Qatar Airways will buy a 25 per cent stake in Virgin Australia after an agreement was reached between the two airlines. Under the proposed deal, Virgin Australia plans to launch flights from Brisbane, Melbourne, Perth and Sydney to Doha. The deal will need approval from the Foreign Investment Review Board and the Australian Competition and Consumer Commission.
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00:00Virgin is currently owned privately by Bain Capital, they bought the airline when it collapsed
00:09during the pandemic several years ago.
00:12So now Qatar Airways is proposing to buy a 25% stake in Virgin.
00:19If approved, this would mean flights from Brisbane, Melbourne, Perth and Sydney to Doha
00:24that would essentially open up direct Australian flights to a big port that's a portway to
00:32many other international destinations.
00:35Virgin hasn't actually flown long-haul overseas flights for quite some time currently, I believe
00:41it's just Indonesia, Vanuatu and Fiji that it's able to access directly.
00:47So Virgin would be going into Doha via what's called a wet deal, basically that would be
00:52loaning planes in some way off Qatar Airways, that would get it back into longer-haul flights
00:58more easily than if it had to expand itself through quite a long and expensive process.
01:04Obviously for Qatar Airways it also gets that airline more into Australia.
01:10Qatar Airways was actually blocked last year by the federal government from expanding more
01:16flights into Australia.
01:17It wanted to add 21 extra flights per week to Sydney, Melbourne and Brisbane in addition
01:23to the 28 weekly flights that it currently offers.
01:27When that deal was denied last year it was actually quite controversial, in fact two
01:33former bosses of the ACCC, the Consumer Watchdog, came out and said that they thought that rejection
01:38of that deal was anti-competitive for Australians.
01:42So as the Treasurer has noted this morning, this deal is essentially needing to be reviewed
01:48by the Foreign Investment Review Board and that is because it would involve Qatar Airways
01:54being involved in an Australian-owned company.
01:57Qatar Airways is actually owned by that country itself.
02:01It is worth noting that Virgin Airways has previously been owned or had stakes in it
02:08from airlines from other countries including two airlines from China, Singapore Airlines
02:13and Etihad.
02:15So there is a history of this airline having overseas backers in it.
02:21As the Treasurer has noted the Foreign Investment Review Board will need to make a decision
02:26and then ultimately the veto power comes down to him himself.
02:31The ACCC is also reportedly involved in this deal.
02:35The Treasurer says they haven't actually, the ACCC hasn't yet actually received a formal
02:41notice from Virgin and Qatar about this decision.