Qatar Airways is set to buy a minority stake in Virgin Australia.
On Thursday, Treasurer Jim Chalmers announced Australian authorities had approved the sale, which he said would encourage more competition and see more flights to Doha.
Virgin says the move will lower airfares for long-haul flights to the Middle East, Africa, and Europe.
The deal
Qatar Airways and Virgin have negotiated a so-called “alliance” intended to increase the number of flights between Australia and Qatar’s capital, Doha.
Under the deal, Virgin will use Qatar’s crew and aircraft to run 28 additional flights a week from Sydney, Perth, Brisbane, and Melbourne to Doha. Virgin staff will be able to be seconded to work with Qatar Airways.
Qatar will also buy a 25% stake in Virgin, making it a minority shareholder in the airline.
Approval
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The deal required approval from authorities, including the Australian Consumer and Competition Commission (ACCC).
Earlier this month, the ACCC encouraged the deal to go ahead, finding it would lead to “increased choice of international flights” and “public benefits”.
Treasurer Jim Chalmers announced on Thursday the sale could go ahead, citing benefits including “job creation in Australia, support for the tourism industry and enhancing Australia’s position as a key travel hub.”
A final stage of approval at the international level is still pending.
Reaction
Virgin Australia welcomed the approval, saying the long-haul flights tipped to start in June would place “downward pressure on airfares”.
Outgoing CEO Jayne Hrdlicka said: “Being backed by one of the world’s largest airlines now gives us the scale and access to industry expertise which will support continued growth”.
Transport Workers Union boss Michael Kaine, which has many airline staff as members, said it would “ensure opportunities for workers” and welcomed greater commercial stability.
