Virgin Australia has announced that its existing partnership with Qatar Airways will be “strengthened” as Qatar Airways Group moves to acquire a 25 per cent stake in the Australian airline.
The background: Virgin Australia has faced significant challenges this year, with its outgoing CEO Jayne Hrdlicka describing the second half of the financial year as “super tough” in September.
Hrdlicka took over as CEO in November 2020 after the United States private equity firm Bain Capital rescued Virgin from administration and chartered it through the global COVID-19 pandemic.
Tuesday’s announcement comes a year after the Albanese government came under fire for knocking back .
The decision was scrutinised after it was revealed that Qantas lobbied the government against allowing the extra flights.
The key quote: “This partnership brings the missing piece to Virgin Australia’s longer-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 speculation Qatar Airways was seeking a stake in the airline, saying “some creative fiction” had been written.
What happens next: Virgin has flagged that, subject to regulatory approvals, it could soon fly to Doha from Sydney, Melbourne, Brisbane and Perth under a ‘wet lease’ with Qatar.
A wet lease involves one airline providing aircraft, complete crew, maintenance and insurance to another airline.
Hrdlicka said the new long-haul services between Australia and Doha were estimated to generate a benefit of around $3 billion to the Australian economy through visitor flows.