Qatar is negotiating to purchase a 20% stake in Virgin Australia to add more flights to Australia and grow its market.
👉 Background: Qatar Airways was established by the Qatari government back in 1993 and has grown to become the best airline in the world for many years running.
👉 What happened: Last year, Qatar Airways wanted to add 21 extra international flights to Australia, but this was denied by the Federal Government. Now, Qatar is negotiating to purchase a 20% stake in Virgin Australia to get its foot in the door another way.
👉 What else: This deal will need approval from the Foreign Investment Review Board (FIRB) as well as the Federal Government. If this deal does go through, it could be. a very savvy strategy for Qatar Airways to gain more access to the Australian market.
💡If you can’t talk your way in, buy your way in. When Qatar Airways was rejected from additional flights, this was seen by many people as a way to protect Qantas’ market share on international flights.
💡So by purchasing a stake in Virgin Australia, it gives Qatar Airways access to a previously-limited market.
💡Uber did the same in the ride-sharing space. In 2019, it acquired Careem, the dominant ride-sharing company in the Middle East and parts of Northern Africa, for $3.1 billion USD. This was after Uber failed to dominate in the Middle East itself, and so “bought its way in” to gain the upper hand in these regions.
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