Australia on Thursday approved Qatar Airways buying a 25% stake in Virgin Australia from U.S. private equity firm Bain Capital, posing a challenge for national flag carrier Qantas that has long dominated Australian air routes.

Australian travellers could face cheaper airfares after Qatar Airways' 25 per cent stake in Virgin Australia was approved federal government.

The deal will open new routes for travellers and is expected to provide a long-term pathway for Virgin Australia to operate its own long-haul flights.

The Australian government on Thursday approved Qatar Airways' move to buy a 25% stake in Virgin Australia from U.S. private equity firm Bain Capital saying the deal would deliver more international flights and support jobs.

Move will inject foreign competition into Australia's Qantas-dominated aviation sector. Read more at straitstimes.com.

The treasurer said his decision was in line with the advice of the Foreign Investment Review Board, and that the approval is subject to legally enforceable conditions including Australian representation on Virgin’s board, long-haul flight training of Australian pilots and cabin crews in Doha, and protection of its customer data.

Qatar's minority 25 per cent stake in Virgin Australia has been approved by the Federal Government with VA long-haul flights to Doha starting on 1 June.

Australians will benefit from stronger competition in the aviation sector, the Treasurer has said, as he approved Qatar Airways acquiring a 25 per cent stake in Virgin Australia. The approval will mean 28 new weekly return services between Doha and Perth, Brisbane, Sydney and Melbourne.

Australia's competition watchdog on Tuesday backed a planned alliance between Virgin Australia and Qatar Airways, saying it would provide air travellers with improved services and products.