Virgin Australia/Qatar Airways deal offers market inroads for both airlines

A proposed investment deal between Qatar Airways and Virgin Australia could have collateral network benefits for both airlines, thanks to a planned fleet move that would increase their access to important international markets.

Qatar Airways has confirmed that it plans to acquire a 25% stake in Virgin Australia. An investment of about that much had been rumoured for months, but another part of the agreement was more surprising, and provides additional insight into the expected advantages.

The airlines unveiled plans for Virgin Australia to wet-lease widebody aircraft to operate multiple routes to Doha under their partnership.

While details of the fleet arrangement are yet to be defined, it offers the opportunity for Qatar Airways to increase feed into its network from lucrative Australian markets, and boosts Virgin Australia's access to a major hub for onward international connections.

The proposed deal between the airlines sheds more light on Virgin Australia's intended ownership structure, as well as a shift in strategy regarding international operations.

From a political perspective, there will be lots of scrutiny on the regulatory response to the proposal, given that competition in Australia's international market has been a hot topic recently.