Qatar Airways is reportedly in talks to acquire as much as a 20% stake in Virgin Australia, according to Australia’s Financial Review.
The move for Australia’s second largest airline could be announced in early July 2024, according to the report, which quoted anonymous sources within the airline.
The report also claimed that the sale of an equity stake in Virgin Australia to Singapore Airlines had been considered at some point, but then ruled out.
The share purchase would likely strengthen the cooperation between the two airlines, which already have a partnership in place facilitating the flow of passengers between their respective networks and the connectivity between some 30 Australian destinations and Qatar Airways’ global network.
The existing collaboration between Qatar Airways and Virgin Australia in some respects mirrors the one in place between these two main airlines’ main competitors, Emirates and Qantas, to facilitate traffic between Australia and destinations across the globe.
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 impact of the COVID pandemic. Virgin Australia has since gone through a restructuring process that saw it lay off a significant number of staff and reduce the size of its fleet.
As of June 2024, Virgin Australia operates a fleet of 87 aircraft, all of them Boeing 737s (a mix of –700, -800 and MAX versions).
Bain Capital, the airline’s current owners, are said to be planning an IPO at some point in 2024. But the decision has been repeatedly delayed.
In any case, any deal to acquire a significant equity stake in Virgin Australia would need to be approved by Australia’s Foreign Investment Review Board. Australia’s government, which has had a somewhat troubled relationship with Qatar Airways on account of its restrictive market access policy, will have the final say on the deal.