Virgin Atlantic Eyes Potential Stock Market Listing

Virgin Atlantic is reportedly looking at a stock market listing in the next few months. The long-haul-only airline has been battered by COVID-19 and is undergoing a major restructuring following a £1.2bn bailout. However, as investors see a strong chance of international travel bouncing back soon, the Virgin Group and Delta-owned carrier are eying a listing. Let’s find out more.

Virgin Atlantic, Airbus A350, Caribbean
Some of Virgin’s most lucrative routes remain low on demand due to current travel restrictions. Photo: Vincenzo Pace | Simple Flying

Big swing

Since its inception in 1984, Virgin Atlantic has been privately held by Sir Richard Branson’s Virgin Group and various partners. However, as COVID-19 profoundly impacts the airline, it’s become clear that significant changes are required. Last July, the carrier firmed up a £1.2 billion ($1.65 billion) bailout to ensure it can survive the crisis.

However, fast forward exactly a year, and the airline is looking more optimistic. According to the Financial Times, Virgin Atlantic is looking at a stock listing in London by as soon as this autumn. With international travel starting to bounce back, Virgin is hoping to cash in on investor confidence in the market recovery. The millions from the listing will help the carrier boost cash reserves during what remains a shaky time amid COVID spikes globally.

Virgin Atlantic Airbus A350-1041 G-VLUX
While the listing would decrease Branson and Delta’s stake in the airline, it will also bring in tens, or hundreds, or millions, in funding. Photo: Vincenzo Pace | Simple Flying | Edited by: Alvin Man

Currently, Virgin Group owns 51% of its namesake airline, while Delta Air Lines own the other 49%. Both companies have raised hundreds of millions in the last year to help the carrier and could be looking to make the airline more self-sufficient in the future.

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Bullish

Amid reports of the listing, one detail catches the eyes: the timeline. An autumn listing would mean less than three months remain before the carrier’s first shares hit the market and Sir Richard Branson rings the bell. It is also well ahead of anything close to a full recovery for Virgin, which is still losing millions every month amid route closures.

This has led to warnings that the airline may need to wait longer before its stock market gambit. With one half of the US-UK travel corridor still shut (Britons cannot fly to the US currently) and other destinations also struggling, Virgin’s business outlook remains challenging for now.

Richard Branson Virgin Atlantic Little Red
Could Richard Branson’s recent success in the markets with Virgin Galactic buoy another listing too? Photo: Getty Images

However, with a full recovery still at least one year away, Virgin is pushing ahead with preliminary plans. Citi and Barclays will be the advisors for the potential sale. Its success will depend wholly on if investors see a full recovery in the near future and are willing to bet big early on in Virgin.

While other airline stocks in Europe, including IAG (the owner of British Airways and Iberia) and easyJet, continue to struggle below pre-pandemic levels, Virgin’s decision might seem surprising. However, a combination of Sir Richard Branson’s charisma and the airline’s potential might just be enough to get buyers onboard.

What do you think about Virgin Atlantic’s potential market listing? Let us know in the comments!

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