Latest news with #VirginAustralia
West Australian
15 hours ago
- Business
- West Australian
Virgin Australia expands Qatar Airways alliance with launch of Perth to Doha route
Despite the travel chaos that dominated news headlines earlier this week, the show still went on for Virgin Australia, with the carrier launching its inaugural Perth to Doha route on Thursday. As part of its milestone partnership with Qatar Airways, the airline has been phasing in its highly anticipated return to long-haul international flying over the past two weeks, and Perth has become the third Australian city to join the expanded network. The maiden departure from Perth International Airport was a positive sign for the aviation industry after the widespread disruptions caused this week by the ongoing conflict in the Middle East. The new Virgin Australia routes to Doha use Qatar's aircraft, which are equipped with the ultra-luxe Qsuite business class and feature the widest economy seats in the industry. The alliance between the two carriers is significant as it connects Aussies to more than 170 destinations worldwide and will grow the capacity of flights from Australia to Doha to 2.65 million seats a year by the end of 2025. There are also plenty of loyalty benefits for travellers who value their frequent flyer status. Velocity members will receive 50 per cent bonus status credits on bookings made from now to June 30 for travel between October 1 and May 27 2026 on eligible Virgin Australia flights between Australia and Doha. From October 1, Velocity will increase the number of status credits members will earn on the new routes to ensure consistency across Virgin Australia and Qatar Airways services. Silver members will score 50 per cent bonus points, with 75 per cent for Gold members, and 100 per cent for Platinum — in addition to the benefits already available to Velocity members, from business class upgrades to dining vouchers at Hamad International Airport, premium lounge access, and extra baggage allowance. Virgin Australia is celebrating the launch with a sale on fares to Doha and selected destinations in Europe. Travellers can save up to 15 per cent on eligible fares for travel between October 15 and March 31 2026, if booked by 11.59pm Eastern States time on June 30. Conditions apply. See more at
Sydney Morning Herald
21 hours ago
- Business
- Sydney Morning Herald
Cassy's teary farewell to passengers went viral. Now her airline is back in the game
It was a memorable moment at the start of the pandemic. In late March 2020, Cassy Appleton, Virgin Australia crew supervisor, delivered a pre-landing safety message to passengers that she appended with a farewell speech for the airline's international operation. Choking back tears, Appleton thanked customers and praised colleagues. Epitomising the fear of the widening COVID-19 pandemic, Appleton's speech quickly went viral. For Virgin Australia, the unknowns at the time were arguably more profound. Within weeks of the speech, the company – once a domestic competitor for Qantas, the only one – would be in voluntary administration, delisted from the ASX, later sold to US-based private equity group Bain Capital. On Tuesday, Virgin, reorganised, under new management, backed now by a Middle Eastern aviation behemoth, took the leap and returned to the Australian Securities Exchange, a viable, listed competitor to Qantas. Virgin has come full circle, in the process facing down reluctant regulators, unions and global uncertainty spurred by US President Donald Trump's trade wars – as well as hot wars in the Middle East. 'We're very proud of the product and service that we put out there,' chief executive Dave Emerson said. 'We provide strong competition and great value and service for Australian consumers'. Yet, the timing of Virgin's IPO only became a certainty a few months ago, after a number of conditions fell into place: the new chief executive, restored investor interest, the support of its largest union, the backing of stakeholder Qatar, Virgin's new strategy to be a simpler, more focused airline, and, ironically, the strength of Qantas' share price helping showcase domestic appetite for aviation stocks. Emerson took the role of chief executive in March, the same month the government approved Qatar Airways to take a share of Virgin and to participate in the 'wet-lease' agreement that allowed the Doha-based airline to increase the number of flights from Australia by 28 a week. The government had denied Qatar Airways' application for additional flights in 2023, citing elusive reasons of 'national interest'. Transport Minister Catherine King's inability to explain the basis of the government's rationale prompted a Senate inquiry which examined Qantas' potential influence on the government's ruling. Speaking this week before Virgin listed, Emerson reflected: '[It] was pretty difficult for us to go to market when there was uncertainty about whether that deal would be approved by the Foreign Investment Review Board. I think that that was the key trigger of us then being able to start to market the company.' Virgin's reliance on the government's approval of Qatar's participation was ironic, given the government's unwillingness to bail Virgin out during its 2020 fall. It was out of this dark period for aviation that Qantas laid off 1800 staff illegally, creating the industry backdrop from which Virgin would rise. 'It's a brutal industry, and Qantas has been a brutal player in that industry,' said Emily McMillan, national assistant secretary of the Transport Workers Union, which is the largest representative of Virgin employees. Loading The union was relieved when Virgin ended speculation and said its chief customer and digital officer, Paul Jones, who had earlier been involved in Qantas' industrial relations, would not replace outgoing boss Jayne Hrdlicka as chief executive. TWU's McMillan said: 'We're pleased that Virgin have made key choices in these last five years as they've navigated through this process to work with its workforce in a different way.' Ruling out Jones, who replaced Emerson as Virgin's chief commercial officer, paved the way for Emerson – one of the least known personalities in Australian aviation – to be named chief of the airline. Emerson was part of the Bain Capital team looking over the restructuring of the troubled airline that the US private equity group took control of in 2020. Father of four sons, a sometime reader of sci-fi (John Scalzi and Martha Wells) and author Michael Lewis, and a somewhat reluctant pickleball player, Emerson brought years of experience in aviation consulting from Bain & Company, where his predecessor Jayne Hrdlicka had once worked. Loading As the pandemic hit, Emerson and his wife had already been looking for an overseas posting. He said he had just dropped his youngest son off at university, before heading to the plane to come to Australia, a place that is the 'opposite of a hardship posting'. However, given the time, Emerson's first impression of the country was limited to the walls of a Marriott hotel room where he stayed upon COVID quarantine. Bain had named Reunion Capital as the independent adviser in 2023, which then appointed Goldman Sachs, UBS and Barrenjoey as book builders of the deal. Emerson's appointment in March signalled the start of the IPO process. Once Bain decided to launch, brokers and investors moved quickly to secure significant volumes of investor demand. On his first day on the job, Emerson met investors, as well as staff in Brisbane and Sydney, going on a tour of Virgin's front-line staff that would take him to Perth, Melbourne and Adelaide. Importantly, he met the union. 'We met with Dave Emerson on the first day of his job,' said TWU's McMillan, 'which we thought was a really positive sign of working collaboratively with the workforce.' Loading Emerson was to simplify the business, pivoting away from the complexity that helped expose it to loss before 2020. The plan was also to be focused on areas where Virgin could compete effectively. 'We want to win in the segment of the market that we've chosen to serve, the value segment,' Emerson said. That didn't mean unlimited, unchecked competition against larger rival Qantas, which helped drive Virgin towards unsustainable debt levels before 2020. Rather, Virgin would compete for premium leisure, small and medium business customers and value-minded corporate customers. 'We have a lot of respect for Qantas,' said Emerson, who notes that Qantas does a good job serving its core customer segments. 'That's one of the reasons that we chose the business model that, we thought, was built around segments that aren't as well served in their existing ... model.' Qatar Airways' participation would help. Virgin operates a simplified fleet of 100 mostly 737s domestically and in overseas destinations such as Fiji, Bali and Vanuatu. Under the 'wet-lease agreement' with Qatar, Virgin could 'carefully re-enter' long-haul travel while sidestepping the complex planning and operations it demands. (Under the deal, Qatar will provide the planes and crew for flights sold by Virgin.) From Qatar, Virgin gets commissions on flights sold, more users of its Velocity loyalty program, and, with more people flying into Australia, more traffic into Virgin's domestic lines. That's all good as long as international travel holds up, which is no certainty in a time of war in the Middle East and Donald Trump's on-again, off-again tariff announcements. Emerson said: 'The way our partnership with Qatar is structured, our economics are focused on the domestic business, and their economics are focused on the long-haul business. So even if demand didn't meet expectations, we wouldn't expect it to have a material effect'. Perceptions around the rebuilt airline mattered too. This meant convincing future investors that Virgin had changed since its days of damaging price wars with Qantas. Going into administration had wiped out the value of Virgin debt securities listed on the ASX. There was a bit of a 'hurdle to overcome how this is a different business now', said one person involved in the IPO, who described it as the 'first challenge' in taking the deal to market. But the outlook for aviation since the end of lockdowns had transformed. Demand for travel appeared limitless. Investors were highly attracted to the industry structure and saw Virgin 'with strong and stable market share and an ability to increase margins over the next couple of years'. Emerson's jammed up meeting schedule ahead of the IPO – banks, unions and company staff – left little time for interviews. Given the restrictions around what can be said before a company lists, and his sudden appointment as chief executive, there was often little Emerson could say. The air of mystery contributed to the sense of anticipation about the reception a relisted Virgin would get from the public. Loading On a recent visit to Melbourne Airport at Tullamarine, a sampling of Virgin passengers voiced sentiments that were uncannily close to Virgin's identified target market. While a number of passengers' stories began with pledges to never fly Qantas again, business travellers this masthead spoke to were generally happy with Virgin. One said Virgin appeared more 'inventive' while Qantas was 'stale'. Another bristled at Qantas' welcome-to-country announcements. Andrew Mills, who months ago spent 30 hours trying to get back to Australia from New Zealand after a Qantas cancellation, said: 'I made the decision to fly only with Virgin, and it's been pretty promising to date. 'I would say 95 per cent of the flights that I've been on since then have been on time and able to allow me to get to my destination as expected.' In fact, in May, Virgin's on-time arrivals reached 84.8 per cent while Qantas' stood at 82.5 per cent, according to the Bureau of Infrastructure and Transport Research Economics. One person with knowledge of the deal said Bain had done a 'pretty good job' of turning Virgin around, by finding a part of the market that avoids costly clashes with Qantas. Virgin 'should probably be able to earn increasing margins over time' by not, for example, competing directly for most international routes. Still, the aviation business is not an easy one to succeed at. There are high fixed costs, such as the price of maintaining fleets of jets, or fuel prices. Ticket prices are influenced not just by demand but costs which themselves are vulnerable to outside factors such as those on display this week between Iran and Israel. Chief executive of Moomoo Securities Australia Michael McCarthy said the fact that the prospectus offered no guidance after June 2025 was a 'possible red flag' from Virgin. 'If the people who run this business believe the future for Virgin is so uncertain that they cannot estimate even the next 12 months' earnings, how are investors supposed to make a decision?' In this way, the path of rival Qantas' stock functioned as a proxy for sentiment for the Australian aviation sector, including Virgin. Qantas' stock rose from about $5.78 a share on August 5, to more than $10.27 on June 20, on growing optimism for the outlook for aviation. Virgin was priced at a discount to Qantas, $2.90 a share, with the understanding that Virgin, while a competitor, remained the junior player. As June 24 approached, unwelcome clouds gathered. While markets had largely priced in the Middle East conflict, Iran and Israel began lobbing missiles at each in earnest only a week before. On Monday morning (AEST), Qatar, the home of Qatar Airways, closed its airspace in response to Iranian missile attacks, the very hub of the airline Virgin was now linked to. Emerson said the geopolitical tensions 'underscore' the advantages of being a 90 per cent domestic Australian airline. The local market had been incredibly resilient and, historically, demand had ridden right through geopolitical shocks, he said. Loading Still, Emerson has been peppered by questions about how the Middle East tensions would affect the IPO. Speaking before the stock relisted, Emerson noted: 'There's always the ability to amend the schedule down [the number of wet lease flights with Qatar] if we jointly decide that's in our interest. There's nothing in the agreement that requires us to fly all these flights forever.' When the day came, the sentiment was mixed. Headlines from the Middle East couldn't be worse, but the ASX 200 rallied on expectations that peace would prevail and oil prices fell. The Virgin IPO would be a test of the feeling around the Australian aviation industry. Was the glass half-full, or half-empty? A steady outlook or turbulence ahead? Share listed at $2.90 noon on the ASX. Then they rose. Virgin ticked up by days end to $3.23. They closed down at 2.2 per cent on Friday to $3.18. Loading A person with knowledge of the deal, said Bain was successful in part because it wasn't 'trying to sell too much' of the stock. 'They kept the shares scarce and the price was compelling.' Virgin also had a 'very clear competitor' in the form of Qantas, which also reassured investors looking to understand the metrics of the smaller airline's performance. Virgin's successful launch also signalled a market 'very open to IPOs now' which is, as one investor said, 'a relatively new thing'. Bain Capital veteran and Virgin director Mike Murphy rated the IPO the 'most complex Bain has ever done in Australia and among the most complex that even global Bain has done'. He thinks future competition with Qantas will be 'rational' but 'the Australian aviation market is extremely competitive and it is closely watched by the ACCC'. Even former Virgin chief executive Paul Scurrah called it 'a proud day for the team to see what we envisaged during the [2020] sale process come to fruition'. Asked if the IPO was the biggest undertaking of his career, Emerson said working with the team at Virgin had been 'the capstone of what has been 30 years in aviation, and I couldn't be more proud and excited about it'. One Virgin crew member with more than a decade's experience with the company noted that aviation was an 'inherently unstable industry'. Remembering back to 2020, when his former colleague Cassy Appleton posted her farewell video before Virgin essentially stopped flying, he said those videos were almost 'a form of grief'. Having said that, Virgin appeared much sounder on the day than the decade earlier when he began working for the company. 'To be completely honest,' he said, 'it is kind of surprising that we've gone from point A to point B and become relatively stable and quite profitable in such a short space of time.'
The Age
21 hours ago
- Business
- The Age
Cassy's teary farewell to passengers went viral. Now her airline is back in the game
It was a memorable moment at the start of the pandemic. In late March 2020, Cassy Appleton, Virgin Australia crew supervisor, delivered a pre-landing safety message to passengers that she appended with a farewell speech for the airline's international operation. Choking back tears, Appleton thanked customers and praised colleagues. Epitomising the fear of the widening COVID-19 pandemic, Appleton's speech quickly went viral. For Virgin Australia, the unknowns at the time were arguably more profound. Within weeks of the speech, the company – once a domestic competitor for Qantas, the only one – would be in voluntary administration, delisted from the ASX, later sold to US-based private equity group Bain Capital. On Tuesday, Virgin, reorganised, under new management, backed now by a Middle Eastern aviation behemoth, took the leap and returned to the Australian Securities Exchange, a viable, listed competitor to Qantas. Virgin has come full circle, in the process facing down reluctant regulators, unions and global uncertainty spurred by US President Donald Trump's trade wars – as well as hot wars in the Middle East. 'We're very proud of the product and service that we put out there,' chief executive Dave Emerson said. 'We provide strong competition and great value and service for Australian consumers'. Yet, the timing of Virgin's IPO only became a certainty a few months ago, after a number of conditions fell into place: the new chief executive, restored investor interest, the support of its largest union, the backing of stakeholder Qatar, Virgin's new strategy to be a simpler, more focused airline, and, ironically, the strength of Qantas' share price helping showcase domestic appetite for aviation stocks. Emerson took the role of chief executive in March, the same month the government approved Qatar Airways to take a share of Virgin and to participate in the 'wet-lease' agreement that allowed the Doha-based airline to increase the number of flights from Australia by 28 a week. The government had denied Qatar Airways' application for additional flights in 2023, citing elusive reasons of 'national interest'. Transport Minister Catherine King's inability to explain the basis of the government's rationale prompted a Senate inquiry which examined Qantas' potential influence on the government's ruling. Speaking this week before Virgin listed, Emerson reflected: '[It] was pretty difficult for us to go to market when there was uncertainty about whether that deal would be approved by the Foreign Investment Review Board. I think that that was the key trigger of us then being able to start to market the company.' Virgin's reliance on the government's approval of Qatar's participation was ironic, given the government's unwillingness to bail Virgin out during its 2020 fall. It was out of this dark period for aviation that Qantas laid off 1800 staff illegally, creating the industry backdrop from which Virgin would rise. 'It's a brutal industry, and Qantas has been a brutal player in that industry,' said Emily McMillan, national assistant secretary of the Transport Workers Union, which is the largest representative of Virgin employees. Loading The union was relieved when Virgin ended speculation and said its chief customer and digital officer, Paul Jones, who had earlier been involved in Qantas' industrial relations, would not replace outgoing boss Jayne Hrdlicka as chief executive. TWU's McMillan said: 'We're pleased that Virgin have made key choices in these last five years as they've navigated through this process to work with its workforce in a different way.' Ruling out Jones, who replaced Emerson as Virgin's chief commercial officer, paved the way for Emerson – one of the least known personalities in Australian aviation – to be named chief of the airline. Emerson was part of the Bain Capital team looking over the restructuring of the troubled airline that the US private equity group took control of in 2020. Father of four sons, a sometime reader of sci-fi (John Scalzi and Martha Wells) and author Michael Lewis, and a somewhat reluctant pickleball player, Emerson brought years of experience in aviation consulting from Bain & Company, where his predecessor Jayne Hrdlicka had once worked. Loading As the pandemic hit, Emerson and his wife had already been looking for an overseas posting. He said he had just dropped his youngest son off at university, before heading to the plane to come to Australia, a place that is the 'opposite of a hardship posting'. However, given the time, Emerson's first impression of the country was limited to the walls of a Marriott hotel room where he stayed upon COVID quarantine. Bain had named Reunion Capital as the independent adviser in 2023, which then appointed Goldman Sachs, UBS and Barrenjoey as book builders of the deal. Emerson's appointment in March signalled the start of the IPO process. Once Bain decided to launch, brokers and investors moved quickly to secure significant volumes of investor demand. On his first day on the job, Emerson met investors, as well as staff in Brisbane and Sydney, going on a tour of Virgin's front-line staff that would take him to Perth, Melbourne and Adelaide. Importantly, he met the union. 'We met with Dave Emerson on the first day of his job,' said TWU's McMillan, 'which we thought was a really positive sign of working collaboratively with the workforce.' Loading Emerson was to simplify the business, pivoting away from the complexity that helped expose it to loss before 2020. The plan was also to be focused on areas where Virgin could compete effectively. 'We want to win in the segment of the market that we've chosen to serve, the value segment,' Emerson said. That didn't mean unlimited, unchecked competition against larger rival Qantas, which helped drive Virgin towards unsustainable debt levels before 2020. Rather, Virgin would compete for premium leisure, small and medium business customers and value-minded corporate customers. 'We have a lot of respect for Qantas,' said Emerson, who notes that Qantas does a good job serving its core customer segments. 'That's one of the reasons that we chose the business model that, we thought, was built around segments that aren't as well served in their existing ... model.' Qatar Airways' participation would help. Virgin operates a simplified fleet of 100 mostly 737s domestically and in overseas destinations such as Fiji, Bali and Vanuatu. Under the 'wet-lease agreement' with Qatar, Virgin could 'carefully re-enter' long-haul travel while sidestepping the complex planning and operations it demands. (Under the deal, Qatar will provide the planes and crew for flights sold by Virgin.) From Qatar, Virgin gets commissions on flights sold, more users of its Velocity loyalty program, and, with more people flying into Australia, more traffic into Virgin's domestic lines. That's all good as long as international travel holds up, which is no certainty in a time of war in the Middle East and Donald Trump's on-again, off-again tariff announcements. Emerson said: 'The way our partnership with Qatar is structured, our economics are focused on the domestic business, and their economics are focused on the long-haul business. So even if demand didn't meet expectations, we wouldn't expect it to have a material effect'. Perceptions around the rebuilt airline mattered too. This meant convincing future investors that Virgin had changed since its days of damaging price wars with Qantas. Going into administration had wiped out the value of Virgin debt securities listed on the ASX. There was a bit of a 'hurdle to overcome how this is a different business now', said one person involved in the IPO, who described it as the 'first challenge' in taking the deal to market. But the outlook for aviation since the end of lockdowns had transformed. Demand for travel appeared limitless. Investors were highly attracted to the industry structure and saw Virgin 'with strong and stable market share and an ability to increase margins over the next couple of years'. Emerson's jammed up meeting schedule ahead of the IPO – banks, unions and company staff – left little time for interviews. Given the restrictions around what can be said before a company lists, and his sudden appointment as chief executive, there was often little Emerson could say. The air of mystery contributed to the sense of anticipation about the reception a relisted Virgin would get from the public. Loading On a recent visit to Melbourne Airport at Tullamarine, a sampling of Virgin passengers voiced sentiments that were uncannily close to Virgin's identified target market. While a number of passengers' stories began with pledges to never fly Qantas again, business travellers this masthead spoke to were generally happy with Virgin. One said Virgin appeared more 'inventive' while Qantas was 'stale'. Another bristled at Qantas' welcome-to-country announcements. Andrew Mills, who months ago spent 30 hours trying to get back to Australia from New Zealand after a Qantas cancellation, said: 'I made the decision to fly only with Virgin, and it's been pretty promising to date. 'I would say 95 per cent of the flights that I've been on since then have been on time and able to allow me to get to my destination as expected.' In fact, in May, Virgin's on-time arrivals reached 84.8 per cent while Qantas' stood at 82.5 per cent, according to the Bureau of Infrastructure and Transport Research Economics. One person with knowledge of the deal said Bain had done a 'pretty good job' of turning Virgin around, by finding a part of the market that avoids costly clashes with Qantas. Virgin 'should probably be able to earn increasing margins over time' by not, for example, competing directly for most international routes. Still, the aviation business is not an easy one to succeed at. There are high fixed costs, such as the price of maintaining fleets of jets, or fuel prices. Ticket prices are influenced not just by demand but costs which themselves are vulnerable to outside factors such as those on display this week between Iran and Israel. Chief executive of Moomoo Securities Australia Michael McCarthy said the fact that the prospectus offered no guidance after June 2025 was a 'possible red flag' from Virgin. 'If the people who run this business believe the future for Virgin is so uncertain that they cannot estimate even the next 12 months' earnings, how are investors supposed to make a decision?' In this way, the path of rival Qantas' stock functioned as a proxy for sentiment for the Australian aviation sector, including Virgin. Qantas' stock rose from about $5.78 a share on August 5, to more than $10.27 on June 20, on growing optimism for the outlook for aviation. Virgin was priced at a discount to Qantas, $2.90 a share, with the understanding that Virgin, while a competitor, remained the junior player. As June 24 approached, unwelcome clouds gathered. While markets had largely priced in the Middle East conflict, Iran and Israel began lobbing missiles at each in earnest only a week before. On Monday morning (AEST), Qatar, the home of Qatar Airways, closed its airspace in response to Iranian missile attacks, the very hub of the airline Virgin was now linked to. Emerson said the geopolitical tensions 'underscore' the advantages of being a 90 per cent domestic Australian airline. The local market had been incredibly resilient and, historically, demand had ridden right through geopolitical shocks, he said. Loading Still, Emerson has been peppered by questions about how the Middle East tensions would affect the IPO. Speaking before the stock relisted, Emerson noted: 'There's always the ability to amend the schedule down [the number of wet lease flights with Qatar] if we jointly decide that's in our interest. There's nothing in the agreement that requires us to fly all these flights forever.' When the day came, the sentiment was mixed. Headlines from the Middle East couldn't be worse, but the ASX 200 rallied on expectations that peace would prevail and oil prices fell. The Virgin IPO would be a test of the feeling around the Australian aviation industry. Was the glass half-full, or half-empty? A steady outlook or turbulence ahead? Share listed at $2.90 noon on the ASX. Then they rose. Virgin ticked up by days end to $3.23. They closed down at 2.2 per cent on Friday to $3.18. Loading A person with knowledge of the deal, said Bain was successful in part because it wasn't 'trying to sell too much' of the stock. 'They kept the shares scarce and the price was compelling.' Virgin also had a 'very clear competitor' in the form of Qantas, which also reassured investors looking to understand the metrics of the smaller airline's performance. Virgin's successful launch also signalled a market 'very open to IPOs now' which is, as one investor said, 'a relatively new thing'. Bain Capital veteran and Virgin director Mike Murphy rated the IPO the 'most complex Bain has ever done in Australia and among the most complex that even global Bain has done'. He thinks future competition with Qantas will be 'rational' but 'the Australian aviation market is extremely competitive and it is closely watched by the ACCC'. Even former Virgin chief executive Paul Scurrah called it 'a proud day for the team to see what we envisaged during the [2020] sale process come to fruition'. Asked if the IPO was the biggest undertaking of his career, Emerson said working with the team at Virgin had been 'the capstone of what has been 30 years in aviation, and I couldn't be more proud and excited about it'. One Virgin crew member with more than a decade's experience with the company noted that aviation was an 'inherently unstable industry'. Remembering back to 2020, when his former colleague Cassy Appleton posted her farewell video before Virgin essentially stopped flying, he said those videos were almost 'a form of grief'. Having said that, Virgin appeared much sounder on the day than the decade earlier when he began working for the company. 'To be completely honest,' he said, 'it is kind of surprising that we've gone from point A to point B and become relatively stable and quite profitable in such a short space of time.'
News.com.au
a day ago
- Business
- News.com.au
Criterion: Virgin's trumphant float means more IPOs should be cleared for take-off
Several IPOs are scheduled in the wake of Virgin's successful re-listing – and some have already taken off Virgin's IPO defied investor scepticism about private equity divestments Debt-oriented income fund and gold plays have dominated the small number of IPOs in 2025 With Tuesday's Virgin Australia (ASX:VGN) listing maintaining altitude, float promoters have been buoyed by the prospect of getting long-mooted IPOs up, up and away. Raising $685 million, the Virgin lift-off was admirable given the Middle East unpleasantries that threaten ski-high oil prices. They also disrupted the literal flight plans of Virgin's 23% equity partner, Qatar Airlines. And did we mention the IPO was a private equity spin-off? Investors still remember that Myer float – and not for the Jennifer Hawkins cover. Investors credited Virgin's owners for pricing the float at metrics that make the airline look cheaper than its more fancied red-tailed rival. Another theory goes that with several ASX200 plays being taken over, there hasn't been enough quality equity for domestic-focused fundies generally. An IPO revival? So far, the investor zeal looks to be contagious, although it helps to have the right vibe … such as mining for gold. In the shadow of Virgin's debut, Greatland Resources (GGP) listed strongly on Tuesday, having raised $490 million. Backed by Andrew and Nicola Forrest, Greatland owns the WA Telfer gold mine – one of the country's biggest and once the largest. NSW based gold and copper explorer Linq Minerals is due to list – takeoff time TBA – having raised $10 million from a conga line of keen institutions. Infragreen Group (IFN) shares surged 15% on Wednesday's debut. The owner of recycling and renewable projects, the infrastructure group raised $40 million. Credit where credit's due Debt-based income funds have also featured in IPOs. The Latrobe Private Credit Fund (LF1) listed yesterday, having raised $300 million in an oversubscribed offering that further tested investor interest in the burgeoning asset class. The Dominion Income Trust 1 (DN1) debuted on March 4 and the MA Credit Income Trust (MA1) followed a day later. The former is not a private credit fund, strictly peaking, as it also invests in government bonds and structured credit (including public and private debt). With the banks curtailing hybrid debt securities, Wilson Asset Management's Geoff Wilson sniffed an opportunity for income-starved retirees. Hence the late April launch of the $165 million WAM Income Maximiser (WMX), which invests in debt and equity with the promise of monthly distributions currently targeting around 6%. Spicy Mexican trade paved the way Virgin was the biggest IPO since Mexican food chain Guzman y Gomez (ASX:GYG) listed in June last year, raising $335 million. This one also faced a sceptical audience, but it proved a spicy 'taco trade' of a different kind and the shares remain well above listing price. Also one of the biggest raisings, payment processing intermediary Cuscal (ASX:CCL) is 22% to the good after listing last November. Otherwise, smaller IPOs have disappointed. Of the 29 stocks to debut in 2014, 19 are under water. Fulcrum Lithium (ASX:FUL) earns the booby prize with an 85% decline. Rare earths play Axel REE (ASX:AXL) is 60% underwater. In the pipeline The chunkiest IPO in the offing is that of Gemlife Communities Group, which develops and operates communities for the over 55s. The IPO raised more than $750 million, with some of the funds earmarked for the $270 million purchase of the Aliria Group. Gemlife is due to list next Thursday. The Step Change Holdings IPO closed yesterday, having raised $14 million. Step Change provides SAP (resource planning) software to the resources sector. In an EOFY IPO finale, wound management Tetratherix lists next Monday. The backers aimed for $35 million, but were happy to pocket $25 million. Riding in the slipstream of Virgin's success alone won't ensure IPO success. Proponents need a solid business model, realistic pricing and a dollop of the 'wow' factor. Given Virgin's status as an entrenched duopolist, there was always going to be a buzz around the airline's return to public ownership. Richard Branson, the airline's former owner and consummate salesman, would be proud.
Yahoo
a day ago
- Business
- Yahoo
Bain Capital on Virgin Australia Post-IPO Outlook
Barnaby Lyons, Global Head of Special Situations at Bain Capital, discusses his outlook for Virgin Australia's business, after the airline re-listed on the ASX in a $440 million IPO. He also speaks about the broader outlook for APAC private market activities. He speaks with Haidi Stroud Watts on "Bloomberg: The Asia Trade". Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data
