Qatar Airways wins approval for stake in Virgin Australia

Canberra will let Qatar Airways buy a 25 percent stake in troubled airline Virgin Australia, a senior government minister said Thursday, injecting foreign competition into the nation’s Qantas-dominated aviation sector.

Qatar will pay an undisclosed sum to acquire a minority stake in Virgin Australia after the deal was blessed by Australia’s competition watchdog.

“It is expected to strengthen competition in the aviation sector,” Treasurer Jim Chalmers said in a statement.

The airlines, along with Virgin owner Bain Capital, announced the long-rumoured proposal in October last year.

They pledged to run more direct flights from Australia to Doha, stoking competition on expensive long-haul routes long dominated by Qantas.

Qantas — along with its low-cost brand Jetstar — has a more than 61 percent share of the Australian market and boasts strong political clout.

Virgin Australia started bankruptcy proceedings in 2020, laying off hundreds of staff as the Covid-19 outbreak grounded international flights.

US private equity giant Bain Capital came to the airline’s rescue after the Australian government refused to bail out the majority foreign-owned company.

Qatar Airways has been looking to increase its foothold in the Australian market.

In 2023, Qatar launched a bid to put on 21 extra international flights to and from Australia each week.

But the Australian government snubbed that request, citing a 2020 strip search scandal at Doha Airport as a “factor”.

Women were pulled off 10 Qatar Airways flights at Doha Airport and forced to take invasive gynaecological exams after a baby was abandoned in an airport bathroom.

Three Australian women lodged legal action against Qatar Airways following the ordeal, although the case was eventually dismissed.

Qatar Airways chief executive Badr Mohammed Al-Meer said last year 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.” (BSS/AFP)