Report: Qatar Airways set to buy into Virgin Australia
The relationship between Oneworld members Qantas and Qatar Airways could take another left turn…
By David Flynn, September 2 2024
Qatar Airways looks set to take as much as a 20% stake in Virgin Australia, with the investment announced as early as this week – resulting in a seismic shake-up in the country’s aviation industry.
It’s a scenario that has been indulged ever since the airline was rescued and rebooted in 2020 under the private ownership of Bain Capital, but has gained new altitude in recent months.
A report in the typically well-sourced Australian Financial Review says Qatar Airways “is close to finalising a deal to acquire a minority stake in Virgin Australia, almost 1½ years after its private equity owner Bain Capital delayed a billion-dollar float of the carrier and pivoted to courting strategic buyers.”
The AFR suggests “Qatar is within days of signing the deal, although it would be conditional on receiving approval from the Foreign Investment Review Board.”
Qatar Airways is no stranger to this strategy: the Gulf carrier already holds a 10% stake in Cathay Pacific plus 20% in IAG, the parent of British Airways, Iberia and Aer Lingus, among others.
Last month saw Qatar Airways pick up a 25% stake in South Africa’s Airlink to strengthen its presence in the African aviation market.
So what could this mean to travellers?
As previously reported, Qatar Airways has already applied for an additional 28 flights per week from its Doha hub into Sydney, Melbourne, Brisbane and Perth.
This would mean a double-daily service for Sydney, Brisbane and Perth, with three flights per day for Melbourne.
Any significant investment in Virgin Australia would obviously add weight to the argument to add those flights, and perhaps even more.
The partnership between Virgin Australia and Qatar Airways might even be burnished to add benefits beyond the current earning of Velocity Points and status credits, alongside perks for Velocity members such as access to Qatar’s frequent flyer lounges in Doha.
Qantas & Qatar Airways
Meanwhile, the already frosty relationship between Qantas and Qatar Airways would descend by several degrees.
Despite both being members of the Oneworld alliance, there’s been little love lost since Qantas lobbied against Qatar’s expansion into Australia.
Oneworld is admittedly a broad church. While Qantas and American Airlines are close collaborators, Qantas and Cathay Pacific might be better described as ‘frenemies’.
There are also bespoke partnerships with airlines outside of Oneworld, and often with members of competing alliances, such as Qantas working with Air New Zealand (from Star Alliance) on domestic flights and Shanghai-based China Eastern (from SkyTeam).
Qatar Airways is already preferencing Virgin Australia Velocity members for the release of points-based award seats – especially for its highly-regarded business class Qsuite – while reportedly throttling their availability to Qantas frequent flyers and leaving Qantas only with poor-value economy redemptions.
Executive Traveller readers: if Qatar Airways takes a sizeable stake in Virgin Australia, how do you expect this will change Virgin?
Qantas - Qantas Frequent Flyer
21 Jan 2014
Total posts 318
The only reason one buys 20% of something is because they want to eventually own at least 51%, and that will be the real issue for Qatar, and the unions will knock this on the head before it even starts so doubt it would happen, Singapore Airlines on the other hand would not face the same issues and would be an ideal owner.
QF
11 Jul 2014
Total posts 982
When I sell something I would like to sell it 5 times at 20% each time.
06 Oct 2021
Total posts 10
Selling 6 x 20% is even better (with credit to Mel Brooks)
04 Sep 2019
Total posts 65
SG buying virgin would be heavenly
07 Feb 2018
Total posts 20
They already got burnt last time Virgin went broke!
Qantas - Qantas Frequent Flyer
04 Nov 2017
Total posts 332
Not to mention Singapore's previous failures with Tiger Airways and Ansett beforehand. At the same time also not surprising SQ are investing heavily in the Indian market through the Vistara/Air India instead of Australia due to the larger population.
21 Jul 2014
Total posts 12
They wouldn't lower their standards or image by buying into Virgin after last time and Qatar is more of a risk to Emirates with this partnership (ownership) than Singapore air
QF
11 Jul 2014
Total posts 982
If this was on the stock market I would have made a bucket load.
As per above "it will result in a seismic shake-up in the country’s aviation industry" correction, it will impact the Global Airline market with Qatar having an option in creating its own alliance group and bringing Avios and VA Frequent Flyer having its digital currency.
Virgin Australia - Velocity Rewards
24 Jan 2018
Total posts 729
I'm still struggling to see the benefits that might flow to me, given the price of Qatar fares. I'm much rather it was Singapore and Turkish Airlines.
Qantas - Qantas Frequent Flyer
05 Oct 2016
Total posts 107
QR prices? cheaper than most as from what I can see, at least in business class. I've priced a range of airlines and options for AU to EU over the next two months this week and QR pretty much wins hands down most weeks.
QF
11 Jul 2014
Total posts 982
I agree BT 100%
Virgin Australia - Velocity Rewards
24 Jan 2018
Total posts 729
Nice to hear from you, still reading your PMs?
27 Sep 2022
Total posts 1
Prices?? Singapore is always more expensive than Qatar. You need to spend a little more time comparing.
QF
11 Jul 2014
Total posts 982
Should I add the retiring Qatar 787's being leased to Virgin to restart the LA leg?
20 Nov 2015
Total posts 467
Ex-QR 787s for VA makes a lot of sense, but Virgin resuming LAX makes no sense at all given its partnership with United Airlines. VA 787s would make more sense on carefully selected routes into Asia, and maybe reclaiming their Tokyo Haneda slot. Also BNE-HKG could be great although as soon as they announce that, watch for Qantas to step lively and restart BNE-HKG!
12 Dec 2012
Total posts 1027
If VA doesn't want to lose their HND slot to QF, they need a long range wide body to operate to HND from an AU capital city fairly quickly (operating in the next 3-4 months).
Qantas - Qantas Frequent Flyer
10 Apr 2016
Total posts 60
Qatar Airways is only interested in order to generate traffic. Singapore Airlines was once an owner of Virgin. Making these discussions public no doubt would be deliberate in order to stoke the interest and drive up the price. The sale of a 20% stake will create a baseline for the eventual IPO. Assume whilst Singapore Airlines was burnt last time they will not sit idle given the traffic they have lost to Qatar that was once directed their way.
Qantas - Qantas Frequent Flyer
04 Nov 2017
Total posts 332
Considering SQ are preparing to become part owners of the combined AI/UK group rather than risk it again on a fourth Australian go, this suggest India is a larger revenue market than Australia for the wider Singapore Airlines group.
Qantas - Qantas Frequent Flyer
04 Nov 2017
Total posts 332
Considering the reports in AFR that VA reps had to approach SQ for interest and they've declined to reply suggests that SQ are learning from their 3rd failed attempt in the Australian market through losing millions on their VA 1.0 investment (and losing billions combined across their Ansett, Tiger and Virgin 1.0 attempts).
It'll probably take some considerable convincing to the SQ board if the Singapore fans aren't still giving up them "buying and taking over" VA.
QF
11 Jul 2014
Total posts 982
When SQ put an A350 into Cairns that gave an indication of what they thought would happen.
Qantas - Qantas Frequent Flyer
04 Nov 2017
Total posts 332
Plus SQ increasing DRW to daily 737-8 MAX when they previously operated 3/4 weekly year round.
I wouldn't be surprised if the SQ group dabbles in OOL (again) at some point, this time with their full service carrier SQ instead of their LCC (TR).
Qantas - Qantas Frequent Flyer
05 Oct 2016
Total posts 107
Demonstrating yet again the stupidity of QF. As I've said many times before they should have broken off with EK and got into bed with QR - which would have fed QR and not seen them trying to make friends with someone else...
Qantas - Qantas Frequent Flyer
26 Nov 2012
Total posts 120
Yes I remember a certain CEO saying when referring to EK over QR “why go with a Holden when you can have a Mercedes “ or words to that effect. Bad choice could/comparison in the long run I think. But live and learn.
Qantas - Qantas Frequent Flyer
05 Oct 2016
Total posts 107
Hilarious :) Hadn't heard that one, love the Karma - instead QF are now sticking to the Mercedes when they could instead have a Bentley!
05 Aug 2023
Total posts 15
And yet that same CEO turn his vehicle from a Commodore to a Barina, or worse, a Gemini!!! :)
23 Apr 2015
Total posts 23
Not a totally surprising move at a high level, and would bring investment and expertise to Virgin, as well as access to fleet renewal orders potentially etc.
However that aside it just doesn’t sit well with me that a foreign state (with questionable human rights) owned carrier would have an influence on the Australian market and on a brand (VA) which is known to be progressive as both an employer and as an airline serving the diverse Australian public. A quick google on Qatar Airlines history of rights for their female employees will give you some insight and food for thought, however there is no denying how shiny and luxurious their aircraft and Q Suites are and why Australians generally love the airline - but at what cost?
Qantas - Qantas Frequent Flyer
05 Oct 2016
Total posts 107
ok. You think QF respects their workers rights legally at all times?
Qantas - Qantas Frequent Flyer
26 Nov 2012
Total posts 120
Possibly, but their country doesn’t fire their employees and jail them after entrapping them for being gay.
16 Dec 2016
Total posts 58
What a stupid comparison. Qantas is held to account by some of the strictest employment laws in the world and when it made a mistake paid a massive price. Qatar ignores basic human rights and pays disgraceful wages so that you people that comment here can praise the Q-Suite. I wish Virgin Australia success but Qatar is dirty money.
27 Jun 2024
Total posts 2
Except when qantas bypasses those said laws and imports comparative slave labor to crew their Jetstar flights in domestic sectors. Under the guise of “tag flying”. They’re so far from a moral compass it’s a joke.
Virgin Australia - Velocity Rewards
06 Aug 2017
Total posts 84
I'm no fan of the Qatar government but in Qatar Airways' defence, their new CEO, Badr Mohammed al Meer, is very different from their former CEO, and he has behaved totally differently towards Qatar's employees. I don't think it's fair to tar the current leadership of the airline with the same brush as (former CEO) Akbar el Baker. The new CEO has lifted a lot of the restrictions on employees and reports suggest that staff morale is sky-high since his appointment.
16 Oct 2012
Total posts 49
Well observed. And any gay Australian would be advised to avoid all the ME carriers entirely. Particularly if their itinerary involved a stopover in the region. The Smart Traveller website makes the situation in the ME clear.
07 Mar 2022
Total posts 63
Interesting the comments made about females in business and is this why the pin has been pulled by JH and also what about the staff at VA, forget about the guy passengers.
03 Jun 2019
Total posts 32
I remember from the Qantas Privatisation Act that foreign ownership exceeding 49% will result in the airline loosing all of its international traffic rights. Does that apply to Virgin as well?
27 Jun 2024
Total posts 2
Why would the “Qantas Privatisation Act” apply to Virgin?
QF
11 Jul 2014
Total posts 982
I'd be really interested for someone to prove to me that 51% of Qantas is owned by Australians!!!
Qantas - Qantas Frequent Flyer
08 Dec 2014
Total posts 52
UUAA, it’s a legal requirement (that only applies to Qantas) and if foreign ownership ever tips above 49%, whoever bought in last is forced to sell their shares.
Not sure where they are now but, during the pandemic, Australian ownership of Qantas was as high as 80%.
Virgin Australia - Velocity Rewards
24 Jan 2018
Total posts 729
NO WAY IN THE WORLD is Qantas beneficially owned on a consistent basis by 51%+ by Australian resident shareholders. I suspect it gyrates over time between 40% and 60% Australian ownership. All that obligation accomplishes is 'protect' Qantas from foreign takeover and prevent internal enthusiasm for it to happen, thus keeping management and control in Australia. But I think you'll find it's been left to Qantas to self-police its own compliance with that obligation.
Full Disclosure: I'm not a closet ASIC-junkie in possession of confidential information, just my own opinion.
QF
11 Jul 2014
Total posts 982
I’ve had the same advice B-T, let’s lobby the government, I’ve got a brother who is forensic accountant, he would love the job.
Qantas - Qantas Frequent Flyer
08 Dec 2014
Total posts 52
Evian - Clearly it doesn’t apply to them as Virgin is practically 100% foreign owned now.
Virgin Australia - Velocity Rewards
30 Aug 2018
Total posts 13
The workaround is to sell 51% of the international subsidiary to Australian investors (e.g a super fund). This was used by Ansett (under AirNZ) and by VA1, and I believe that VAI (International) is still in the VA company structure.
Given the existing constraints around Qantas, it's unlikely QF would ever use this structure, though I recall that one of their previous CEO's has complained about it.
Qantas - Qantas Frequent Flyer
05 May 2015
Total posts 5
Would prefer SQ ownership and an eventual application to join Star Alliance.
03 May 2013
Total posts 678
It's high time Qatar Airways was kicked out of oneworld. Absolutely no benefit whatsoever.
Qantas - Qantas Frequent Flyer
07 Aug 2013
Total posts 249
Correction required, it's just minimal benefit to you as a QFF, you still get economy reward seats though! The other One World carriers including BA who share the same avios program enjoy greater advantages.
Virgin Australia - Velocity Rewards
24 Jan 2018
Total posts 729
I do wish Star Alliance had its own form of 'currency' like the Avios program, and that Virgin joined that alliance.
Virgin Australia - Velocity Rewards
11 Dec 2014
Total posts 8
I too would love to see VA join Star Alliance. Ever since we lost Ansett we have been flapping in the breeze. QF is Oneworld, maybe Rex could join Skyteam and then VA join Star Alliance ?
03 Mar 2023
Total posts 33
Completely disagree. I've recently flown Qatar on a Finnair code share flight from Doha to Brisbane. As a Finnair OneWorld Gold member it worked like a dream. And now Finnair also has Avios along with BA and Qatar everything is even more seamless. Qatar is actually working WITH its OneWorld partners, unlike Qantas. Qantas can't even work with Cathay Pacific. It's not Qatar that needs to be kicked out of OneWorld - it's Qantas!!
Virgin Australia - Velocity Rewards
07 Dec 2015
Total posts 54
I think VA may ultimately be forced (again) out of their current structure and QR is likely a smart investor and operator to have in your corner. VA needs a long term committed airline investor making longer term strategic and structural decisions. As much as I've loved SQ over the years (not so much in recent years) and their long association in the local market, I reckon they are out - burnt too many times in the Australian market
As unpopular and crazy as it might sound, I reckon VA needs to go FSC or ULCC - they can't stay in the middle if they want to grow beyond where they are now.
Qantas - Qantas Frequent Flyer
04 Nov 2017
Total posts 332
Echoing what was said in the post above, considering the AFR reports that the VA reps had to approach SQ (instead of the other way around) and show very little (if not zero interest) says it all, SQ are still too wary/still burnt from their three previous attempts in the Australian domestic market over the past few decades.
I don't see VA going full (U)LCC, their Velocity Frequent Flyer was the only division that was consistently making revenue/profits throughout both incarnations of Virgin Australia. To sell VFF off to go full ULCC is "cutting off your nose to spite your face"
Virgin Australia - Velocity Rewards
24 Jan 2018
Total posts 729
Agreed. VA needs to get a seriously smart CEO with proven performance in a highly regulated environment (such as State-based casino regulators), experience with a revenue analytics team giving DORs by 11:00am the next day fully segmented laterally and horizontally (given the last scheduled daily flight will be that which departed PER at 11:55pm, but say 1:00am), is media savvy and who rides 'with the heads-lights on' illuminating 12+ months out. HINT: That person was not recently appointed CEO of Star Entertainment.
Go on Mr Murphy, tell your headhunters to start earning their fees.
Qantas - Qantas Frequent Flyer
18 Jan 2017
Total posts 26
Allowing Qatar Airways to have extra flights into Australia would undoubtedly lower air fares to Europe as it frees more seats. Try and get a Premium Economy or Business seat on EK to Dubai and Europe in under 3 months booking time. Almost impossible, let alone to dream of an upgrade.
As to buying into Virgin, why not, we live in a free economy without restrictions.
03 May 2024
Total posts 2
Qatar airways owns 15% of LATAM airlines which is skyteam and Qatar uses air New Zealand lounges for customers in Brisbane Syd and Melbourne and Perth preferably over Qantas and there star alliance so like the other big 2 ME airlines alliances don't really matter it's more to do with connectivity for passengers and Australia is a key market for them
Qantas - Qantas Frequent Flyer
10 Jun 2015
Total posts 6
Qatar was unsuccessful coming through the front door, so now they are trying to come into Australia via the back door through Virgin🤔
Qantas - Qantas Frequent Flyer
18 May 2011
Total posts 233
I think you're correct.
If Qatar are not given more slots then what they can do is invest into VA.
VA can take the investment money from Qatar, setup a 100% Australian owned subsidiary called Virgin Australia International using that money and then start flying abroad.
My understanding is the current laws say only Australian owned carriers can fly international flights (except to NZ) but carriers owned by any body can fly domestic flights, hence the need to setup the subsidiary.
If it worked they would more than likely start flying to Doha therefore giving Qatar airways what it wants as a workaround to the limits placed on it by the Transport Minister. Long term they would definitely fly to Japan and the US.
Qantas - Qantas Frequent Flyer
04 Nov 2017
Total posts 332
Virgin already has an international subsidiary called Virgin Australia International, which is used for their flights to Bali, Fiji, Queenstown, Port Vila and Apia (as well as their current Cairns to Tokyo flights until VA finishes up the Tokyo flights end of the NW24/25 season).
Only 51% Australian ownership is required which is currently in use now
15 Feb 2023
Total posts 6
Lets say QR ends up with 20% of VA. Would this then give VA and or QR/VA codeshare J class international pax foot in the doors of the NZ lounges in SYD & BNE?
06 Jun 2017
Total posts 50
QR already use NZ lounges in SYD and BNE. Just MEL they (unfortunataely) use Marhaba.
15 Feb 2023
Total posts 6
Yes, I did allude to QRs use of NZ lounges in SYD and BNE. My point was the that the stock standard J VA international pax does not normally have access to lounge facilities as VA have YET to reintroduce their own dedicated international lounges.
Qantas - Qantas Frequent Flyer
04 Nov 2017
Total posts 332
VA never had their own dedicated International lounges in mainland Australia. They've mostly used contract lounges (No.1/Aspire in SYD/MEL/BNE aka the former Etihad lounges in SYD/MEL).
Virgin Australia - Velocity Rewards
24 Jan 2018
Total posts 729
Quite correct DanV, and having used those lounges on several occasions I can assure fellow readers that the quality of F&B and service (table and bar) was excellent (i.e. faultless). Not once did I walk out thinking something in the service could have been done better. Only the VS 'Clubhouse' lounge at LHR was noticeably better (but I suspect that may be because they live under the supervision of Sir Richard?).
15 Feb 2023
Total posts 6
My bad......the first of only two VA international flights I've had, I did use the Etihad lounge ex SYD back in Feb 2020. VERY nice experience.
03 Mar 2023
Total posts 33
I would love to see Qatar bring Virgin in as a OneWorld Connect partner - that would be absolute gold to see the hissy fit Qantas would put on then!! I'd pay good money to see that :)
20 Nov 2015
Total posts 467
Not going to happen, Qantas would have a veto on this.
Singapore Airlines - KrisFlyer
09 Jun 2016
Total posts 19
Potential for Virgin to fly to Doha? Would help Qatar get around the flight limitations.
20 Nov 2015
Total posts 467
I wonder if part of this investment is conditional on getting more AU-Doha flights plus also Virgin using the money to buy Rex out of administration, scrap the old Saabs, lease nice new E-Jets and turn Rex into a regional arm, just like QantasLink, which can also feed regional travellers onto domestic Virgin and international QR flights?
09 Nov 2018
Total posts 10
Except that the E jets are too big capacity wise, and size wise, to service most of the regional airports. It's 30 seat turbo props for a reason....
Qantas - Qantas Frequent Flyer
04 Nov 2017
Total posts 332
$500million in debt for REX, not too sure if even QR (let alone Bain) are willing to spend the $$ to bail REX out of Voluntary Administration.
Singapore Airlines - KrisFlyer
26 Jul 2012
Total posts 39
Why QF is soo concerned about QR, when SQ has far more access than another foreign airline? QF needs a shake up!
22 Jan 2018
Total posts 101
Hardly shocking, in a decade’s time, I suspect 50% of all aus enterprises will be owned by China and the remaining by Arabs!
Qantas - Qantas Frequent Flyer
20 Aug 2014
Total posts 168
Could they convert Velocity's currency to Avios?
Qantas
19 Apr 2012
Total posts 1425
Finnair seems to be able to work with both Qantas and Qatar. I have an upcoming Finnair flight which codeshares both and Qantas is leasing a couple of Finnair A330s while it waits for it’s own new planes.
06 Oct 2021
Total posts 10
So will we be able to earn QR Avios on VA and then redeem on QF flights operated by EK (or earn QF points on EK and spend on QR/VA)?
Under oneworld's original "seamless" product offering, QF staff at SYD should help sort out problems on fellow member QR flights...do they (and will this incl QR/VA codeshares)?
The whole QF+EK and now QR+VA set up makes a mess of ow to put it mildly. Just noticed that despite both QF and QR being ow members, one cannot even input airport "DOH" on the QF rewards booking search. And looking at QF reward connections over LHR, QF shows Skyteam AF rather than ow BA as the LHR-CDG carrier.
13 May 2020
Total posts 821
told QR are "giving away" seats to the travel industry, as in very cheap, cos they can't sell them to the public. Sign of the times. They'll all be doing it soon.
13 Sep 2019
Total posts 15
It seems very possible that Qatar may not be the only new major investor in in VA if the AU regulators allow this QR investment to proceed.
Jetstar Airways - Qantas Frequent Flyer
14 Jan 2017
Total posts 66
QR preferences virgin for redemption over Qantas. Here is an idea why don’t Qantas actually provide a descent number of redemption seats in business on their own aircraft for their own frequent fliers
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