Qatar Airways Near to Acquiring up to 20% of Virgin Australia

[justinbrett]

hopefully one day QR can increase their stakes

You’ve said this before an I’m quite curious, why do you care?

Short of an outright takeover (which would never be allowed by the FIRB), how does this benefit you if QR owns 20% or 40%?

What’s wrong with an Australian airline owned by (at least some) Australians? Why does it have to be owned by a foreign government?

VA1 had a majority owned by three world class airlines, and that didn’t save them. I’m struggling to see how QR20% or QR40% will make any difference other than how the profits are distributed.

 

[jase05]

You’ve said this before an I’m quite curious, why do you care?

Short of an outright takeover (which would never be allowed by the FIRB), how does this benefit you if QR owns 20% or 40%?

What’s wrong with an Australian airline owned by (at least some) Australians? Why does it have to be owned by a foreign government?

VA1 had a majority owned by three world class airlines, and that didn’t save them. I’m struggling to see how QR20% or QR40% will make any difference other than how the profits are distributed.

I would hope with a bigger piece of the pie they have a bigger say on the running of VA. I would prefer QR to be able to do things their way and have a reasonable amount of control over things. Hopefully though even at 20% they have one of their folk installed as CEO

 

[justinbrett]

I would hope with a bigger piece of the pie they have a bigger say on the running of VA. I would prefer QR to be able to do things their way and have a reasonable amount of control over things. Hopefully though even at 20% they have one of their folk installed as CEO

But that was my point. This didn’t work for VA1 with 60%+ owned by three world class airlines. Two of which far more experienced operating in similar markets that VA operates.

QR is a completely different airline to VA, both in market and strategy. If anything this could be a NZ/AN situation where QR cannibalises VA to prop up QR.

A Qatari national as VA CEO? Refer to my meme above. . That would definitely be saying the quiet part out loud!

I personally don’t have a problem with QR owning 20% but there’s certainly a vibe of “I hope QR takes ovah!!!!” to this discussion.

 

[PERLHR]

But that was my point. This didn’t work for VA1 with 60%+ owned by three world class airlines. Two of which far more experienced operating in similar markets that VA operates.

QR is a completely different airline to VA, both in market and strategy. If anything this could be a NZ/AN situation where QR cannibalises VA to prop up QR.

A Qatari national as VA CEO? Refer to my meme above. . That would definitely be saying the quiet part out loud!

I personally don’t have a problem with QR owning 20% but there’s certainly a vibe of “I hope QR takes ovah!!!!” to this discussion.

Ofcourse we don't really know why QR want even20 percent. However they do! We don't know the future plans of IAG. Maybe the different conditions for market and strategy (at the moment) is actually something that motivates QR to start and build their interest in VA. While supporters of this "investment" don't know...to be fair neither do you. We shall all have to wait and see what happens and what it means toVA and QR and alliances or the likes. However Australian aviation is fickle. There have been far to many failures. This may, just may, help secure VA and perhaps also allow for expansion.

 

[jase05]

But that was my point. This didn’t work for VA1 with 60%+ owned by three world class airlines. Two of which far more experienced operating in similar markets that VA operates.

QR is a completely different airline to VA, both in market and strategy. If anything this could be a NZ/AN situation where QR cannibalises VA to prop up QR.

A Qatari national as VA CEO? Refer to my meme above. . That would definitely be saying the quiet part out loud!

I personally don’t have a problem with QR owning 20% but there’s certainly a vibe of “I hope QR takes ovah!!!!” to this discussion.

Perhaps it was a case of too many cooks with previous ownership model. It’s always going to be hard getting big egos to agree on everything. And it doesn’t have to be a Qatari National as VA CEO but would be nice to have someone close to QR rather than a Bain stooge like Jayne
There is obviously a reason why QR are investing in VA and the likes of Airlink which is also a fairly small operation. Let’s just see how it goes

 

[justinbrett]

There is obviously a reason why QR are investing in VA and the likes of Airlink which is also a fairly small operation. Let’s just see how it goes

Ofcourse we don't really know why QR want even20 percent. However they do!

Oh I never doubted QR’s motivation. That part is obvious! (Hence my comment about saying the quiet part out loud).

The question was how does this benefit VA or its passengers beyond a 20% stake. I get an initial investment to cement the ties to QR, I just don’t see what extra benefits come at a higher stake.

Of course you also have to be careful what you wish for. Alliances with airlines like EY, SQ and even UA could be on the chopping block rather soon. QR would love to sell you SYD-DOH-LAX or JFK instead.

 

[TheInsider]

This could all be a huge conspiracy where QF and QR are actually really close and QF wants QR to buy out VA, so then QR can then give up, bankrupt and then dissolve the company and then just be a QF/JQ Australian operation. Then QR would codeshare on all domestic flights, stay in OW and give OW and IAG huge benefits, then making Star Alliance even less relevant in Australia, more so than it is now. Why own a domestic Australian airline when you can just earn commission on the sales of domestic airfares. It's not like we have a good track record of start-up airlines etc etc

 

[jase05]

Oh I never doubted QR’s motivation. That part is obvious! (Hence my comment about saying the quiet part out loud).

The question was how does this benefit VA or its passengers beyond a 20% stake. I get an initial investment to cement the ties to QR, I just don’t see what extra benefits come at a higher stake.

Of course you also have to be careful what you wish for. Alliances with airlines like EY, SQ and even UA could be on the chopping block rather soon. QR would love to sell you SYD-DOH-LAX or JFK instead.

Yep, one of the unfortunate side effects. I love EY and will miss them but from the day QR and VA became partners I’ve known that the day will probably come when they part ways and we have seen that partially already. Things change though and alliances/partnerships come and go so we will just have to sit back and see what happens

 

[TheInsider]

Yep, one of the unfortunate side effects. I love EY and will miss them but from the day QR and VA became partners I’ve known that the day will probably come when they part ways and we have seen that partially already. Things change though and alliances/partnerships come and go so we will just have to sit back and see what happens

OT but I wouldn't be surprised if EK eventually just 'bought out' EY at some point.

 

[jase05]

OT but I wouldn't be surprised if EK eventually just 'bought out' EY at some point.

There has been talk about a merger of sorts for a while and it probably makes sense for them to pool their resources.

 

[justinbrett]

OT but I wouldn't be surprised if EK eventually just 'bought out' EY at some point.

I think the wheels are already in motion on that one. It’ll probably end up like a AF/KL situation.

Emirates and Etihad announce interline expansion, offering better itinerary options to boost UAE tourism

DUBAI, UAE 4 May 2023: Emirates Airline and Etihad Airways have signed a Memorandum of Understanding (MoU) to expand their interline agreement and provide travellers additional itinerary options when visiting the UAE. This first of its kind agreement between the two UAE carriers aims to...

www.emirates.com

 

[jrfsp]

OT but I wouldn't be surprised if EK eventually just 'bought out' EY at some point.

Abu Dhabi are far too proud to let that happen

 

[ANstar]

SkyTeam is the other one. And QF partners with Air France and KLM that are key SkyTeam alliance members also. I believe QF is one of the founding members of oneworld so it is unlikely they'd leave. But the relationship is definitely odd, as you point out the relationship with Emirates, and the disdain of MH, despite QF being their sponsors into oneworld.

SAS were a founding member of STAR and they have just jumped ship to Skyteam.

You’ve said this before an I’m quite curious, why do you care?

Short of an outright takeover (which would never be allowed by the FIRB), how does this benefit you if QR owns 20% or 40%?

What’s wrong with an Australian airline owned by (at least some) Australians? Why does it have to be owned by a foreign government?

VA1 had a majority owned by three world class airlines, and that didn’t save them. I’m struggling to see how QR20% or QR40% will make any difference other than how the profits are distributed.

Why can't they own more than 20%? Bain is 100% foreign owned is it not?

This could all be a huge conspiracy where QF and QR are actually really close and QF wants QR to buy out VA, so then QR can then give up, bankrupt and then dissolve the company and then just be a QF/JQ Australian operation. Then QR would codeshare on all domestic flights, stay in OW and give OW and IAG huge benefits, then making Star Alliance even less relevant in Australia, more so than it is now. Why own a domestic Australian airline when you can just earn commission on the sales of domestic airfares. It's not like we have a good track record of start-up airlines etc etc

Or it could be a way to push QF into dropping the partnership with EK and moving accross to QR by threatening to get equity in a rival... stranger things have happened.

 

[justinbrett]

Why can't they own more than 20%? Bain is 100% foreign owned is it not?

My comments were in context of why a member hopes QR takes up a bigger stake. Why not hope for an Australian company to invest?

But more generally there is a big difference between a foreign government owning it vs a foreign private equity fund. And to be blunt, we do differentiate something being owned by the US vs Qatar.

 

[MooTime]

My comments were in context of why a member hopes QR takes up a bigger stake. Why not hope for an Australian company to invest?

But more generally there is a big difference between a foreign government owning it vs a foreign private equity fund. And to be blunt, we do differentiate something being owned by the US vs Qatar.

It's been said about 3x..... The larger your holding the more directors / more say you have on the direction of the company.

More benefits with QR.

 

[justinbrett]

It's been said about 3x..... The larger your holding the more directors / more say you have on the direction of the company.

More benefits with QR.

I didn’t ask why QR would want a greater share. That much is obvious.

Why as a VA pax would you want it? What are these extra benefits you speak of? Why would they be offered at 40% and not 20%?

Genuine question. I don’t understand this line of thinking, as QR isn’t going to be the saviour of VA2 just as SQ/NZ/EY wasn’t for VA1.

Does VA2 need saving? I wouldn’t have thought so. Seems to be doing just fine.

 

[HS-TQE]

SQ and NZ also had two failed attempts at the Australian market. NZ also has to deal with people's very long memories of their (NZ) involvement in the Ansett fiasco.

In addition SQ's investment record overall isn't much better than Etihad's either.
Saying that none of the airline investors around the world doesn't have 'perfect' records as there's bound to be at least 1 investment on their portfolio which may had lost them a ton of money.

 

[moa999]

Remember also that CX and CA have had long term cross-shareholdings despite being in different alliances.

Both ownership, relationships and FF earning can exist differently for quite long periods

 

[MooTime]

I didn’t ask why QR would want a greater share. That much is obvious.

Why as a VA pax would you want it? What are these extra benefits you speak of? Why would they be offered at 40% and not 20%?

Genuine question. I don’t understand this line of thinking, as QR isn’t going to be the saviour of VA2 just as SQ/NZ/EY wasn’t for VA1.

Does VA2 need saving? I wouldn’t have thought so. Seems to be doing just fine.

You can lead a horse to water, but you can't make them drink.

 

[justinbrett]

The Aus reporting the share is 19% (likely as that is not considered a significant interest by the FIRB, which is 20%, although approval is still required as a foreign state owned entity).

VA is apparently calling this “Project Doubles” which is curious. Doubling capacity to Doha?

https://www.theaustralian.com.au/business/aviation/project-doubles-the-qatar-deal-virgin-australia-believes-can-help-it-up-the-ante-against-qantas/news-story/805adb31976306828ca05747a5b86a55?amp

You can lead a horse to water, but you can't make them drink.

Yeah, I didn’t think you’d have an answer either.