Qatar Airways wins approval for stake in Virgin Australia

A senior government minister announced Thursday that Canberra will allow Qatar Airways to purchase a 25% share in Virgin Australia, a struggling airline, bringing international competition to the country’s Qantas-dominated aviation industry.

After the agreement was approved by Australia’s competition authority, Qatar will pay an undisclosed amount to purchase a minority share in Virgin Australia.

“It is expected to strengthen competition in the aviation sector,” Treasurer Jim Chalmers said in a statement.

In October of last year, the airlines and Bain Capital, the company that owns Virgin, made the long-rumored announcement.

In order to increase competition on the long-haul routes that Qantas has long controlled, they promised to operate additional direct flights from Australia to Doha.

Together with its low-cost brand Jetstar, Qantas holds a dominant market share of over 61 percent in Australia and has significant political influence.

In 2020, Virgin Australia filed for bankruptcy, firing hundreds of employees when international flights were halted due to the Covid-19 pandemic.

US private equity giant Bain Capital came to the airline’s rescue after the Australian government refused to bail out the majority foreign-owned company.

Qatar Airways has been looking to increase its foothold in the Australian market.

In 2023, Qatar launched a bid to put on 21 extra international flights to and from Australia each week.

But the Australian government snubbed that request, citing a 2020 strip search scandal at Doha Airport as a “factor”.

Women were pulled off 10 Qatar Airways flights at Doha Airport and forced to take invasive gynaecological exams after a baby was abandoned in an airport bathroom.

After the experience, three Australian women filed a lawsuit against Qatar Airways, but the matter was ultimately dropped.

Last year, Badr Mohammed Al-Meer, the CEO of Qatar Airways, stated that Australians will benefit from the proposed partnership between Qatar and Virgin.

“We believe competition in aviation is a good thing and it helps raise the bar, ultimately benefiting customers,” he said.

“This agreement will also help support Australian jobs, businesses and the wider economy.”