Qatar Airways buys Virgin Australia, raises stakes against Qantas By Reuters
Written by Praveen Menon and Himanshi Akhand
SYDNEY (Reuters) – Qatar Airways is to buy a 25% stake in Virgin Australia from US private equity firm Bain Capital, fending off fierce competition from Qantas Airways which has played down Australian routes and backed away from offering access to the carrier. of the Middle East.
The purchase of an undisclosed amount would need to be signed off by the Australian government, which rejected Qatar Airways’ requests last year to fly more services to Sydney, Melbourne, Brisbane and Perth.
“This partnership brings the missing piece to Virgin Australia’s long-term strategy,” Virgin Australia CEO Jayne Hrdlicka said in a statement.
“It means that we have an important shareholder with scale that we don’t have, with technology that we don’t have, that can help us compete better at home by giving us access to that scale,” Hrdlicka. he said later in an interview with ABC TV on Tuesday.
Shares in Qantas fell as much as 4.3% by 0239 GMT and were among the worst performers on the bench.
The stake sale also serves as a cornerstone investment ahead of Virgin Australia’s expected return to public ownership, the companies said.
Bain said last year it would explore an IPO for Virgin Australia, which it bought for A$3.5 billion ($2.42 billion) including debt after it was placed into voluntary administration in 2020.
Bain was looking at a $1 billion listing, but plans were delayed, Reuters reported last year.
Bain declined to comment further on the IPO plans.
CONSENT TO THE GOVERNMENT
As part of the deal with Qatar Airways, Virgin Australia plans to launch flights from Brisbane, Melbourne, Perth and Sydney to Doha on chartered aircraft by mid-2025, subject to approval from Australia’s competition regulator.
That would allow Qatar to get more traffic from its Doha hub, even if the Australian government gives in to Qatar Airways’ push for more flight rights.
Last year’s refusal raised questions about the Australian government’s relationship with Qantas, which prompted further outreach to the Qatari carrier. Qantas has a partnership with Dubai-based Emirates, a rival of Qatar Airways.
Qantas did not immediately respond to a request for comment.
Qatar Airways CEO Badr Mohammed Al Meer said in a joint statement on Tuesday that his airline believes competition in aviation “is a good thing and helps raise standards, ultimately benefiting customers.”
Australia’s Foreign Investment Review Board must approve the sale of Virgin Australia’s stake to Qatar Airways, but the treasury has the power after that to accept or reject recommendations and impose conditions on the deal.
“It would not be appropriate for me to pre-empt that process or comment,” Australian Treasurer Jim Chalmers told reporters after the deal was announced. “Overall, we want to see a strong, secure aviation industry that delivers to consumers.”
Qatar Airways also has minority stakes in British Airways owner IAG, Hong Kong’s Cathay Pacific Airways (OTC:) and China Southern Airlines.
($1 = 1.4474 Australian dollars)
