Virgin Australia’s return to the Australian Stock Exchange (ASX) is another important milestone for the airline whose tie-up with Qatar Airways could lead to a return to main city flying across the Tasman, one analyst says.
VA pulled out of New Zealand’s main centres when it collapsed into administration in 2020 but with 25% shareholder QR and an AUD2.3 billion valuation in an initial public offering detailed this week, the airline is in a strong position to grow. VA will this month use QR planes and crew to fly from Australia to Doha as part of the close relationship. Eagle Aviaton md Simon Russell says QR will use VA to serve Tasman routes, initially Queenstown where it already flies, and then potentially Christchurch and Wellington. Pacific routes could also be added. The objective would be to use VA as a feeder to Australian gateways for the partnership’s version of the high yield ‘Kangaroo Route’ from Australasia to Europe over Doha, says Russell.
. . . Air NZ Tie-up
Pre-pandemic, VA was important in keeping a lid on transtasman airfares with about 18% market share when it flew between main cities. Last year it started a code share with Air New Zealand which critics say has dented competition and pushed up prices.
. . . The Big Bonus
As part of its return to the share market, close to 8000 VA staff are in line for an AUD3000 ‘take-off grant’ when the airline returns to the ASX. Executives with a stake are in line for much more with former boss Jayne Hrdlicka set to make what has been described as ‘life changing’ money in the listing. The airline has announced it will return to the ASX soon with an AUD685 initial public offering and an AUD2.90 share price, giving the company the AUD2.3 billion valuation.
. . . Earnings Take Off
Josh Gilbert, of market analyst investment platform eToro, says VA’s turnaround since its 2020 administration has been solid. Under private equity investor Bain, it had streamlined operations, focusing on profitable domestic routes, and achieved record underlying earnings of AUD439 million in the latest half-year. “Essentially, it’s a very different airline than it was in 2020 and it is far more attractive to investors.’’ VA has been asked about its plans for the Tasman.
