Qatar Airways may buy Virgin Australia in full - what are the consequences?

[RSVKanga]

It’s increasingly being mentioned online in the news and other sources that QR is considering buying a 51%> or even a full stake in Virgin Australia.

It should be prompting the Australian Government to push against this by considering minimum local-ownership laws for domestic airlines, similar to what exists in the US, UK, Canada, New Zealand, Singapore, Japan and most EU countries. Qantas, the Australian Government, as well as ordinary Australians who show a decent level of appreciation for our country, will be alarmed. On the other hand, I expect that the State of Qatar, Qantas-bashing online warriors, Joe Aston, Bridget McKenzie, John Sharp and certain members of this forum will be excited.

But assuming that QR pushes/bribes/lobbies/bullies their way through these hurdles and this acquisition successfully passes all approvals, what are the consequences of this?

Will QR eventually overtake QF as the overall dominant domestic/international airline in Australia after they acquire VA?

Will QR seek to bully QF out of OW, terminate VA’s partnerships with non-OW airlines (like UA) and make VA partners with AA, JAL, CX etc before eventually admitting VA into OW?

Will Velocity remain? Or will it be dissolved into Avios

Will the VA brand even remain? Virgin Atlantic is a SkyTeam member and it would be awkward for VA to retain the Virgin brand, being owned by a OW member, so a rebrand into a name of QR’s choice might be appropriate

Will the Australian Government seek to buy the national carrier?

 

[yachty]

It’s increasingly being mentioned online in the news and other sources that QR is considering buying a 51%> or even a full stake in Virgin Australia.

A quick Google doesn't bring anything up, do you have a link you can share for those of us who aren't across it?

 

[RSVKanga]

A quick Google doesn't bring anything up, do you have a link you can share for those of us who aren't across it?

Just one of the mainstream articles

https://www.theaustralian.com.au/business/aviation/qatar-airways-boss-reveals-plans-for-growth-down-under-as-it-prepares-to-beefup-its-fleet/news-story/8ef18cc3850589b6dbb5756b698e8230?amp&nk=76b87f952e8ef1390ab07475f3f0107a-1712818676

The planned growth in Australia was likely to fuel speculation Qatar Airways may be interested in buying Virgin Australia from US private equity owners Bain Capital. Qatar Airways' plan to grow its market in Australia has only fuelled speculation it may be considering buying partner Virgin Australia.

 

[Daver6]

Isn't VA currently 100% owned for a foreign entity, being Bain Capital? Can't really see how you can argue that foreign ownership of a domestic airline is suddenly an issue. Perhaps I'm mistaken about who currently owns VA and where the owners are based.

Could be a good thing if QR were to purchase VA. I'd imagine they'd lift their game and drag QF up as well.

 

[SeatBackForward]

My hot take - QR is going to be the first of the big Middle Eastern Gov't subsidised airlines to keel over. This could be the start of their dying star moment - splash the cash and go all out in a bid to survive.

 

[RSVKanga]

My hot take - QR is going to be the first of the big Middle Eastern Gov't subsidised airlines to keel over. This could be the start of their dying star moment - splash the cash and go all out in a bid to survive.

Please do elaborate. I struggle to understand how middle eastern airlines are suddenly suffering.

 

[SeatBackForward]

Please do elaborate. I struggle to understand how middle eastern airlines are suddenly suffering.

Qatar went all out in attaining the world cup, throughout the entire region their pivoting away from oil economies splurging out on all manner of extravagance, 100km long glassed cities for example. It can't be sustainable (putting aside the absurdity of it all) if they're all doing it.

 

[Scr77]

This thread will make for a nice change to the regular “Singapore airlines could buy Virgin Australia” or “ Etihad could buy Virgin Australia”. Or the “Could Virgin join Star Alliance”?

 

[jase05]

My hot take - QR is going to be the first of the big Middle Eastern Gov't subsidised airlines to keel over. This could be the start of their dying star moment - splash the cash and go all out in a bid to survive.

Can’t see them falling over. Im currently in Doha and have seen a couple of TV interviews where QR has suggested they are expanding and have some exciting announcements coming up.
Even though they bumped me at check in the other day I’ve still had mostly great experiences with QR and would be happy if they took over VA and moved them into the Avios stable

 

[Brizz]

Yeah - on face value QR buying Virgin seems a win to me.

I'd be happy with a 1 to 1 swap with Avios and earlier access to QR flights

 

[andye]

Speculated a while ago on AFF (and by someone with some knowledge of the industry)

Post in thread 'Qantas Block Partner Earn on Competitor Routes' Qantas Block Partner Earn on Competitor Routes

 

[Steven of Mysore]

So many hypothesis surrounded by speculation with an overlay of inaccuracy. My favourite was the Australian Government buying an airline - now that was very funny.

 

[dajop]

One question I have around this particular thread is around rebranding. I'm not talking about airlines but instead speculative, potentially controversial posts.

 

[ben95]

Qantas, the Australian Government, as well as ordinary Australians who show a decent level of appreciation for our country, will be alarmed

Are you alarmed because Qatar might buy VA or alarmed because foreigners own airlines that operate domestically?

If it’s the latter Rex and VA has been majority foreign owned for many many years and so is Bonza. Why is that suddenly an issue? I’d argue if foreign entities are interested in investing in Australian aviation that’s great for the industry and consumer.

Would you be so alarmed if UA or SQ were to buy VA? Or if Richard Branson wanted another go at VA? I’d bet you’d let those slide.

 

[RooFlyer]

A quick Google doesn't bring anything up, do you have a link you can share for those of us who aren't across it?

A search on AFF would be most useful. Been talked about and tipped many times. Topic is not new.

Are you alarmed because Qatar might buy VA or alarmed because foreigners own airlines that operate domestically?

Search the OP and 'Qatar' and I think you'll see the cause of 'alarm'

 

[justinbrett]

It will never happen - no chance of passing the foreign investment review board.

A minor player sure, but no single foreign government is going to be allowed to control a domestic airline unilaterally.

 

[HS-TQE]

This thread will make for a nice change to the regular “Singapore airlines could buy Virgin Australia” or “ Etihad could buy Virgin Australia”. Or the “Could Virgin join Star Alliance”?

It's usually the "Will VA join Star Alliance" followed by the ol "SQ will TAEK OVAH VA !!!111!1!!!111".. "FOR REAL TIHS TIEM !!!!11" back in the pre-Administration and briefly post-Admin eras.

Saying that, on a tad serious opinion, can't see QR buying VA in full, cornerstone investor at 20% (per current regulations) maybe and doing the 2% creep from there over a long period of time.

 

[HS-TQE]

Would you be so alarmed if UA or SQ were to buy VA? Or if Richard Branson wanted another go at VA? I’d bet you’d let those slide.

Whilst UA buying VA would be an interesting scenario, can't see UA past a minor stake at best.

Darkhorse could be DL pulling off a LATAM (i.e taking them away from AA) in Australia to get 'VA back' (from UA) , but I don't see that happening either. DL are largely only expanding in Australia through taxpayer funds (i.e Queensland's AAIF).

 

[RSVKanga]

A minor player sure, but no single foreign government is going to be allowed to control a domestic airline unilaterally.

It’s happened before. The Government of New Zealand unilaterally controlled Ansett Australia (through AirNZ) in its final couple of years. I’m not sure how much the foreign investment approval process has changed since then though.

 

[CorporateFlyerMEL]

it is only Qantas that there is a foreign ownership restriction (49%) which is in the Act that privatised it. Any other airline seeking to change ownership would be subject to FIRB (if foreign) and possibly ACCC review