Virgin Australia eyes upcoming ASX IPO: 'Doing at least as well' as Qantas

Virgin shares were dramatically wiped from the market in 2020. Could they return as soon as next year?

| More on:
A woman sits crossed legged on seats at an airport holding her ticket and smiling.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Key points

  • Virgin Australia shareholders were dealt a major blow in the midst of the COVID-19 pandemic when the airline fell into administration. It was ultimately bought by private capital, leaving investors high and dry
  • But there could be hope on the horizon for ASX airline fans. The company's CEO has reportedly flagged its return to the ASX, with its IPO potentially going ahead as soon as next year
  • Such optimism comes after years in which the airline worked to regain its market share – its domestic routes are now said to be at least as profitable as those of Qantas

One of the ASX's most renowned COVID-19 victims might be getting ready to launch back onto the market, flagging an upcoming initial public offering (IPO).

Virgin Australia deserted shareholders after it fell into the hands of administrators in 2020. It was ultimately snapped up by Bain Capital. Now, CEO Jayne Hrdlicka has told The Australian the airline has scrambled out of its despair to perform "at least as well" as Qantas Airways Limited (ASX: QAN)'s domestic business in 2022.

Let's take a closer look at the latest insight into the previously battered Australian airline.

Virgin Australia hints at upcoming ASX IPO

Wounded former Virgin shareholders could have another chance with the airline in the near future. Its CEO has hinted Virgin could undergo an IPO as soon as 2023.

Speaking on the potential of an upcoming IPO and ASX float, the airline's boss told The Australian:

It's not outside the realm 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.

Virgin Australia returned from administration in November 2020 with a 22% share in Australia's domestic passenger market. In the years since, the airline has worked to regain its strength.

The Australian Competition and Consumer Commission's latest report on airline competition found Virgin held between 31% and 35% of the market between December 2021 and April 2022.

Meanwhile, Qantas and its budget brand Jetstar respectively had 37% and 28% of the market in April.

Virgin also held the largest market share – 36% – on routes between larger cities in that time.

Hrdlicka reportedly believes Virgin's domestic routes' profitability is "doing at least as well" as Qantas' now.

Though, she told the publication the airline still carries $1.8 billion of debt. "The debt portfolio needs reviewing and we need to be able to fund growth," Hrdlicka said, courtesy of The Australian.

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on IPOs

An arrow going upwards with a road sign saying 'IPO ahead'.

Should you buy into an IPO or wait until shares start trading on the ASX?

IPOs can be exciting, but also dangerous for investors.

Read more »

A female miner wearing a high vis vest and hard hard smiles and holds a clipboard while inspecting a mine site with a colleague.

ASX IPO alert: Blockbuster copper listing coming soon

Here's what you need to know about this upcoming IPO.

Read more »

IPO spelt out on a laptop with a red and green bar chart underneath.

Fewer ASX IPOs in 2023, but here's how they've performed

We reveal the top 10 new listings by size and how their share prices have changed to date.

Read more »

IPO written in yellow and stuck in the air.
Materials Shares

Rich listers are buying into the IPO of ASX lithium explorer Kali Metals

There's a new lithium share in town. Here's what you need to know.

Read more »

IPO written in circles with a man holding a smartphone and a laptop open.
International Stock News

The highs and lows of the Instacart $11 billion IPO

Here is a closer look at the latest company to hit the Nasdaq exchange.

Read more »

Two businessmen shake hands against a tech backdrop, indicating a company IPO or a merger between two technology stocks.

This $85 billion company is about to start trading on the Nasdaq. Here's what you need to know

Arm is set to join the ranks of other AI high-flyers on the Nasdaq tonight.

Read more »

A businessman hugs his computer and smiles.
Materials Shares

The ASX welcomed a new lithium stock today, and it's up 50%!

Investors have been getting excited about this new lithium stock today.

Read more »

A male investor wearing a white shirt and blue suit jacket sits at his desk looking at his laptop with his hands to his chin, waiting in anticipation.

Redox share price drops after IPO

One of the biggest IPOs in some time has taken place on the ASX today.

Read more »