Qatar Airways (QR, Doha Hamad International) is close to finalising a stake of up to 20% in Virgin Australia (VA, Brisbane International), according to the Australian Financial Review (AFR). It comes as reports surface that Virgin Australia's much delayed IPO may be on again and held before the end of the year. ch-aviation recently reported on comments by Qatar Airways CEO Badr Mohammed Al Meer, who said his airline would be interested in participating in any such offering.
The AFR suggests an announcement could be made as early as next week. The stake would be subject to approval from Australia's Foreign Investment Review Board and also the Australian government, who last year curbed Qatar's enthusiasm for further expansion in Australia.
Virgin Australia is primarily a domestic operator within Australia. Its fleet of 94 narrowbody aircraft service airports around the country as well as short haul international hops to New Zealand, Indonesia, and the South Pacific Islands, in addition to a single longer haul flight between Cairns and Tokyo Haneda.
In April 2020, Virgin Australia filed for voluntary administration, a victim of Covid-19, high debts, and a misguided operating strategy. Later in the year, the airline was acquired by Bain Capital and has since returned to profitability. There have been plans for an IPO for around two years. However, for various reasons, it has not occurred.
Towards the end of the pre-administration period, assorted high profile foreign entities held double digit stakes in Virgin Australia, including Singapore Airlines, HNA Group, Etihad Airways, China's Nanshan Group, and Richard Branson's Virgin Group. All lost their investments. Post administration, the ownership structure was (and remains) Bain Capital (93%), Virgin Group (5%), and the Queensland Investment Corporation (2%). Bain has previously said that in the event of any IPO, it would retain a significant stake in the airline. The AFR suggests talks had recently been held with Singapore Airlines about that airline retaking a stake. However, they say these discussions have ended without any agreement.
Qatar Airways already enjoys a close working relationship with Virgin Australia, codesharing on many flights. In many cases, it preferences Virgin Australia passengers over those of Qantas, even though Qatar and Qantas are both Oneworld members.
Qatar Airways has a controversial recent history in Australia. While it was applauded for continuing flights to the country during the pandemic, it suffered significant PR backlash for its role in the strip searching of female passengers, including Australians, during an incident in Doha in October 2020. While never publicly acknowledged, that incident is believed to have played a role in the Australian government's decision not to grant Qatar additional access to Australia's biggest airports last year. Qantas also lobbied against that happening. Qatar has since reapplied for the extra rights, with the Qantas Group CEO recently telling journalists the airline had not been asked for input on the decision, and had not offered any.
