Negotiations between two firms may still take some time to finalize or could break down.
Qatar Airways is currently in talks to acquire approximately 20 percent of Virgin Australia Airlines Pty, according to sources familiar with the matter. This potential deal would give the Gulf carrier access to a market where its expansion plans were hindered by the government last year.
Discussions between Qatar Airways and Virgin Australia’s owner, Bain Capital, may still require more time to finalize and could potentially fall through, said one of the sources, who wished to remain anonymous due to the private nature of the talks. Any investment by Qatar Airways would need Australian government approval.
Last year, Bain postponed plans for an initial public offering of Virgin Australia and announced that CEO Jayne Hrdlicka would step down once a replacement is found.
In 2023, Qatar Airways’ request to operate more routes to Australia was rejected, a decision the airline deemed unfair, citing its efforts to repatriate Australian citizens during the pandemic. Regional competitor Turkish Airlines made its Australian debut this year via Singapore, while Emirates has also increased its operations to the continent, underscoring the demand for long-haul services from the Middle East.
The Australian Financial Review, which initially reported the talks, indicated that Qatar Airways‘ interest could be announced as early as next week.
Australia’s air travel market is dominated by Qantas Airways Ltd. Virgin Australia collapsed in the early weeks of the Covid pandemic in 2020 due to heavy debt, resulting in the loss of investments from shareholders like Singapore Airlines Ltd. and Etihad Airways. Later that year, Bain Capital acquired the bankrupt carrier in a A$3.5 billion ($2.3 billion) rescue deal.
Doha-based Qatar Airways is the largest shareholder of British Airways owner IAG SA and holds around 10 percent of both Hong Kong-based Cathay Pacific Airways Ltd. and Latam Airlines Group SA.
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