SYDNEY: Qantas Airways, which has dominated Australian routes and resisted granting access to the Middle Eastern carrier, will face more competition from Qatar Airways, which will purchase a 25% interest in Virgin Australia from US private equity company Bain Capital. Australia’s government must approve the acquisition of the minority interest for an undisclosed sum. Last year, the government turned down demands from Qatar Airways to expand its flights into Sydney, Melbourne, Brisbane, and Perth.
According to a statement from Jayne Hrdlicka, CEO of Virgin Australia, “this partnership brings the missing piece to Virgin Australia’s longer-term strategy.” In a later interview with ABC television on Tuesday, Hrdlicka stated, “It means that we’ve got an important shareholder who has a scale that we don’t have, who has the expertise that we don’t have, and who can help us compete better domestically by giving us access to that scale.” By 5:39 a.m. Saudi time, Qantas’s shares had dropped as much as 4.3 percent, placing it among the worst performers on the benchmark S&P/ASX 200 index.
According to the corporations, the stake sale also acts as a foundational investment in front of Virgin Australia’s projected return to public control. When Virgin Australia went into voluntary administration in 2020, Bain purchased the company for A$3.5 billion ($2.42 billion) including liabilities. Last year, Bain said that it would investigate going public. According to Reuters last year, Bain was aiming for a A$1 billion offering, but the plans were shelved. Regarding the IPO plans, Bain declined to speak further.
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