Qatar Airways will establish good footing in the Australian aviation market, shaking up Qantas’ domination in the scene.

Qatar Airways (QA) has announced that it will soon purchase a 25 percent equity stake in Virgin Australia (VA), a move that could potentially reshape Australia’s domestic airline industry.

“A deeper strategic relationship between Virgin Australia and Qatar Airways will drive increased competition in Australian aviation,” the two airlines said in a joint statement. “This will ensure Australian consumers have access to even better value airfares and greater choice.”

The sale will be subject to approval from Australia’s Foreign Investment Review Board.

QA, which has been voted by Skytrax as the world’s best airline for the eighth time this year, will seek to obtain minority stake from Virgin’s American private equity owner, Bain Capital.

“We are really pleased to be announcing our proposed strategic investment in Virgin Australia today,” Badr Mohammed Al-Meer, CEO of Qatar Airways Group said in a statement.

“The alignment of our two airlines is significant, the relationships are deep, and we could not be more proud to bring even more great value and choice to all Australians.”

Al-Meer emphasised that the investment underscores Qatar Airways’ strategic partnership with Virgin Australia and their shared commitment to providing the highest quality service and value to Australian travelers.

“Not only that, we believe competition in aviation is a good thing and it helps raise the bar, ultimately benefiting customers,” he added. “This agreement will also help support Australian jobs, businesses and the wider economy.”

Bain Capital, who will still be the Australian airline’s major shareholder, bought VA for $2.45bn after it fell into voluntary administration in April 2020.

More than 100 worldwide destinations

Under the newest wet leasing arrangement, VA will be able to operate international flights on Qatar’s twin-aisle aircrafts starting mid 2025.

This means VA will soon launch flights from Brisbane, Melbourne, Perth and Sydney to Doha, linking these cities to Qatar Airways’ extensive global network. This expansion will provide Australian travelers with access to over 100 destinations across Europe, the Middle East, and Africa.

A wet lease refers to an agreement where one airline, the lessor, supplies an aircraft – along with its crew, maintenance services, and insurance – to another airline or a business brokering air travel, known as the lessee.

The lessee compensates the lessor based on the number of operational hours.

“Domestic competition in Australia is dependent on Virgin Australia thriving through the inevitable ups and downs of aviation. Qatar Airways Group’s strategic investment will provide access to the critical scale and expertise of a world leading global airline,” the joint statement added.

Qatar Airways expands routes and introduces new features

Qatar’s bid to increase its national airline’s flights in major Australian cities such as Melbourne, Sydney, Brisbane, and Perth was blocked last year by Labor, citing “national interests” as the reason. Qatar Airways had sought for an additional 28 weekly flights.

The stake sale could create an in for Qatar to move forward with its previous bid for more Australian flights.