In October 2024, Qatar Airways announced its intention to invest in Virgin Australia. While we’ve known for months that this has been in the cards, up until now, the deal has been awaiting approval from the Australian government. There’s now an exciting update, as that approval has been granted, so this deal can move forward.
In this post:
Qatar Airways’ investment in Virgin Australia approved
Qatar Airways Group is acquiring a 25% minority stake in Virgin Australia, in a deal that will shake up the Australian aviation market. Qatar Airways is of course owned by the Qatari government, while Virgin Australia is owned by Bain Capital, and has been wanting to go public.
The major catch has been that this deal has required approval from Australia’s Foreign Investment Review Board. There were concerns that the deal might be blocked, given that Qatar Airways is owned by a foreign government. Fortunately that’s not the case. Australian Treasurer Jim Chalmers has just approved this deal, saying the following:
“On the advice of the Foreign Investment Review Board, I have approved this proposal subject to legally enforceable conditions that ensure Australian representation on Virgin’s board and protection of its customer data.”
Meanwhile here’s what Qatar Airways Group CEO Badr Mohammed Al-Meer had to say:
“This latest development is a significant step towards solidifying the strong and enduring relationship that continues to evolve between Qatar Airways Group and Virgin Australia. It is also a huge boost to our shared ambition to create even greater choice and value for all Australian passengers, with healthy competition and world-class service at the very core of our collective offering.”
“We are confident in our ability to deliver an alliance between our two airlines that will provide immense benefit to customers, Australian businesses, Australian jobs and the wider economy.”
As you’d expect, this investment is largely about building closer ties between the two airlines. The two airlines argue that a strategic relationship will drive increased competition in Australian aviation, and will ensure Australian consumers have access to better value airfare and greater choice. This is also intended to serve as a cornerstone investment ahead of any anticipated return of Virgin Australia into public ownership.
Qatar Airways and Virgin Australia have had a partnership since 2022, including a codeshare agreement, reciprocal loyalty benefits, and more. On the surface, people might be confused by this partnership. Qatar Airways and Qantas both belong to oneworld, so you’d think that the two airlines would have close cooperation. Well, that’s very not much the case, despite their shared alliance membership:
- Qantas has a joint venture with Emirates, so prioritizes that partnership over the one with Qatar Airways
- For years, Qantas has been actively trying to block Qatar Airways’ growth in Australia, as Australia’s government has protectionist policies in place for Australian airlines
Emirates has historically been treated much better by the Australian government than Qatar Airways, and that largely comes down to Qantas’ support of Emirates:
- Australia’s bilateral agreement with the UAE allows for 168 weekly flights to Australia’s four main airports
- Australia’s bilateral agreement with Qatar allows for 28 weekly flights to Australia’s four main airports
In both cases, Australian airlines don’t fly to either airport, so why should Emirates and Etihad have access to 7x more flights in Australia than Qatar Airways, when both countries have airlines with the primary business model of connecting travelers to other countries?
Well, a major part of this investment is intended to address that imbalance.
Virgin Australia is resuming long haul flights, sort of
A major part of this deal involves Qatar Airways getting significantly more access to Australia, in partnership with Virgin Australia. In 2020, Virgin Australia restructured, and as part of that, the airline discontinued long haul flights, retiring its Boeing 777s and Airbus A330s.
With this investment, we’re going to see Qatar Airways’ presence in Australia nearly double, thanks to a creative arrangement:
- As of June 2025, Virgin Australia will launch flights to Doha (DOH), from Brisbane (BNE), Melbourne (MEL), and Sydney (SYD), and as of November 2025, Virgin Australia will launch flights to Doha from Perth (PER)
- These flights are intended to feed into Qatar Airways’ global network, opening up more than 100 connecting itineraries across Europe, the Middle East, and Africa
- Virgin Australia will operate these flights on a wet lease basis with Qatar Airways, meaning that Virgin Australia will simply market these flights, but they’ll be operated by Qatar Airways aircraft and crew
- As it’s described, this initial wet lease agreement is intended to “assess the longer-term merits and viability of wide-body aircraft flying while providing Australians with greater local competition for their long-haul travel needs in the near-term”
It’s kind of funny that Qatar Airways has acquired some former Virgin Australia Boeing 777s, and has maintained the interiors. While Qatar Airways plans to use 777s with Qsuites for these routes, it’s amusing to think that the airline could fly former Virgin Australia planes in these markets as well.
What a fun airline investment!
In general, I’m skeptical of airlines investing in other carriers, as there’s not a great track record of success for this. That being said, Qatar Airways investing in Virgin Australia has to be one of the smarter plays we’ve seen so far.
Don’t like the bilateral agreements a country is giving you? Just buy an airline there, and all your problems will be solved! 😉
In all honesty, for years, the Australian government wasn’t acting in the best interest of consumers, by allowing Qantas to have such a dominant position in the country, all while protecting the company’s joint venture with Emirates, and blocking competitors from expanding.
It’s just absurd that Emirates and Etihad are allowed to operate 7x as many flights to the four biggest airports in Australia as Qatar Airways. With Australia’s government being unwilling to change its stance, Qatar Airways is now being creative with expanding service to the country.
This arrangement is hugely beneficial to the Australian traveling public. Currently Australia essentially has one global carrier, while this will add a second competitor, giving some much needed competition to Qantas and Emirates.
For what it’s worth, Qatar Airways already has a pretty robust portfolio of airline investments. Qatar Airways owns a 20% stake in IAG (the parent company of British Airways, Iberia, and Aer Lingus), a 10% stake in Cathay Pacific, and a 10% stake in LATAM. However, these aren’t terribly “active” investments, which is to say that these are well established airlines that mostly have a track record of profitability, and Qatar Airways didn’t come in with the goal of changing these airlines.
Qatar Airways also recently announced plans to buy a 25% stake in South Africa’s Airlink, and is nearing a stake in RwandAir, given that Qatar’s government is a major shareholder in the country’s new airport.
Bottom line
Qatar Airways is buying a 25% stake in Virgin Australia, and that deal has now been approved by the Australian government. The oneworld carrier has been trying to grow in Australia, but has been prevented from doing so, as Qantas has been campaigning against the airline. That’s why Qatar Airways and Virgin Australia have a partnership in the first place.
While airline investments often don’t end well, Qatar Airways sees this as a strategy to grow in the country, and frankly, it’s kind of brilliant. We’re going to see Qatar Airways’ service to Australia basically double, thanks to a creative wet lease agreement with Virgin Australia.
What do you make of Qatar Airways investing in Virgin Australia?
Oh yes - another government owned airline buying an Australian airline for "customer improvement".
Historically this has always ended well. - last time Virgin was owned by 3 government backed airline - tried to put Qantas in the ground - went bankrupt after having a loss for 7 years.
Australia relies so heavily on aircraft movements for transport around our massive but sparsely populated country - strong airlines are good - having them owned...
Oh yes - another government owned airline buying an Australian airline for "customer improvement".
Historically this has always ended well. - last time Virgin was owned by 3 government backed airline - tried to put Qantas in the ground - went bankrupt after having a loss for 7 years.
Australia relies so heavily on aircraft movements for transport around our massive but sparsely populated country - strong airlines are good - having them owned by foreign governments not great.
As to travelling public? We pay more for our fairs. But I tell you what, every time I head to North America, have to pour out my water as I go through security - deal with sad and angry customer service and pay close to what I do here I remember just how easier and wonderful flying Australian carriers are.
We shall wait an see how long Virgin lasts this time. Maybe we can revive Ansett again - or REX - Or Bonza - oh wait.
While Australia has probably been the most aggressive in picking one of the Middle East carriers over another, not every country sees the benefit of having unlimited competition from the ME4 (if TK is included). EK got in most markets as the first mover which is part of why QR has been more aggressive with its equity purchases.
Let's see if prices from Australia to Europe come down
We are long term VA Platinum and fully embrace this deal. We hope for more flights from AU on Qatar metal and expansion to other routes. We will fly this, bsuiness class every time, often.
This is welcome and overdue.
As an Australian , the government protection of our so called National airline “ Qantas “ is nominally a good thing.
Sadly Qantas has abused that support by refusing competition thus driving up prices artificially.
Additionally , Qantas has further abused this support by being so Sydney-centric . I haven’t travelled internationally on Qantas for over 30 years! Why? Because so few QF flights go non stop from Melbourne (currently...
This is welcome and overdue.
As an Australian , the government protection of our so called National airline “ Qantas “ is nominally a good thing.
Sadly Qantas has abused that support by refusing competition thus driving up prices artificially.
Additionally , Qantas has further abused this support by being so Sydney-centric . I haven’t travelled internationally on Qantas for over 30 years! Why? Because so few QF flights go non stop from Melbourne (currently 2nd most populous and soon to be most populous city). To fly to many ports one must fly domestic to Sydney, collect bags , change terminals, recheck in etc - typically adding 4 or more hours, all whilst paying more for the privelege !!
Bilateral agreement with the UAE = 168 flights.
Bilateral agreement with Qatar = 28 flights.
The ratio is 6 unless Qatar gets 24 flights.
6x or 7x?
Another government happy to cuck-out to a known state sponsor of terrorism because they have a giant chequebook. Weak.
Please stop using the word "fun" as you have. It's not a playground. I recommend you read a book released last October by Joe Ashton which was a best seller, called "The Chairmans Lounge". It provide a whole insight into the previous qantas CEO.
Do you always piss in the campfire? Lighten up bud...
You don't seem very "fun", Crosscourt
Great news. Qantas has been harnessing ridiculous governmental protections and acting in best interest of their shareholders, to the detriment of Australians and tourists. Hoping Qatar takes a swing at the pan-pacific routes into the USA. Most overpriced routes out there.
You have a choice of Qantas, American, United, Delta, Hawaiian, Air Canada, Air New Zealand, or Fiji Airways to get to North America from Australia. Given that Qatar's business class fares are often at a premium to other carriers, how would their entry into the trans-Pacific market drive fares lower?
Qatar doing that makes no sense though, unless Australia would grand them the rights to fly fifth freedom flights directly between Australia and the US.
Something like SYD-DOH-SFO is over 2x the length of SYD-SFO, in fact, each individual leg is longer than SYD-SFO.
It would be Virgin Australia flying to the US if it ever happens. That is what is implied here. If Virgin Australia can get some Qsuite equipped planes wet leased from Qatar Airways for the US routes, that would an interesting option.
I have always found that Qantas not Qatar charges the highest fares. Largely based on an outdated view of Qantas as Australia's National Carrier, which only was true when the Australian Government owned them. Since those days Qantyas quality and especially customer performance has slid way down the ladder. Qatar is vastly better, reliable throughout the pandemic and priced appropriately to their excellent hard and soft product.
It's a really tricky balance. Australian government should be protecting Australian citizens' interests and Australian businesses.
However, Qantas is deeply in bed w/ the Ozzie government and like all profit driven corporations, they do not have the Australian consumer's best interests in mind.
Some level of healthy competition is good, however, there is an imbalance in terms of cost and operating structures between ME3 and Australian carriers.
Ultimately, getting more service and connectivity is beneficial...
It's a really tricky balance. Australian government should be protecting Australian citizens' interests and Australian businesses.
However, Qantas is deeply in bed w/ the Ozzie government and like all profit driven corporations, they do not have the Australian consumer's best interests in mind.
Some level of healthy competition is good, however, there is an imbalance in terms of cost and operating structures between ME3 and Australian carriers.
Ultimately, getting more service and connectivity is beneficial for Australians since they're literally so far away from anything, it's hard to get good itineraries to anywhere.
Genius. Now do same in Canada, so we can stop subsidizing our utter garbage national carrier by not allowing QR in.
Agreed, as someone based out of Western Canada, I'd love for QR to serve other markets like YVR/YYC. It's just painful to fly to YYZ/YUL or SEA (and the other way around) first before even being able to get on a metal to get across the Atlantic.
They don't care about their alliance, and instead make investments in other airlines and focus on strategic partnerships. How 'premium' of them!
@ Jerry -- You're referring to Qatar Airways? Because the airline wanted a close partnership with its alliance partner Qantas, but was rejected, with Qantas actively campaigning against the airline.