Sydney — Qatar Airways unveiled a bid to take a 25 percent stake in troubled airline Virgin Australia on Tuesday, a deal that could shake up Australia’s Qantas-dominated market.
The airlines, along with Virgin owner Bain Capital, announced details of the proposed agreement, which had long been rumored, before markets opened in Sydney.
Under the plan, Qatar would take a minority stake in Virgin for an undisclosed sum.
The firms said it would spell more direct flights from Brisbane, Melbourne, Perth, and Sydney to Doha, which would better link Australia with Europe and elsewhere.
That could significantly shake up Australia’s air travel market which is currently dominated by Qantas, a pseudo-flag carrier beset by allegations of price gouging and deliberate overbooking.
“This will ensure Australian consumers have access to even better value airfares and greater choice,” the companies said in a joint statement.
The deal could also pave the way for Virgin to relist on the stock market. However, it will be subject to regulatory approval and fierce political debate.
Qantas has previously helped scupper plans for Qatar to provide more flights from Australia.
Qantas — along with its low-cost brand Jetstar — has a more than 61 percent share of the domestic air market and has strong political clout.
In 2023, Australia’s center-left government rejected Qatar’s bid to put on 21 extra international flights to and from Australia.
Political opponents accused the government of trying to shield Australian carrier Qantas from competition despite its record profits, resulting in high fares for international flights.
Qatar Airways CEO Badr Mohammed Al-Meer said the proposed Qatar-Virgin tie-up would be good for Australians.
“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.”