Qatar Airways has experienced a challenging relationship with Australia, especially after its attempt to expand its air presence in the country was blocked.

Qatar Airways is in talks to acquire up to a 20 percent stake in Virgin Australia, currently owned by Bain Capital, according to the Australian Financial Review (AFR).

This comes as airlines vie for greater market share in Australia, currently dominated by the country’s flag carrier Qantas.

Qatar Airways may announce its decision regarding the stake as early as next week, as per the AFR. Both Bain Capital and Qatar Airways have declined to comment on the matter, according to the report.

Bain Capital, a U.S. private equity firm, had previously aimed for a $665m listing of Virgin Australia on the Australian Securities Exchange. However, Reuters reported last year that the plan was postponed.

Qatar Airways has experienced a challenging relationship with Australia, especially after its attempt to expand its air presence in the country by an extra 28 weekly flights last year was blocked by the Labor government.

Australia rejected Qatar’s proposal to increase flights to major cities such as Melbourne, Sydney, Brisbane, and Perth, citing the need to “protect aviation jobs” and to ensure that Qantas’ investment in new aircraft would be profitable.

Virgin Australia said that this decision, opposed by various state governments and tourism groups, served mainly to safeguard Qantas’ market share, particularly on profitable routes to Europe.

At an aviation industry event in Dubai this month, Qatar Airways Chief Executive Badr Mohammed Al Meer disclosed ongoing discussions between Australian and Qatari officials regarding additional flights. He also expressed optimism about reaching a positive resolution within months but refrained from commenting on the airline’s interest in acquiring a stake in Virgin Australia.

Stephen Pearse, the Executive Director of the Board of Airline Representatives Australia which advocates for overseas carriers, stated that less restrictive agreements would be beneficial.

“We hope the government will get back into discussions with Qatar,” he said, pointing out that the domestic aviation industry would gain if a financially robust airline like Qatar Airways took a strategic stake in Virgin.

“Virgin having a solid backing would be clearly helpful for the domestic industry,” he added.