Qatar Airways ready to buy up to 20% stake in Virgin Australia: reports

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Qatar Airways is reportedly in talks to acquire up to a 20% stake in Virgin Australia, according to Australia’s Financial Review.

The decision by Australia’s second-largest airline could be announced in early July 2024, according to the report, which cited unnamed sources within the airline.

The report also claimed that the sale of a stake in Virgin Australia to Singapore Airlines was considered at one point, but then ruled out.

The share purchase would likely strengthen cooperation between the two airlines, which already have a partnership facilitating the flow of passengers between their respective networks and connectivity between around 30 Australian destinations and Qatar Airways’ global network.

The existing collaboration between Qatar Airways and Virgin Australia in some ways mirrors that in place between these two major airlines’ main competitors, Emirates and Qantas, to facilitate traffic between Australia and destinations around the world.

Private equity group Bain Capital bought Virgin Australia in 2020 for A$3.5 billion (US$2.45 billion), as the Australian carrier was reeling from the COVID pandemic. Virgin Australia has since gone through a restructuring process which has seen it lay off a significant number of employees and reduce the size of its fleet.

As of June 2024, Virgin Australia operates a fleet of 87 aircraft, all Boeing 737s (a mix of –700, -800 and MAX versions).

Bain Capital, the airline’s current owners, are reportedly considering an IPO in 2024. But the decision has been delayed several times.

In any case, any deal to acquire a significant stake in Virgin Australia would need to be approved by Australia’s Foreign Investment Review Board. The Australian government, which has a somewhat difficult relationship with Qatar Airways due to its restrictive market access policy, will have the final say on the deal.