Qatar Airways Poised To Acquire Up To 20% Stake In Virgin Australia
Qatar Airways is said to be in discussions to purchase up to a 20% stake in Virgin Australia, as reported by Australia's Financial Review. The acquisition of the stake in Australia's second largest airline could be revealed in early July 2024, according to anonymous sources within the airline cited by the report. Previously, the sale of an equity stake in Virgin Australia to Singapore Airlines was considered but later dismissed.
The share acquisition would likely enhance the collaboration between Qatar Airways and Virgin Australia, which already have a partnership in place that enables passenger flow between their networks and connectivity between around 30 Australian destinations and Qatar Airways' global network. This partnership is similar to the one between Emirates and Qantas, which facilitates traffic between Australia and worldwide destinations.
In 2020, private equity firm Bain Capital acquired Virgin Australia for A$3.5 billion (US$2.45 billion) as the carrier struggled with the effects of the COVID pandemic. Since then, Virgin Australia has undergone a restructuring process that involved significant staff layoffs and fleet reduction. As of June 2024, the airline operates a fleet of 87 Boeing 737 aircraft, including – 700, – 800, and MAX versions.
Bain Capital is reportedly planning an IPO for Virgin Australia sometime in 2024; however, this decision has been repeatedly postponed. Any deal involving a substantial equity stake in Virgin Australia would require approval from Australia's Foreign Investment Review Board. The Australian government will have the final say on any such deal; it has had a somewhat troubled relationship with Qatar Airways due to its restrictive market access policy.
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