Qantas shares tumble as Qatar Airways buys Virgin Australia stake
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The news: Qantas shares dived at market open on the ASX after Qatar Airways agreed to acquire a 25% stake in rival Virgin Australia.
The numbers: Qantas shares were down 3.4% to $7.17 by 10:45am AEST, having seen its value gain by around a third since the start of the year.
Qantas and Virgin Australia together control around 90% of Australia's domestic aviation market. The deal will require approval from the Australian Competition and Consumer Commission and the Foreign Investment Review Board.
The context: Under the proposed deal, Virgin Australia plans to launch flights from Brisbane, Melbourne, Perth and Sydney to Doha and enable Virgin's "measured entry" into long-haul international flying by mid-2025.
The move could spell added competition for Qantas, with Virgin Australia's CEO Jayne Hrdlicka telling ABC News Breakfast that it would allow the airline to better compete within Australia and expand its international flight offerings.
What they said: "It means that we've got an important shareholder who has scale that we don't have, who has expertise that we don't have," Hrdlicka said.
"That can help us compete better domestically by giving us access to the scale, to purchase things more cost effectively and to invest in technologies, invest in sustainable aviation fuel," she said.
The source: ABC
