- Qatar Airways discusses Virgin Australia involvement
- Domestic flights could be cheaper
Government company Qatar Airways is looking to buy a 20 per cent stake in Virgin Australia.
One expert says the deal could possibly reduce domestic travel prices, but will more likely reduce international fares.
Speaking on the Today show on Thursday, Australian aviation expert Geoffrey Thomas said a deal with Virgin would help the Qataris secure more flying slots in Australia.
“But it also sets up fascinating competition with its rival, Emirates,” under the Qantas-Emirate partnership, he said.
“You’re going to have two big powers competing for Australian traffic… This is good for competition.”
Domestic airfares could possibly decline if the 20 percent share is approved, but competition from Emirates and Qatar for international travelers would drive down international prices, Thomas said.
Qatar Airways is one of the world’s largest airlines and was blocked from further flights by the federal government last year. Any Qatari-Virgin deal would need Australian government approval.
The Australian Financial Review, citing unnamed sources close to the transaction, says Qatar’s interest could be formally announced as early as next week.
Government-owned Qatar Airways seeks to buy 20 per cent stake in Virgin Australia (file image)
Qatar Airways and Virgin Australia announced strategic partnership in 2022; ostensibly to compete with Qantas and Emirates’ profit-sharing alliance on flights between Australia and Europe via Dubai.
After Qantas courted, but ultimately declined, a deal with Qatar Airlines, Qantas balked and the federal government blocked Qatar Airways from getting more flights to Australia last year.
The AFR reports that since Transport Minister Catherine King blocked Qatar Airways’ expansion bid on “national interest” grounds, allocations to Sri Lankan Airlines and Turkish Airlines have increased three- and four-fold, even though neither carrier has enough aircraft to fill its slots.
Virgin Australia is owned by Boston-based private equity firm Bain Capital.
Bain bought Virgin when the airline was in voluntary administration in 2020.
Virgin’s listing on the Australian Stock Exchange has been teased and delayed since January 2023.
This week, The Australian reported that the IPO is scheduled for before Christmas.
Virgin made a profit of $129 million last year.
Domestic airfares could possibly decrease if 20 percent share is approved (file image)