Virgin readies for IPO in forseeable future
Virgin’s owners, Bain Capital, is looking to list the company on the ASX in order to cash in on the success seen by others in the industry.
Bain purchased the carrier and its velocity program in the early stages of the COVID pandemic for $3.5bn and while partner Mike Murphey says Bain are yet to make a final call it would seem likely it will list sooner rather than later as rival airlines Qantas and REX have seen growth of 45 percent and 20 percent respectively since July.
Virgin chief executive Jayne Hrdlicka told staff this week and in a note obtained by The Australian Financial Review, said Virgin is in a great position.
“We have taken this company to a position of real strength, we have a robust strategy and resilient business model, reflected in strong market share and high loads,” Hrdlicka said.
“We have grown our fleet by nearly 60 per cent over the last two years and will welcome brand-new 737-8 aircraft to the fleet this year.”
The move to begin the IPO process is a fast turnaround in relation to other private equity ventures in Australia. Bain took six years to re-float its last big ASX venture, MYOB.
The proposed listing also serves as another reminder that the travel industry is in the middle of a major bounce back following recent years of interruptions. For the first time in 15 years Australia has a new, independent airline with Bonza and although Virgin Australia posted an underlying loss of $386.7m in the year to June 30 Hrdlicka said “we are profitable and have the financial strength to invest in building resilience in our airline and supporting continued growth.”
The Transport Workers Union (TWU) said workers whose sacrifices ensured the company’s long-term future during a lengthy administration process must now be recognised.
“TWU members fought hard to save Virgin and have held new owners to account over the past two years, securing vital long-term commitments to the airline and workforce,” TWU national secretary, Michael Kaine, said.
“Virgin’s passionate and loyal workforce have stood by the company through incredibly tough times, and worked hard through immense workload pressures to ensure the business returned as a strong competitor.
“With a float now on the cards, workers must be rewarded for their crucial role in the company’s success. We welcomed Virgin’s announcement that it would bring forward a bonus profit share scheme as inflation surged, as well as additional reward payments.”
Email the Travel Weekly team at traveldesk@travelweekly.com.au
asx Bain Capital ipo jayne hrdlicka Transport Workers Union twu virgin australiaLatest News
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