Qatar Airways is on yet another spending spree, and it is now being reported that the Doha-based carrier is in secretive talks to take a major stake in Australia’s second-largest airline, Virgin Australia.
Anonymous sources claim the talks could culminate in an official announcement as early as next week, although the deal would have to be cleared by Australia’s competition authority.
If a deal does emerge, then this will mark the second time that the Persian Gulf has taken a stake in Virgin Australia.
Back in 2012, Etihad Airways made an initial 3.9% investment in Virgin Australia as part of what turned out to be a disastrous equity investment scheme that saw the Abu Dhabi-based carrier plunge to massive losses.
By 2015, Etihad had built a near 25% stake in Virgin Australia, but the airline entered voluntary administration during the early days of the pandemic, and Bain Capital, a US private equity firm, emerged as the owner of the beleaguered carrier.
After leading a successful transformation of the airline, Bain had been eyeing an IPO for Virgin Australia, but that has now been delayed, and the Boston-based investment firm is now tapping potential suiters to take a stake in the airline.
Talks with Singapore Airlines have already been said to have concluded without a deal, but Qatar Airways could be an interesting partner given the airline’s keen interest in building its presence in Australia.
The Australian government has previously rebuffed Qatar’s efforts to secure additional flying rights to Australia, although the government-owned airline is once again exploring talks with regulators.
A stake in Virgin Australia could shake up the country’s aviation industry, especially in light of the failure of startup Bonza in the face of stiff competition from flag carrier Qantas.
Qatar Airways acquired some of Virgin Australia’s ex-long-haul fleet of Boeing 777s, and ultimately, the airline would presumably want to restore Virgin Australia’s long-haul network.
Qatar’s new CEO, Badr Mohammed Al Meer, said last month that he was hopeful of receiving positive news in the next few months about gaining extra traffic rights to Australia’s five busiest airports.
The Australian government previously defended its decision not to give Qatar Airways additional traffic rights because of a controversial incident in 2020 when a group of innocent Australian women were marched off a Qatar Airways plane at Doha Airport and subjected to forced vaginal exams.
