VIRGIN AUSTRALIA: Qatar ownership stake and international flying on the verge of ACCC approval

Virgin Australia (VA) is on the verge of expanding its wings to Europe, according to the AFR. The Australian Competition and Consumer Commission (ACCC) is poised to approve a strategic aircraft and crew lease between VA and Qatar Airways.

The regulatory nod could come as soon as Wednesday. This will allow Virgin to use Qatar’s planes and crew—through a wet lease arrangement—to launch flights to Doha from major Australian cities like Melbourne, Sydney, Perth, and Brisbane, with services expected to commence by June 30, 2025. That gives the airlines six months to finalise arrangements and market the routes

Qatar Airways Eyes Stake in Virgin – needs ACCC and FIRB approval

If approved Qatar Airways will acquire a 25% stake in Virgin Australia. There is still another hurdle after the ACCC, as the proposal awaits the green light from the Foreign Investment Review Board (FIRB). The partnership, inked in September 2024, indicates Bain Capital, Virgin’s private equity owner, is prepared to sell the stake should regulatory hurdles be cleared.

Qatar Airways and Qantas just don’t get along

This development comes after Qatar Airways was blocked by the Albanese government from operating its own flights on this route, following opposition by Qantas. They argued against Virgin’s lease agreement, claiming it undermines Labor’s “same job, same pay” policy due to the employment of overseas staff. Virgin argues that these jobs wouldn’t exist without the joint arrangement. Virgin Australia would need to add a whole new international fleet and crew to start long haul flying and that’s not economically in Bain’s plan.

Industry Support and Opposition to Virgin Australia deal

Qantas CEO Vanessa Hudson has voiced concerns, labelling the arrangement as overly flexible.She further argues it allows Qatar to bypass Australia’s usual bilateral aviation approval process. Virgin Australia’s pilot union supports the deal, provided it retains a five year limit.

Airports, tourism operators, and other business organisations have also thrown their support behind the plan. They see its potential to boost tourism employment.

2PAXfly Takeout

Despite all sorts of misgivings about Qatar, whether it is their treatment of women, their treatment of LGBEQI+ staff, I do love their service and network. Effectively increasing their access to the Australian market will add much needed competition. And competition should put some downward pressure on airfares.

The Australian market needs a good challenger to Qantas. With the demise of domestic carriers Bonza and REX, the only planes still flying between capital cities besides Qantas, are Virgin Australia.

Long haul international access has been the one large hole in Virgin Australia’s business plan. Qatar taking a 25% stake and wet leasing aircraft and crew to Virgin Australia solves that problem. Without the usual squillions of dollars to acquire aircraft and train crew and recruit pilots, Virgin Australia suddenly has that capacity. If the final piece of the regulatory puzzle falls into place— the approval of the FIRB, then Bob’s your Auntie!