Qatar Airways Group Announces Intention To Acquire 25% Minority Stake in Virgin Australia

  • Represents a significant vote of confidence in Virgin Australia and Australian aviation
  • Cements a deeper strategic partnership that will strengthen competition in Australia’s skies, creating more choice and better value for Australians.
  • Provides access to scale and synergy benefits, further strengthening Virgin Australia’s financial resilience and underpinning the company’s continued strategic growth.
  • Enables a measured entry into long-haul international flying by mid-2025, with significant flow on benefits for Australian travellers and the Australian economy.
  • Delivers additional consumer benefits, including increased earn and redemption opportunities between Velocity and Qatar Airways’ Privilege Club, as well as expanded code sharing arrangements and improved schedule and connectivity options.
  • Unlocks the potential for new areas of cooperation, including on sustainability initiatives and western Sydney’s aviation ecosystem.

1 October 2024: The existing partnership between Virgin Australia and Qatar Airways will be strengthened with today’s announcement that Qatar Airways Group intends to acquire a minority 25% equity stake in Virgin Australia from Bain Capital (subject to FIRB approval). Qatar Airways is one of the world’s largest airlines and earlier this year was awarded the world’s best airline by Skytrax for the eighth time.

A deeper strategic relationship between Virgin Australia and Qatar Airways will drive increased competition in Australian aviation. This will ensure Australian consumers have access to even better value airfares and greater choice. Domestic competition in Australia is dependent on Virgin Australia thriving through the inevitable ups and downs of aviation. Qatar Airways Group’s strategic investment will provide access to the critical scale and expertise of a world leading global airline. The minority stake also serves as a cornerstone investment ahead of an anticipated return of Virgin Australia into public ownership and the opportunity that would provide for Australians to share in Virgin Australia’s future.

The equity investment by Qatar Airways Group will unlock new areas of cooperation with Virgin Australia, all of which will help to drive additional consumer and economic benefits. Subject to ACCC authorisation this cooperation will enable Virgin Australia to launch flights from Brisbane, Melbourne, Perth and Sydney to Doha, connecting seamlessly into Qatar Airways’ global network. These extra flights will open up more than 100 new connecting itineraries across Europe, the Middle East and Africa for Australian travellers. The proposed wet lease services will begin in mid-2025, allowing Virgin Australia 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.

The expanded codeshare and collaboration arrangement will provide access to a greater range of international destinations with improved schedules and frequencies, increased earn and redemption opportunities for members of Velocity and Qatar Airways’ Privilege Club, and broader access to great value fares for leisure travellers, small and medium-sized enterprises, and corporate customers.

The deepened partnership has the potential to underpin significant jobs and economic growth, not just in Virgin Australia but across both the broader aviation and tourism sectors in Australia. An important area of future focus is sustainability, including the development of Sustainable Aviation Fuel. The partnership also comes at a great time to explore opportunities as the new Western Sydney Airport and its economic ecosystem are developed.

Commentary from Virgin Australia Group CEO Jayne Hrdlicka: 

This partnership brings the missing piece to Virgin Australia’s longer-term strategy and is a huge vote of confidence in Australian aviation. Importantly, it will further strengthen Virgin Australia’s ability to compete over the long term, which will inevitably translate into more choice and even better value airfares for consumers as well as additional Australian aviation jobs,” Ms Hrdlicka said.

Qatar Airways has been a valued codeshare partner of Virgin Australia since 2022. This investment by the world’s best airline will deepen an already strong partnership by bringing critical scale and the best industry expertise to support our long-term competitiveness and growth.

“This proposed investment is subject to regulatory approval. We do not take this for granted and have made submissions outlining the benefits of the transaction for Australian aviation, Australian travellers and the Australian economy.”

Reflecting on the new proposed long-haul services between Australia and Doha, Ms Hrdlicka noted that they were estimated to generate an economic benefit of ~A$3bn to the Australian economy through incremental visitor flows over the next five years. Additional benefits will flow from increased freight capacity, supporting Australia’s high-value exports to markets such as the Middle East and Europe.

I am delighted that our closer relationship allows us to put our ‘toe in the water’ regarding long-haul international, as well as the ability to deepen other areas of existing cooperation, including between our respective loyalty programs and code sharing arrangements,” she said.

Ms Hrdlicka noted that she was particularly excited by the potential to expand the two airlines’ relationship into new areas such as sustainability and development of the western Sydney aviation ecosystem, including broader jobs and training opportunities.

Sustainable Aviation Fuel will play a critical role in aviation’s long-term decarbonisation effort. Virgin Australia has been an active participant in the Federal Government’s Jet Zero Council, and we expect our partnership with Qatar Airways to support SAF opportunities in a manner consistent with the Federal Government’s Future Made in Australia agenda,” she said.

Both airlines are thrilled by the opportunity to work together more closely, which will bring significant benefits to Australian travellers and the economy.

“I am super proud of the entire team at Virgin Australia. Together they have done a wonderful job getting Virgin Australia back into a healthy, long term competitive position that has attracted the world’s best airline as a prospective investor. Every member of our team has contributed to this terrific outcome,” Ms Hrdlicka said.

Commentary from Qatar Airways Group CEO Eng. Badr Mohammed Al-Meer: 

We are really pleased to be announcing our proposed strategic investment in Virgin Australia today. The alignment of our two airlines is significant, the relationships are deep, and we could not be more proud to bring even more great value and choice to all Australians. The investment further demonstrates our strategic alignment with Virgin Australia and our collective ambition to deliver the best possible service and value to Australian passengers,” he said.

Not only that, we believe competition in aviation is a good thing and it helps raise the bar, ultimately benefiting customers. This agreement will also help support Australian jobs, businesses and the wider economy.

Commentary from Bain Capital Partner Mike Murphy: 

Virgin Australia plays a pivotal role in connecting Australians with each other, and with the world. Over the past four years, we’ve had the privilege of working alongside a team that has shown the dedication and tenacity needed to revitalise the airline. After a decade of losses resulting in administration, Virgin Australia has emerged as a strong and profitable company with an attractive market position, a loyal customer base, and a promising growth trajectory,” he said.

We are pleased to welcome Qatar Airways Group as a partner at this stage to build on Virgin Australia’s strong foundation.

Source: Virgin Australia

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Kenyan Airline Introduces the First ATR-500 Aircraft in the Country in 2024

Nairobi, Kenya – Kenyan operator Renegade Air, leading turboprop lessor Abelo and world’s number one regional aircraft manufacturer ATR, celebrated the introduction of the first ever ATR -500 aircraft in Kenya, during a ceremony held on September 25, 2024 at Wilson airport. This milestone marks a significant advancement in the partners’ capabilities to serve the growing demand for efficient and reliable air services in the region. The ATR -500, leased from Abelo, has been converted into a cargo configuration to meet the specific needs of Renegade Air’s operations.

With its proven track record for performance and reliability, capacity to operate in hot and high environments, from unpaved runways, and to access the most remote airfields, this ATR aircraft is set to enhance Renegade Air’s capacity to transport goods swiftly across domestic and regional routes, supporting various industries such as e-commerce, pharmaceuticals, and perishables.

The largest market for turboprops in Africa, with over 80 aircraft of the type currently flying, Kenya could accommodate many additional ATR -500 and latest generation -600 series aircraft, from both Wilson Airport and JKIA International Airport, to serve regular domestic and international routes.

Tasneem Kaderbhai, Commercial Manager for Renegade Air Limited, said: “Our new ATR -500 cargo aircraft will be a game-changer in our fleet, bolstering our ability to provide timely and efficient air cargo services to our customers. This strategic addition underscores our commitment to meeting the evolving needs of the market, supported by two ideal partners: Abelo and ATR. This move further solidifies our position as a key player in the air cargo industry in Kenya.”

Mathieu Duquesnoy, Abelo’s Chief Marketing Officer, stated: “We are thrilled to partner with Renegade Air in bringing the first ATR -500 aircraft to Kenya. This collaboration highlights our commitment to providing tailored leasing solutions to airlines seeking to enhance their capabilities. The conversion of this ATR aircraft into a dedicated cargo platform is a testament to its versatility, adaptability across different operational requirements, and long-term value as an asset.”

Michael Chassot, Sales Director EMEA at ATR, added: “Renegade Air’s selection of the ATR -500 marks both the continuation of a successful partnership with Abelo and ATR’s comeback to Kenya – a market ATR has strong ambitions for. ATR aircraft are the ideal candidates to replace ageing fleets, bringing comfort, convenience and affordable connectivity to the Kenyan communities with state-of-the-art, ultra-efficient, low operating cost and versatile aircraft.”

Source: ATR Aircraft
Photo Credit: ATR Aircraft

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Airbus Forecasts Asia-Pacific to Require 19,500 New Aircraft as Services Market More Than Doubles by 2043

The commercial aircraft services market in the Asia-Pacific region will more than double in value to US$129 billion from US$52 billion today, by 2043 according to Airbus’ latest Global Services Forecast (GSF).

This is driven by a demand for some 19,500 new aircraft for the region, supported by a compound annual growth rate (CAGR) of 4.81% in passenger air traffic in the region.

Driven by the rise in annual air traffic, fleet growth and the requirement for more digitally-enabled and connected aircraft, the growth in demand for services will be reflected in solutions implemented across all phases of the aircraft from delivery to end-of-life, including fleet maintenance, aircraft modernisation and training.

Among the various segments of the services business in Asia and the Pacific, the Maintenance market will  more than double from US$43 billion to US$109 billion (+5.0% CAGR). The Enhancements and Modernisation sector is projected to grow similarly, from US$5.1 billion to US$13 billion (+5.1% CAGR), while Training and Operations is expected to rise from US$4.1 billion in 2024 to US$7.6 billion in 2043 (+3.3% CAGR).

Airbus anticipates a need for 999,000 new skilled professionals in the region (nearly 45% of global manpower) over the next 20 years, comprising 268,000 new pilots, 298,000 new technicians and 433,000 new cabin crew members.

The Asia-Pacific region will see the largest volume of growth and activity in terms of aftermarket services, with many opportunities for additional efficiency, simplification and responsible operations. Airbus will continue to play an important role in supporting airlines and the aviation industry at large in responding to those opportunities,” said Cristina Aguilar Grieder, Airbus Senior Vice President Customer Services.

Source: Airbus
Photo Credit: Airbus

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