If Qatar Airways Acquires a Stake in Virgin Australia

DALLAS — Doha-based Qatar Airways (QR) has set its eyes on Virgin Australia (VA) as part of its acquisition strategy to expand its market share in the country, this according to the Australian Financial Review (AFR).

Bain Capital-owned VA entered administration during the pandemic. As part of its restructuring, VA streamlined its fleet to single-aisle aircraft, focusing on short- to medium-haul routes across Australia and nearby regions.

On its part, QR continued operations during the COVID-19 pandemic and has since identified significant opportunities for growth; hence the idea of the acquisition.

Increasing its flights to key Australian cities, QR could lower prices, enhance travel convenience, and offer greater onward connectivity.

Expanding a Partnership amid Opposition

In 2022, QR and VA announced a new partnership for seamless travel across both carriers’ networks, giving the former a deeper footprint in Australia, However, QR's growth efforts have faced resistance in the smallest continent.

In 2023, Qantas' (QF) outgoing CEO, Alan Joyce, supported the government's decision to block QR's expansion—the Qatari airline had sought 21 additional weekly services to Australia's East Coast, a move projected to boost tourism revenue by US$800 million.

That same year, Mr. Joyce would face tough questioning regarding allegations of protection from competitor QR and a lawsuit from the Australian Competition and Consumer Commission (ACCC). Joyce argued that rejecting QR's expansion was in Australia's best interests, a stance he disclosed during a committee investigation into the cost-of-living crisis.

With Mr. Joyce gone, if Qatar Airways is considering acquiring a 20% stake in VA and proceeds with the acquisition, it would gain greater access to the Australian market through an established partner. Will it face another form of jingoistic rejection?