Workers have raised concern about Qatar Airways’ proposed one-quarter stake in Virgin Australia – a deal that could open the door to greater competition and a stockmarket float.

Qatar Airways Group intends to acquire a minority equity stake in Virgin Australia from Bain Capital, the airlines announced on Tuesday.

The deal, which is subject to regulatory approvals, would enable Virgin to launch flights within a year from Brisbane, Melbourne, Perth and Sydney to Doha, connecting into Qatar Airways’ global network under a wet lease.

A wet lease involves one airline providing aircraft, complete crew, maintenance and insurance to another airline.

The measured return to long-haul international flights would begin in mid-2025, three years after Virgin started codesharing with Qatar Airways.

The deal would make the local airline more competitive and “inevitably” translate into more choice, better value airfares and more Australian jobs, Virgin chief executive Jayne Hrdlicka said.

“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.

Tuesday’s announcement came two weeks after Hrdlicka dismissed reports that Qatar Airways was seeking a stake of up to 20 per cent in the airline, saying “some creative fiction” had been written.

“We don’t play with rumour and innuendo but what I will say is we have the world’s best [airline] partners – United Airlines, Air Canada, Singapore Airlines, Qatar, ANA, Hawaiian – and we’re working every day to deepen those relationships and strengthen the experience we provide to our customers,” she told the CAPA Airline Leader Summit in Brisbane on September 13.

The addition of the cornerstone investor would also give Virgin and its shareholders scope to consider refloating on the Australian Securities Exchange.

The airline was delisted in 2020 after going into administration with almost $7 billion in debt before it was taken over by US-based private investment firm Bain.

“An IPO (float) would hopefully see lots of Australian institutions and retail investors joining Qatar as shareholders in Virgin Australia,” Hrdlicka told ABC TV.

The Transport Workers Union said any float should involve an employee share scheme.

That was among several demands workers wanted to resolve their reservations about Qatar Airways’ influence over their jobs and working conditions.

“There are understandable doubts about this deal, particularly for cabin crew,” TWU national secretary Michael Kaine said.

“A commitment to respect is expected and necessary given Qatar Airways’ track record.”

Competition in Australia’s aviation sector has been in the spotlight since the collapse of Rex Airlines, which had tried to challenge Qantas and Virgin’s dominance of east coast capital routes.

The announcement also comes a year after the Albanese government copped flak for knocking back Qatar’s proposal to double its 28 weekly services to Australia.

The decision came under scrutiny after it was revealed Qantas lobbied the government against allowing the extra flights, before posting a record $2.5 billion profit.

The proposed Qatar share deal would need approval from the Foreign Investment Review Board and other regulators.

Treasurer Jim Chalmers said he did not want to pre-empt the decision, but emphasised the government’s desire for a strong, competitive airline industry that delivered for consumers.

“We expect that components of the deal related to international flights will also be subject to ACCC merger authorisation consideration,” he said.

Qatar Airways, which is wholly owned by the Qatari government, said the proposed investment demonstrated its strategic alignment with Virgin Australia and collective ambition to deliver the best possible service and value to Australian passengers.

“We believe competition in aviation is a good thing and it helps raise the bar, ultimately benefiting customers,” Qatar Airways Group chief executive Badr Mohammed Al-Meer said.

“This agreement will also help support Australian jobs, businesses and the wider economy.”

The deal would leave Bain Capital with 67.5 per cent of Virgin Australia.

The remaining shareholders – Virgin Group (5 per cent) and the Queensland government (2.5 per cent) – are not involved in the Qatar sale.

-with AAP