Virgin Australia Looking At Quick Return To Stock Market Listing – Simple Flying

Virgin Australia’s CEO Jayne Hrdlicka has said the airline may be listed on the stock exchange as early as next year.
When Virgin Australia went into administration in April 2020, then CEO Paul Scurrah said the airline was performing well, had great people, probably had too much debt and was killed off by COVID. The airline crashed with around A$7 billion ($4.97 billion) of debts, but when it emerged in the hands of US investor Bain Capital in November 2020, around A$4.4 billion ($3.1 billion) of that debt was written off.
The new Virgin Australia (VA) cut staff numbers by 30%, closed international operations, and simplified its fleet from five types to one. It won pay freezes and concessions from unions and aggressively renegotiated contacts with airports and suppliers. Apart from the staff and shareholders, the big losers were institutional and private investors who had only previously funded VA's buy-back of its loyalty program but were left with nothing. Aircraft and engine lessors also took a hit as VA cut its group fleet of Airbus, ATR and Boeing aircraft from more than 100 to just 56 Boeing 737s. It also renegotiated its order for 48 Boeing 737 MAX 8s down to 25 aircraft.
That is pretty typical of what financiers do when they take over a troubled asset, clean it up and get it ready for sale or stock exchange float. In an interview with The Australian newspaper today, VA CEO Jayne Hrdlicka said the airline had returned to profitability and is considering listing on the ASX [Australian Stock Exchange] as early as next year. She added:
"It's not outside the realms of possibility. It's a lot faster than we thought it would be and we are flattered that this soon after becoming a new company and starting from scratch we're in a position where we're having these conversations, because it's extraordinary."
Simple Flying has previously reported that Bain was considering options about listing VA. In late 2021 Hrdlicka told employees: "If and when there is something to say about future capital structures of Virgin Australia, you will hear it from us. Bain Capital under every scenario will be our strategic partner and our major shareholder for many years to come."
In today's report, The Australian says that Hrdlicka's comments are the first time the airline has confirmed an IPO is firmly on the table, despite the volatile equity markets.
Simple Flying contacted Virgin Australia today and requested the airline's input on the Hrdlicka interview about a possible listing. We were referred to Bain Capital, and their spokesperson told us:
"There has been no comment, and there is no comment from Bain Capital regarding this media speculation."
A report issued this week by the Australian Competition and Consumer Commission (ACCC) shows that 4.5 million passengers flew on Australia's domestic airlines in April. This was the highest since the pandemic began and was 89% of pre-COVID levels. Qantas carried around 37% and, combined with its subsidiary, Jetstar, had about 65% of the domestic market. VA was about 31% and Rex 4%. The ACCC provided Simple Flying with a chart of the market shares since 2019, and apart from some blips when the pandemic took hold, overall market shares have been steady.
At some point, Bain Capital will float or sell Virgin Australia and make some hefty windfall profits along the way. The restructuring that took place under administration set VA up for success, and with passengers back, the airline is taking advantage of its slimmed-down operation. The losers remain the individuals and businesses that lost those billions. Does it sound like a familiar tale from previous airline bankruptcies?
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Source: The Australian
Journalist – A professional aviation journalist writing across the industry spectrum. Michael uses his MBA and corporate business experience to go behind the obvious in search of the real story. A strong network of senior aviation contacts mixed with a boyhood passion for airplanes helps him share engaging content with fellow devotees. Based in Melbourne, Australia.

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