Govt approval granted for Qatar Airways to buy 25 per cent stake in Virgin Australia

Qatar Airways’ bid to acquire a 25 per cent stake in Virgin Australia has been approved by the Federal Government.

The deal opens the way for Virgin to lease planes from the Qatari airline and compete on routes to and from Australia and Doha, beginning in June.

The Government needed to approve the move under foreign investment rules, with the tick of approval announced on Thursday morning.

The deal will now be subject to International Air Services Commission approval, which has to green light an allocation of air rights for flights between Australia and Qatar.

A Virgin spokesperson said the international commission submission was uncontested.

The tie-up also still requires the approval of the Australian Competition and Consumer Commission.

The ACCC last week released a draft determination giving its support.

Virgin Australia said entering the market for flights to and from the Middle Eastern hub would push down prices.

The deal comes at a time when Turkish Airlines and multiple Chinese airlines are running more flights to and from Australia.

Subject to this final approval, flights from Brisbane, Perth and Sydney to Doha will begin in June. Tickets have been on sale for months, with Melbourne to Doha offerings to begin in December.

People stepping off a Virgin Australia flight in Doha are then connected to Qatar Airways’ expansive international routes.

Concerns had been raised by pilot and cabin crew unions about staff working under less strict Qatari labour laws.

In a statement on Thursday, Virgin said staff are keen.

“Following consultation with unions and relevant cabin crew and pilot communities, there has been an overwhelming response to the expressions of interest for secondment opportunities for Virgin Australia pilot and cabin crew with Qatar Airways.”

“This will also provide promotional opportunities for other team members and new hires through the backfilling of seconded staff.”

Flight Centre chief executive Graham Turner said the 28 extra flights out of Australia each week would lower airfares.

“It’s been a long time coming … this is a really good move for international travellers out of Australia for sure,” he told the Today show on Thursday morning.

“It’s a significant number (of flights) … the capacity is quite high and it will certainly make a difference in terms competitiveness and capacity.

“Airfares generally have been pretty reasonably high. They’ve come off a bit recently, but also the capacity – it’s not that easy to get a spare seat these days.”

The ACCC revealed on February 18 that the hottest area of opposition are so-called wet leases that involve Qatar Airways will providing the aircraft, key maintenance services, pilots and cabin crew for Virgin’s international flights.

The airlines were seeking approval for wet leases for up to five years, a period that industry players claimed was exceptionally long.

But Dr Chalmers’ approval announcement reveals that Qatar and Virgin had committed to consult with unions on Virgin providing its own aircraft and crew for these flights within three years.