Virgin Australia has announced that its existing partnership with Qatar Airways will be “strengthened” as Qatar Airways Group plans to acquire a 25 per cent stake in the Australian airline.
The context: Virgin Australia has faced significant challenges this year, with its outgoing CEO Jayne Hrdlicka calling the second half of the financial year “super tough” in September.
Hrdlicka took over as CEO in November 2020 after US private equity firm Bain Capital rescued Virgin from administration and chartered it during the global COVID-19 pandemic.
Tuesday’s announcement comes a year after the Albanian government was criticized for pushing back .
The decision came under scrutiny after it was revealed Qantas had pressured the government not to allow the extra flights.
The key quote: “This partnership provides the missing piece to Virgin Australia’s long-term strategy and is a huge vote of confidence in Australian aviation.” —Jayne Hrdlicka, CEO, Virgin Australia.
What else to know: In September, Hrdlicka played down rumors that Qatar Airways was looking to take a stake in the airline, saying “creative fiction” had been written.
What happens next: Virgin has signaled that, subject to regulatory approvals, it could soon serve Doha from Sydney, Melbourne, Brisbane and Perth under a “wet lease” with Qatar.
A wet lease involves one airline providing aircraft, a full crew, maintenance and insurance to another airline.
Hrdlicka said the new long-haul services between Australia and Doha were expected to generate a benefit of around $3 billion for the Australian economy from visitor flows.
