New Partnership: Qatar Airways and Virgin Australia

Qatar Airways Invests in Virgin Australia

Qatar Airways plans to buy a 25% ownership share in Virgin Australia from Bain Capital, pending approval. This move aims to strengthen the existing partnership between the two airlines. Qatar Airways, known as one of the world’s largest airlines, was recently honoured as the world’s best airline by Skytrax for the eighth time.

A closer partnership between Virgin Australia and Qatar Airways will increase competition in the Australian aviation industry. This will result in better airfare options and more choices for Australian consumers. The success of Virgin Australia is crucial for maintaining healthy competition within the country's domestic aviation sector. Qatar Airways Group's strategic investment will bring in valuable expertise and resources from a leading global airline. Additionally, the minority stake represents a significant investment as Virgin Australia moves towards potential public ownership, offering Australians the opportunity to invest in the airline's future.

Qatar Airways Group's investment will create new opportunities for collaboration with Virgin Australia, benefiting consumers and the economy. Pending approval from the ACCC, this collaboration will enable Virgin Australia to start flights from Brisbane, Melbourne, Perth, and Sydney to Doha, connecting to Qatar Airways' global network. These new flights will open up over 100 additional connecting routes across Europe, the Middle East, and Africa for Australian travellers. The proposed wet lease services are set to begin in mid-2025, allowing Virgin Australia to assess the long-term feasibility of operating wide-body aircraft and provide increased competition for Australians' long-haul travel needs in the short term.

The extended codeshare and collaboration agreement will offer access to more international destinations with better schedules and frequencies. It will also provide increased opportunities for Velocity and Qatar Airways Privilege Club members to earn and redeem rewards. Additionally, it will expand access to affordable fares for leisure travellers, small and medium-sized enterprises, and corporate customers.

The strengthened partnership has the potential to support substantial job creation and economic growth, not only within Virgin Australia but also across the wider aviation and tourism industries in Australia. A key area of future focus is sustainability, including the advancement of Sustainable Aviation Fuel. The partnership comes at an opportune time to explore possibilities as the new Western Sydney Airport and its economic ecosystem are developed.

STATEMENTS

Qatar Airways Group Chief Executive Officer, Engr. Badr Mohammed Al-Meer said: “We are pleased to announce our proposed strategic investment in Virgin Australia today. The alignment of our two airlines is significant, the relationships are deep, and we could not be more proud to bring even greater value and choice to all Australians. The investment further demonstrates our strategic alignment with Virgin Australia and our collective ambition to deliver the best possible service and value to Australian passengers.

“Not only that, but we believe competition in aviation is a good thing, and it helps raise the bar, ultimately benefiting customers. This agreement will also help support Australian jobs, businesses and the wider economy.”

Virgin Australia Group Chief Executive Officer, Ms Jayne Hrdlika, said: "This partnership brings the missing piece to Virgin Australia’s longer-term strategy and is a huge vote of confidence in Australian aviation. Importantly, it will further strengthen Virgin Australia’s ability to compete over the long term, which will inevitably translate into more choice and even better value airfares for consumers and additional Australian aviation jobs.

“Qatar Airways has been a valued codeshare partner of Virgin Australia since 2022. This investment by the world’s best airline will deepen a strong partnership by bringing critical scale and the best industry expertise to support our long-term competitiveness and growth.

“This proposed investment is subject to regulatory approval. We do not take this for granted and have made submissions outlining the benefits of the transaction for Australian aviation, Australian travellers and the Australian economy.”

Reflecting on the newly proposed long-haul services between Australia and Doha, Ms Hrdlicka noted that they are estimated to generate an economic benefit of around A$3 billion for the Australian economy through increased visitor flows over the next five years. There will also be additional benefits from the increased freight capacity, which will support Australia’s high-value exports to markets such as the Middle East and Europe.

She continued: “I am delighted that our closer relationship allows us to put our ‘toe in the water’ regarding long-haul international and deepen other areas of existing cooperation, including between our respective loyalty programs and code-sharing arrangements."

Ms Hrdlicka noted that she was particularly excited by the potential to expand the two airlines’ relationship into new areas, such as sustainability and development of the western Sydney aviation ecosystem, including broader jobs and training opportunities.

She stated: “Sustainable Aviation Fuel will play a critical role in aviation’s long-term decarbonisation effort. Virgin Australia has actively participated in the Federal Government’s Jet Zero Council, and we expect our partnership with Qatar Airways to support SAF opportunities in a manner consistent with the Federal Government’s Future Made in Australia agenda.

“I am super proud of the entire team at Virgin Australia. Together, they have done a wonderful job getting Virgin Australia back into a healthy, long-term competitive position that has attracted the world's best airline as a prospective investor. Every member of our team has contributed to this terrific outcome.”

Bain Capital Partner, Mr. Mike Murphy, said: "Virgin Australia plays a pivotal role in connecting Australians with each other, and with the world. Over the past four years, we've had the privilege of working alongside a team that has shown the dedication and tenacity needed to revitalise the airline. After a decade of losses resulting in administration, Virgin Australia has emerged as a strong and profitable company with an attractive market position, a loyal customer base, and a promising growth trajectory.

“We are pleased to welcome Qatar Airways Group as a partner at this stage to build on Virgin Australia’s strong foundation.”