Qatar Airways Eyes 20% Stake in Virgin Australia

Qatar Airways is currently in discussions to acquire a significant 20% stake in Virgin Australia, which is currently owned by Bain Capital, as reported by the Australian Financial Review (AFR).

Aim is to increase market share in Australia

The potential acquisition comes amidst fierce competition among airlines aiming to expand their market presence in Australia, a market currently dominated by Qantas, the country’s flag carrier.

Bain Capital had previously planned to list Virgin Australia on the Australian Securities Exchange with a target of A$1 billion (S$904.1 million), but this initiative faced delays.

Qatar Airways has encountered challenges in its relationship with Australia, particularly after facing opposition from the Labor government last year in its bid to increase flights by an additional 28 weekly services. The government’s decision was based on protecting local aviation jobs and ensuring profitability for Qantas’ investments in new aircraft.

Federal government intervention to block the deal

The deal with Virgin Australia, if finalized, could potentially be announced as early as next week. However, there remains a possibility that the federal government could intervene to block the acquisition by the Qatari government-owned airline.

Aviation experts speculate that if the deal proceeds, it could lead to reduced prices for international flights. The increased services and potential changes as part of the Virgin Australia acquisition could significantly impact pricing dynamics in the aviation market.