Sydney, Oct 1 (IANS): Qatar Airways has reached a deal to buy a minority stake in Australia's second-largest airline, Virgin Australia.

Virgin Australia announced on Tuesday that Qatar Airways will acquire a 25 per cent equity stake in the airline from its owner, Bain Capital, pending approval by the government's Foreign Investment Review Board.

Under the proposed deal, Virgin Australia plans to launch flights from Sydney, Melbourne, Brisbane and Perth to Doha, reports Xinhua news agency.

Jayne Hrdlicka, chief executive of Virgin Australia, said that the proposed long-haul services would generate an economic benefit of $2.07 billion to the Australian economy through incremental visitor flows over the next five years.

"This partnership brings the missing piece to Virgin Australia's longer-term strategy and is a huge vote of confidence in Australian aviation," she said in a statement.

"Importantly, it will further strengthen Virgin Australia's ability to compete over the long term, which will inevitably translate into more choice and even better value airfares for consumers."

Virgin Australia is the country's second-biggest airline and is the only competitor to Qantas, and its budget carrier Jetstar, on major domestic routes.

In April 2020, Virgin Australia became one of the first major airlines in the world to collapse during the Covid pandemic when it entered voluntary administration.

Bain Capital, a US private investment firm, bought the airline for $2.4 billion and it came out of administration in November 2020.

The minority stake acquisition by Qatar Airways came after the federal government in 2023 blocked an application for the airline to operate extra weekly services between Doha and Sydney, Melbourne, Brisbane and Perth.