Qatar Airways seeking 25 pct stake in Virgin Australia

SYDNEY

Qatar Airways unveiled a bid to take a 25 percent stake in troubled airline Virgin Australia on Tuesday, a deal that could shake up Australia's Qantas-dominated market.

The airlines, along with Virgin owner Bain Capital, announced details of the long-rumoured agreement before markets opened in Sydney.

Under the plan, Qatar would take a minority stake in Virgin for an undisclosed sum.

The firms said it would spell more direct flights from Brisbane, Melbourne, Perth, and Sydney to Doha, which would better link Australia with Europe and elsewhere.

That could significantly rebalance Australia's air travel market, which is currently dominated by Qantas, a pseudo-flag carrier beset by allegations of price gouging and deliberate overbooking.

"This will ensure Australian consumers have access to even better value airfares and greater choice," the companies said in a joint statement.

The deal could also pave the way for Virgin to relist on the stock market.

However, it will be subject to regulatory approval and fierce political debate.

Virgin Australia started bankruptcy proceedings at its financial nadir in 2020, laying off hundreds of staff as the COVID-19 outbreak wrought havoc on international travel.

U.S. private equity giant Bain Capital came to the airline's rescue later that year after the Australian government refused to bail out the majority foreign-owned company.

Qantas would have assumed a virtual monopoly over many Australian routes if its competitor went under.

Qatar Airways has been looking for ways to increase its foothold in the Australian market.

Rival Qantas has a more than 61 percent share of the domestic air market and strong political clout.