Qantas shares drop 4.5% following Qatar-Virgin deal

Qantas shares are down 4.5 per cent following the news that Qatar Airways is set to acquire a 25 per cent stake in Virgin Australia. The share price has dropped from $7.41 to $7.07 following the bid.

If approved, the deal will result in Virgin Australia adding additional capacity between Australia and Doha which Jefferies analysts have said will negatively impact Qantas’ FY26 international earnings.

Qatar is largely considered to be one of the best airline in the world, winning Skytrax’s best airline award for the 8th time this year.

Virgin says the stake – subject to regulatory approval – will offers a deeper strategic relationship and will drive increased competition in Australian aviation.

With the collapse of Bonza and Rex, Virgin says domestic competition in Australia is dependent on Virgin Australia thriving “through the inevitable ups and downs of aviation”.

Despite the recent drop, Qantas shares are still up 32.06 per cent YTD. The airline has performed exceptionally well this year with its 32.06 per cent increase significantly outperforming the S&P/ASX 100 which is up 7.67 per cent.

The national carrier’s share price skyrocketed after it released its full-year results at the end of August. For the 12 months ending 30 June Qantas reported a revenue increase of 10.7 per cent, boosted by Jetstar and Qantas loyalty.

The impact of the Qatar-Virgin deal on Qantas will largely be dependent on other factors such as the price point of the additional flights.