Virgin Australia is preparing to return to the Australian Securities Exchange with a $685 million initial public offering, marking the largest IPO in Australia this year. The move signals a significant milestone for the airline, which collapsed in 2020 due to the pandemic but has since made a strong comeback under the ownership of private equity firm Bain Capital.
The IPO will reduce Bain Capital’s holding in Virgin from 70% to 39.4%, bringing the airline’s market value to approximately A$2.3 billion. This offering is expected to raise about $110 million in fresh capital for the airline, while existing shareholders will pocket $574 million.
Virgin Australia has secured a strong domestic position, with a 34.4% share of the market, just behind Qantas’ 37.5%. The carrier has revamped its product offering and financial position in recent years, leaning into a ‘mid-market’ strategy that blends budget and full-service travel experiences. Chief Executive Jayne Hrdlicka said the IPO demonstrates confidence in Virgin’s business model and outlook, noting that the airline’s “transformed cost base” and “modern fleet” set it up for sustainable profitability.
The move comes amid a resurgence in domestic tourism demand and improved financial performance across the sector. Travel agents are likely to see fresh interest in Virgin’s services as the airline aims to expand its network and upgrade its fleet further. Virgin’s IPO is also expected to bring renewed focus on competitive pricing and product innovation in Australia’s domestic aviation market, setting the stage for a more dynamic landscape in the months ahead.
A key component of Virgin Australia’s revitalisation strategy is its strategic partnership with Qatar Airways, which now holds a 23% stake in the airline. This alliance, approved by the Australian Competition and Consumer Commission, introduces 28 new weekly return flights between major Australian cities and Doha, commencing next week.
These services, operated under a wet lease agreement using Qatar Airways’ aircraft and crew, will carry Virgin Australia flight numbers, enhancing connectivity to over 100 destinations across Europe, the Middle East, and Africa. The partnership not only expands Virgin’s international footprint but also offers passengers enhanced loyalty benefits through integrated frequent flyer programmes, and is projected to generate an estimated $3 billion in economic value over five years, bolstering Australia’s tourism and aviation sectors.
