Qatar Airways Buys 25% Stake In Virgin Australia: Genius & Sneaky

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.

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!