A major development for Virgin was the entry of Qatar Airways as an anchor investor and long-haul flight partner last year. Qatar took a 23.4 per cent stake in Virgin, providing significant backing for the airline, which previously struggled against its Qantas.
While Qatar’s share of Virgin remained unchanged in the IPO, Bain Capital sold down its stake from 70.2 per cent to 40 per cent, according to the share sale documents.
Virgin entered a wet lease agreement with Qatar earlier this month, which will see both airlines operate flights from Australia’s capital cities to Doha using Qatar’s planes and crew. The partnership serves as a gateway for Virgin to Europe, the Middle East and North Africa, enabling it to re-enter the long-haul flight market without the operational challenges that hindered its previous forays into international routes.
It’s a sensitive time to start the co-operation on the major air traffic route through the Persian Gulf region, which connects Australia with Europe. An Iranian missile attack targeting US military assets at a base near Doha, where Qatar is based, in retaliation for America’s bombing mission on Iran’s nuclear weapons labs at the weekend forced the closure of airspace in the region on Tuesday morning. This in turn caused hundreds of delays and diversions of flights through routes linked to the Middle East.
Speaking on Monday, before Iran’s retaliation, Emerson said traveller demand for flights for the Qatar flights booked under through Virgin was strong.
“Typically when you launch new long-haul flights, it takes a little while to get going, but these have been strong right out of the gate,” he said. “There was obviously quite a bit of unmet demand that these flights were able to tap into, over the long term.”
The Market Recap newsletter is a wrap of the day’s trading. Get it each weekday afternoon.
About The Author
