Speculation continues to swirl that Qatar Airways will buy into Virgin Australia.
It’s a scenario that has been indulged ever since the airline was rescued and rebooted in 2020 under the private ownership of Bain Capital, but has gained new altitude in recent months.
Now a report in the typically well-sourced Australian Financial Review says Qatar Airways “is negotiating to take as much as a 20% stake in Virgin Australia.”
“Two sources close to the transaction, who spoke on condition of anonymity citing the sensitive nature of discussions, said Virgin’s advisers had also considered selling a stake to Singapore Airlines,” the AFR notes, adding that “Qatar’s interest in a stake in Virgin could be announced as early as next week.”
Qatar Airways is no stranger to this strategy: the Gulf carrier already holds a 10% stake in Cathay Pacific plus 20% in IAG, the parent of British Airways, Iberia and Aer Lingus, among others.
And as the paper points out, any such deal would need to be approved by Australia’s Foreign Investment Review Board, “and the transaction could ultimately be blocked by the government.”
But should Qatar Airways’ proposal to buy into Virgin Australia clear those hurdles, it will result in a seismic shake-up in the country’s aviation industry.
So what could this mean to travellers?
As previously reported, Qatar Airways has already applied for an additional 28 flights per week from its Doha hub into Sydney, Melbourne, Brisbane and Perth.
This would mean a double-daily service for Sydney, Brisbane and Perth, with three flights per day for Melbourne.
Any significant investment in Virgin Australia would obviously add weight to the argument to add those flights, and perhaps even more.
The partnership between Virgin Australia and Qatar Airways might even be burnished to add benefits beyond the current earning of Velocity Points and status credits, alongside perks for Velocity members such as access to Qatar’s frequent flyer lounges in Doha.
Qantas & Qatar Airways
Meanwhile, the already frosty relationship between Qantas and Qatar Airways would descend by several degrees.
Despite both being members of the Oneworld alliance, there’s been little love lost since Qantas lobbied against Qatar’s expansion into Australia.
Oneworld is admittedly a broad church. While Qantas and American Airlines are close collaborators, Qantas and Cathay Pacific might be better described as ‘frenemies’.
There are also bespoke partnerships with airlines outside of Oneworld, and often with members of competing alliances, such as Qantas working with Air New Zealand (from Star Alliance) on domestic flights and Shanghai-based China Eastern (from SkyTeam).
Qatar Airways is already preferencing Virgin Australia Velocity members for the release of points-based award seats – especially for its highly-regarded business class Qsuite – while reportedly throttling their availability to Qantas frequent flyers and leaving Qantas only with poor-value economy redemptions.
Executive Traveller readers: what are your expectations for how this will all play out across the coming weeks and months?