Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
Qatar Airways has agreed a deal to buy a stake in Virgin Australia, the country’s second-largest carrier, the latest in a number of international acquisitions by the Gulf airline.
The deal will see Qatar Airways buy a 25 per cent equity stake in Virgin Australia from private equity group Bain Capital, which bought the carrier originally set up by Sir Richard Branson out of administration during the pandemic.
The two airlines said in a statement that the deal was part of a wider plan to eventually publicly list Virgin Australia, where Qatar Airways expects to be a cornerstone investor.
Qatar Airways is wholly owned by the Qatari government, and the deal will be subject to regulatory approvals, including from the Australian Foreign Investment Review Board.
Virgin Australia will return to long-haul flying as part of the agreement, and will feed passengers into Qatar’s hub in Doha on flights from Brisbane, Melbourne, Perth and Sydney on leased aircraft from 2025.
The deal will increase Virgin Australia’s competition with national airline Qantas, and comes after Qatar Airways had pushed the Australian government for more flying rights to increase the number of routes it can operate into the country.
“We believe competition in aviation is a good thing and it helps raise the bar, ultimately benefiting customers,” said Qatar Airways chief executive Badr Mohammed Al-Meer.
Virgin Australia Group CEO Jayne Hrdlicka said she did not take regulatory approval “for granted”, and would work to outline the benefits for Australia’s economy and aviation sector.
“This partnership brings the missing piece to Virgin Australia’s longer-term strategy and is a huge vote of confidence in Australian aviation,” she said. “Importantly, it will further strengthen Virgin Australia’s ability to compete over the long term.”
Virgin Australia was one of the most high-profile corporate collapses triggered by the pandemic when it entered administration in April 2020, after Canberra and shareholders declined to bail out the carrier.
Bain Capital bought the business out of administration in June 2020, and in January 2023 outlined plans for a flotation “when the timing is right”.
The deal is the latest in a number of deals for Qatar Airways, which has bought stakes in several airlines to help build the feeder network of flights into its Doha hub. In August it agreed a deal to buy a 25 per cent stake in South Africa’s Airlink.
Qatar Airways already owns a 25 per cent stake in British Airways owner International Airlines Group. It also holds 10 per cent stakes in Latam Airlines and Hong Kong’s Cathay Pacific Airways, as well as 3.4 per cent in China Southern Airlines.
The airline is also working to close a long-planned investment for a 49 per cent stake in RwandAir, Rwanda’s state-owned airline.
Read the full article here
