Virgin Australia readies for long-awaited ASX arrival with $685m IPO

Virgin Australia has hit the runway for its return onto the Australian Securities Exchange with a near-$700 million initial public offering.

Its US private equity owner Bain Capital is selling 30 per cent of the airline at $2.90 a share, according to several media reports on Wednesday. The float is expected to raise $685m, valuing the airline at just over $2.3 billion.

The $2.90 price tag compares with major rival Qantas’ $10.70 closing share price on Wednesday.

Since 2023, Bain has sold a 25 per cent stake in Virgin to Qatar Airways, allowing the Australian airline to return to long-haul flights by using the Gulf carrier’s planes and crew to begin flying to Doha from Perth, Brisbane, Melbourne and Sydney from this month.

Under the float, Bain’s shareholding will drop from about 70 per cent to 40 per cent, while Qatar Airways will retain its stake.

Bain Capital bought Virgin in 2020 after it crashed into administration with billions of dollars worth of debt following the onset of the COVID-19 pandemic.

The US group has made several attempts to get Virgin back on to the ASX after the airline’s first run as a publicly traded entity didn’t go so well. The group abandoned plans for a float towards the end of 2022, with both Bain and Virgin blaming volatile share markets.

Another attempt was made in 2023 but this too was abandoned, with Bain blaming a variety of external factors like offshore investor briefings having to be canned to allow then-CEO Ms Hrdlicka to deal with the death of her husband.

With the S&P-ASX200 hitting a new 50-day high on Wednesday, it opens a window for Bain to press ahead with Virgin’s long-awaited return to the ASX after an absence of nearly five years.

In April, Australian shares crashed to their biggest loss since the early days of COVID-19, with more than $100b wiped from stock values as the fallout from US President Donald Trump’s tariffs wreaked havoc on global markets.

A report from the competition regulator late last month found dwindling competition and record profits cleared the way for an airline duopoly between Qantas and Virgin.

After the demise of Regional Express, which saw it withdraw from capital city routes, Virgin increased its share of passengers to about 34 per cent in March, up from the 31.3 per cent recorded a year prior.

Virgin also acquired three of Rex’s Boeing 737 aircraft leases, which has facilitated its ability to add seat capacity and improve network reliance.

Qantas Group reported earnings before interest and taxes of $1.5b for the first half of the financial year, with $916m coming from its domestic operations across both Qantas and Jetstar, according to the Australian Competition and Consumer Commission report.

“Jetstar has been able to capitalise on the continued absence of competitive pressure from another low-cost carrier in the domestic market to increase its market share and operating margin,” ACCC commissioner Anna Brakey said at the time.

While Virgin Australia does not publicly report half-year results, Ms Hrdlicka in February said the airline had achieved record profits over the period.