar Airways aircraft as part of a major service upgrade for the Doha-based carrier.