Virgin Australia in it for the long haul as Qatar Airways takes 25pc stake

October 1

Virgin Australia plans to return to long-distance international flying as part of a deal for Qatar Airways to take a 25 per cent stake in the revived carrier.

Just 15 months after the Federal Government controversially rejected Qatar’s application for more flights into Australia, the Doha-based airline will provide the long-haul jets needed for Virgin crews to fly to and from the Qatari capital.

Virgin said it planned to begin flying from Perth, Sydney, Melbourne and Brisbane to Doha’s renowned Hamad International Airport in mid-2025.

Building on a code share deal that has been in place for two years, Virgin boast the planned new flights would link seamlessly to Qatar services to Europe, Asia, Africa, the Middle East and the Americas.

The deal is subject to a review by the Australian Competition and Consumer Commission and the Foreign Investment Review Board — and ultimately to winning support from the Federal Government.

Treasurer Jim Chalmers was playing his cards close to his chest on Tuesday, saying he would wait for the FIRB to do its “diligent work”.

“We do want the airline sector to be stronger and more competitive,” Dr Chalmers said. “My job — and the Foreign Investment Review Board’s job — is to determine the national interest and make decisions consistent with it.”

The heavily indebted first incarnation of Virgin crashed in the coronavirus shutdowns of 2020.

After being resuscitated by private equity group Bain Capital, Virgin began pitching itself as a discount carrier — arguably more in competition with Jetstar than the budget airline’s full-service Qantas sibling.

Virgin Australia chief executive Jayne Hrdlicka was pushing the competition line on Tuesday, saying the new proposed new deal with Qatar would provide access to “their scale, their wisdom, their network”.

“Virgin Australia now has the opportunity to better compete domestically and provide our best with the world’s best in terms of international productivity,” she said on morning television.

“It enables us to do things we can’t do today.”

Details of the proposed new lease deal between Virgin and Qatar were not disclosed on Tuesday.

The Australian airline refused to discuss details of its planned flights to and from Doha, including whether it could replace some of the award-winning Qatar services linking Australian capitals to the Persian Gulf hub.

Virgin Australia’s leases on long-distance, wide body jets were renounced as part of its 2020 administration. Qatar reportedly now uses three of those Boeing 777s on its Asian and African services — complete with the original Virgin fit-out.

And stakes held by Singapore Airlines, Etihad Airways and Air New Zealand were shredded in the restructure. Virgin Group, which owns Virgin Atlantic, retains a 5 per cent stake in Australian airline.

Ms Hrdlicka said the Qatar arrangement would be “fundamentally different” to the pre-administration where we “had four investors who were all competitors”.

“We didn’t have one party who was really deeply connected to helping us be successful in our Australian market, as well as us being able to support them and their ambitions,” she said.

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