Australia’s aviation industry, Qantas Airways has clarified that it holds no opposition to Qatar Airways’ proposal to acquire a 25% stake in Virgin Australia, the country’s second-largest airline. The announcement, made by Qantas Chair John Mullen and CEO Vanessa Hudson at the company’s annual general meeting on Friday, comes as the proposed investment continues to face regulatory scrutiny from the Australian government. This stance reflects Qantas’ confidence in its own investment strategy and its ability to maintain a competitive edge in the evolving aviation landscape.
The Qatari investment bid, which still requires approval from the Australian federal government, would mark a substantial shift in ownership structure for Virgin Australia, bringing in one of the world’s most prominent Gulf carriers as a minority stakeholder. However, the investment is not without controversy, as labor unions and industry stakeholders raise concerns about the broader implications for Australian jobs and the aviation market.
Qantas, which has long been a dominant player in Australia’s aviation sector, has previously been critical of Qatar Airways. Notably, the airline lobbied the federal government against the Gulf carrier’s bid to increase flight frequencies to Australia earlier this year—a proposal that ultimately failed. However, the Qantas leadership is now taking a more measured approach to Qatar Airways’ interest in Virgin Australia, with Chair John Mullen emphasizing that Qantas is not opposed to foreign airlines owning stakes in Australian carriers.
“Qantas is not opposed to foreign airlines owning stakes in Australian airlines,” Mullen said during the meeting. “As part of the regulatory examination of the proposed transaction, we would anticipate that the proposed deal will be assessed in the context of Australian jobs and employment, the effectiveness of Australia’s air services framework, and the appropriateness of wet leasing arrangements.”
This statement highlights the broader regulatory and political considerations that come with foreign investment in Australia’s aviation industry. The government’s approval of Qatar Airways’ 25% stake in Virgin Australia will likely hinge on its ability to address these concerns, particularly around job creation and compliance with Australia’s air services framework.
Virgin Australia, which emerged from bankruptcy during the COVID-19 pandemic, is seeking a more stable financial footing and greater competitive leverage through its partnership with Qatar Airways. The proposed stake would give the Gulf carrier a strategic foothold in the Australian aviation market, further enhancing its global network. Qatar Airways is already a major player in international travel between Australia and destinations across Europe and the Middle East, particularly through its hub in Doha.
Virgin Australia is also positioning itself to capitalize on the partnership by seeking government approval to operate flights from Australia to Doha by June 2025. These flights would be operated under a “wet lease” arrangement, wherein Qatar Airways would supply both the aircraft and crew. This plan has attracted criticism from certain Australian labor groups, particularly the union representing Qantas pilots, which argues that the proposal does little to create jobs within Australia.
The arrangement raises questions about the role of foreign carriers in the domestic labor market. Wet leasing—where a foreign airline operates flights on behalf of a domestic carrier—has been a contentious issue in the industry, as it typically limits job creation for Australian pilots, crew, and ground staff.
A central point of contention in the proposed Qatar-Virgin deal is its impact on Australian jobs. The Australian and International Pilots Association (AIPA), which represents Qantas pilots, has voiced strong opposition to Virgin Australia’s wet leasing proposal. The union argues that this arrangement could sideline local workers, prioritizing foreign employment over the creation of domestic aviation jobs.
“This proposal does nothing for Australian jobs,” the AIPA said in a statement, reflecting the broader concern among unionized aviation workers. The union’s stance adds pressure on the federal government to carefully evaluate the implications of Qatar Airways’ entry into Virgin Australia, particularly concerning employment opportunities for local talent.
As the government continues its review of the deal, it will need to weigh these concerns against the potential benefits of increased competition and expanded flight options for Australian travelers.
In light of Qatar Airways’ existing market presence and Virgin Australia’s potential expansion, Qantas has doubled down on its own long-haul strategy, investing heavily in ultra-long-haul routes that could give it a unique competitive edge. CEO Vanessa Hudson emphasized that Qantas remains confident in its ability to compete, even if the Qatar-Virgin partnership proceeds.
“Qantas welcomes competition and does not have a specific figure on how the proposed Qatar deal would impact the company,” Hudson said at the meeting.
Qantas has been aggressively pursuing non-stop, ultra-long-haul flights, such as its Perth-London and Perth-Paris routes, which eliminate the need for a layover in hubs like Doha. The airline has also announced plans for a Sydney-London service that would further challenge traditional one-stop itineraries. This strategy aims to capitalize on the demand for direct flights and cater to a premium customer segment willing to pay for the convenience of avoiding stopovers.
Qantas’ focus on ultra-long-haul travel comes as part of its broader Project Sunrise initiative, which involves investing in new, fuel-efficient aircraft capable of flying non-stop from Australia to virtually any city on the globe. The airline’s long-term vision is to dominate this niche market, where it believes it can outshine one-stop competitors like Qatar Airways.
As part of its own fleet expansion, Qantas is also incorporating aircraft through both wet and dry lease arrangements. The airline currently wet leases several aircraft from Finnair, a European carrier, but these planes are expected to transition to dry lease contracts by the end of 2025. This shift means that while Qantas will continue to use the Finnair aircraft, they will be flown by Qantas crew, thereby addressing concerns about local job creation.
This move illustrates Qantas’ commitment to maintaining a robust and Australian-operated fleet, a point of distinction as Virgin Australia faces criticism for its reliance on wet leasing arrangements with Qatar Airways.
Wet leasing has historically been used by airlines as a stopgap solution to fill capacity gaps without having to invest in new planes or crews, but it also raises questions about long-term sustainability and job creation. By transitioning to a dry lease model, Qantas is signaling its intent to retain control over its fleet operations while continuing to expand its international reach.
The federal government’s review of the Qatar Airways-Virgin Australia deal will likely focus on several key factors, including the potential impact on jobs, market competition, and the overall structure of Australia’s air services framework. In his remarks, Qantas Chair John Mullen pointed to these issues as central to the regulatory process, suggesting that the deal must be assessed against the national interest.
In addition to the job concerns raised by unions, the government will need to consider the competitive dynamics of the domestic aviation market. Virgin Australia has historically played a crucial role in providing competition to Qantas on both domestic and international routes, and Qatar Airways’ investment could further strengthen Virgin’s ability to challenge the market leader.
However, increased foreign ownership and reliance on wet leasing arrangements could complicate the regulatory review. The government may seek assurances that the deal will not undermine the local workforce or distort Australia’s aviation industry by disproportionately favoring foreign carriers over domestic ones.
The Qantas-Virgin rivalry is set to intensify if the Qatar Airways stake is approved, with both airlines vying for market share in the increasingly competitive international travel segment. While Qantas has a dominant presence, particularly with its focus on ultra-long-haul routes, Virgin Australia’s partnership with Qatar Airways would give it access to a powerful global network that could attract more passengers, particularly for travel between Australia and Europe.
Increased competition generally benefits consumers by driving down prices and expanding travel options, but it also challenges incumbents like Qantas to innovate and differentiate their services. With both airlines pursuing distinct strategies—Qantas through ultra-long-haul flights and Virgin through expanded one-stop offerings—the Australian aviation industry is on the cusp of a new era of competition.
