Is a Virgin Australia IPO round the corner?

Highlights:

• Virgin Australia Airlines is looking to reap benefits of the flourishing aviation market after opening of state and international borders.
• The company plans to go public via initial public offerings (IPOs) expected in 2023.
• Virgin Australia is owned by Bain Capital, which bought the airline for AU$3.5 billion, including liabilities, in 2020.
• Virgin’s peer, Qantas, is expected to post a first-half underlying profit before tax of between AU$1.2 billion and AU$1.3 billion.

Virgin Australia Airlines, which holds the spot of Australia's second-largest aviation carrier, is looking to reap benefits of the flourishing aviation market after opening of state and international borders.

The company is looking to explore the option of going public via one of the largest initial public offerings (IPOs) of the year 2023. The IPO will set the path of relisting the airline that Bain Capital owns privately.

The airline was placed in voluntary administration and was bought by Bain Capital for AU$3.5 billion, including liabilities, in 2020. The buyout got the approval of the creditors in September 2020.

(Source: Iwikoz6 | Megapixl.com)

The company is expecting to milk the IPO market, which some experts believe might show a strong rebound after falling in 2022. And with inflation plateauing and even showing signs of decline in the recent data Consumer Price Index (CPI), bankers and investors seem hopeful for IPO markets in 2023. 

With IPO news in the market, the company is attracting a whole lot of limelight these days. However, there are several questions that investors have in their minds before the expected IPO launch.

Is it possible to invest in Virgin Australia?

Virgin Australia came into existence in 2000 and debuted on the ASX in 2003. However, owing to stiff competition and several months of losses, the company failed to make a mark in the airline market. Covid-19 acted as the last nail in the coffin, posing the airline into administration and eventually getting delisted from the ASX.

Since the company is not listed for trading on ASX, it's not possible to currently invest in Virgin Australia.

What's the current status of the airline?

With the offset of Covid-19, the demand in the travel industry is roaring back. People are experiencing revenge travelling and compensating for the visits lost during the pandemic era. This has made Virgin Australia more financially comfortable than it was three years ago.

The company currently holds a more efficient fleet, with just Boeing 737s catering to only domestic and short-haul international destinations.

How are Virgin Australia’s peers doing?

One of the company’s peers, Qantas (ASX:QAN), is expected to post a first-half underlying profit before tax of between AU$1.2 billion and AU$1.3 billion. The numbers look more fascinating after considering the accumulated losses since 2020, which cumulates to AU$7 billion.

Who's the current CEO of Virgin Australia?

The current CEO of Virgin Australia is Jayne Hrdlicka. She was the former group chief executive officer of Jetstar Airways Pty Ltd (a subsidiary of Qantas). Bain hired her in 2020.