Virgin Australia returns to sharemarket with a bang
Virgin Australia has returned to the sharemarket after a five-year hiatus with a massive $685m initial public offering on Wednesday, and it could influence the future health of the Australian economy.
In the biggest IPO of the year, the Bain Capital-owned airline has decided to return to the ASX amid a rise in domestic tourism and spending.
The offer will almost halve Bain's stake in the airline from about 70 per cent to 39.4 per cent.
Qatar Airlines, which recently invested in Virgin, will reportedly keep its 23 per cent holding.
If successful, Virgin's listing in the market will be seen as a sign of a bright future for the Australian economy, as investors signpost the potential for the nation's consumer spending to recover.
If it fails, it could point to the opposite.
So far, all signs point to a successful IPO, as domestic travel demand recovers and the two recent RBA rate cuts ease the pressure on Australian households.
Qantas has been trading at a record high, and the ASX itself has been overwhelmingly up despite swings.
5.1 million passengers were on domestic commercial flights in Australia as of March, a figure sightly below the same time last year but more than four times the numbers in mid-2021.
Despite Virgin's voluntary administration in 2020 following Covid-19 travel restrictions, after which it was acquired by US private equity company Bain, it now corners 34.4 per cent of the domestic market share as of March 2025.
It is not lagging much behind Qantas, which holds 37.5 per cent, according to the Australian Competition and Consumer Commission.
The death of other budget airlines such as Bonza and Rex has only boosted these two major players.
Virgin is also planning to resume long-haul international flights made possible by its partnership with Qatar.
The airline is conducting its IPO using a front-end book-building method, where investor bids are submitted before the prospectus receives approval from Australian regulators.
According to the term sheet, institutional investors were able to their bids up to Thursday, with the stock expected to begin trading on June 24.
Virgin's IPO will be the largest in Australia following the DigiCo Infrastructure REIT launch that raised $2bn in December before a 30 per cent downturn in share price.
Experts say the Virgin IPO could offer investors a unique entrance into the Australian airline market, but it has its own risks.
'Virgin Australia's planned return to the ASX via a $A685m initial public offering is the first major IPO of 2025, and one to watch closely,' eToro market analyst Josh Gilbert said.
'The IPO, priced at $A2.90 per share, gives the airline a market cap of $A2.bn. It follows the on-and-off IPO over the last two years when the airline sector has moved from strength to strength, with companies around the world announcing record profits and seeing shares rally.
'Under Bain's direction, Virgin Australia has streamlined operations, focusing on profitable domestic routes, and achieved record underlying earnings of $A439m 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. Having only one real competitor in the landscape, Qantas, makes the offer uniquely appealing.'
However, the investment could also be a major risk.
'Investors may view Virgin's IPO as an opportunity to gain exposure to Australia's duopoly airline market at a compelling valuation that will trade at a discount to Qantas,' Mr Gilbert said.
'Although the airline sector has had a great few years, investors should be mindful of its razor-thin margins and cyclical risks, particularly if demand slows amid slowing consumer spending.'
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Sky News AU
an hour ago
- Sky News AU
Australia should not ‘relinquish' biosecurity standards for US
Nationals Leader David Littleproud claims Australia does not 'fear competition' amid the trade talks on beef with US President Donald Trump. 'We don't fear the fact of us competing with the US beef that's already coming into Australian markets,' Mr Littleproud told Sky News Australia. 'What we do fear is a drop in biosecurity standards that would pose a biosecurity risk that could damage our herd, cost Australian farmers billions. 'We have the best biosecurity in the world … we shouldn't relinquish that to anybody.'
The Advertiser
an hour ago
- The Advertiser
Australian detained in Iraq released after four years
An Australian man detained in an Iraqi prison for nearly four years has been released on bail. Engineer Robert Pether was granted conditional release after being detained on misrepresentation and fraud charges. Mr Pether was arrested following a dispute with the Iraqi government and his employer, a consulting firm working on headquarters for the country's central bank. He was sentenced in 2021 to five years in prison and fined millions of dollars. A United Nations report on arbitrary detention detailed allegations that Mr Pether was subject to extreme cold, humiliation, threats of death and forms of psychological abuse, including being shown a torture room. Foreign Minister Penny Wong welcomed Mr Pether's release. "I know the personal toll Mr Pether's detention has taken on him and his family and hope this news brings a measure of relief after years of distress," she said in a statement. "While Mr Pether remains subject to legal proceedings in Iraq, this is a positive development and follows persistent Australian government advocacy over many years. "His case has been raised with Iraqi authorities over 200 times, including at the highest level by the prime minister and myself." Mr Pether wrote a letter in 2024 expressing concern for his health. Senator Wong said officials would continue to press the case for the Australian in Iraq. "We will continue to support Mr Pether and his family and to advocate for Mr Pether's interests and wellbeing," she said. "I want to thank Australian officials for their tireless work on Mr Pether's case, including Australia's special envoy who travelled to Iraq in recent weeks to negotiate for this outcome." An Australian man detained in an Iraqi prison for nearly four years has been released on bail. Engineer Robert Pether was granted conditional release after being detained on misrepresentation and fraud charges. Mr Pether was arrested following a dispute with the Iraqi government and his employer, a consulting firm working on headquarters for the country's central bank. He was sentenced in 2021 to five years in prison and fined millions of dollars. A United Nations report on arbitrary detention detailed allegations that Mr Pether was subject to extreme cold, humiliation, threats of death and forms of psychological abuse, including being shown a torture room. Foreign Minister Penny Wong welcomed Mr Pether's release. "I know the personal toll Mr Pether's detention has taken on him and his family and hope this news brings a measure of relief after years of distress," she said in a statement. "While Mr Pether remains subject to legal proceedings in Iraq, this is a positive development and follows persistent Australian government advocacy over many years. "His case has been raised with Iraqi authorities over 200 times, including at the highest level by the prime minister and myself." Mr Pether wrote a letter in 2024 expressing concern for his health. Senator Wong said officials would continue to press the case for the Australian in Iraq. "We will continue to support Mr Pether and his family and to advocate for Mr Pether's interests and wellbeing," she said. "I want to thank Australian officials for their tireless work on Mr Pether's case, including Australia's special envoy who travelled to Iraq in recent weeks to negotiate for this outcome." An Australian man detained in an Iraqi prison for nearly four years has been released on bail. Engineer Robert Pether was granted conditional release after being detained on misrepresentation and fraud charges. Mr Pether was arrested following a dispute with the Iraqi government and his employer, a consulting firm working on headquarters for the country's central bank. He was sentenced in 2021 to five years in prison and fined millions of dollars. A United Nations report on arbitrary detention detailed allegations that Mr Pether was subject to extreme cold, humiliation, threats of death and forms of psychological abuse, including being shown a torture room. Foreign Minister Penny Wong welcomed Mr Pether's release. "I know the personal toll Mr Pether's detention has taken on him and his family and hope this news brings a measure of relief after years of distress," she said in a statement. "While Mr Pether remains subject to legal proceedings in Iraq, this is a positive development and follows persistent Australian government advocacy over many years. "His case has been raised with Iraqi authorities over 200 times, including at the highest level by the prime minister and myself." Mr Pether wrote a letter in 2024 expressing concern for his health. Senator Wong said officials would continue to press the case for the Australian in Iraq. "We will continue to support Mr Pether and his family and to advocate for Mr Pether's interests and wellbeing," she said. "I want to thank Australian officials for their tireless work on Mr Pether's case, including Australia's special envoy who travelled to Iraq in recent weeks to negotiate for this outcome." An Australian man detained in an Iraqi prison for nearly four years has been released on bail. Engineer Robert Pether was granted conditional release after being detained on misrepresentation and fraud charges. Mr Pether was arrested following a dispute with the Iraqi government and his employer, a consulting firm working on headquarters for the country's central bank. He was sentenced in 2021 to five years in prison and fined millions of dollars. A United Nations report on arbitrary detention detailed allegations that Mr Pether was subject to extreme cold, humiliation, threats of death and forms of psychological abuse, including being shown a torture room. Foreign Minister Penny Wong welcomed Mr Pether's release. "I know the personal toll Mr Pether's detention has taken on him and his family and hope this news brings a measure of relief after years of distress," she said in a statement. "While Mr Pether remains subject to legal proceedings in Iraq, this is a positive development and follows persistent Australian government advocacy over many years. "His case has been raised with Iraqi authorities over 200 times, including at the highest level by the prime minister and myself." Mr Pether wrote a letter in 2024 expressing concern for his health. Senator Wong said officials would continue to press the case for the Australian in Iraq. "We will continue to support Mr Pether and his family and to advocate for Mr Pether's interests and wellbeing," she said. "I want to thank Australian officials for their tireless work on Mr Pether's case, including Australia's special envoy who travelled to Iraq in recent weeks to negotiate for this outcome."
The Advertiser
an hour ago
- The Advertiser
Mal's Mission: How Meninga plans to poke the Bears
After unveiling Mal Meninga as the Perth Bears' inaugural head coach, the club's chief executive says criticism of the NRL's start-up franchise is proof they are on the right track to winning new supporters in the AFL-made West. At a press conference at League Central in Sydney on Friday, Meninga signed a three-year contract with the Bears, who will enter the NRL in 2027. It marks the 64-year-old's first foray into club coaching since he left the Canberra Raiders in 2001. Meninga will be 69 by the time his contract expires. The Immortal, who has enjoyed a decorated representative coaching career in charge of Queensland and Australia, will relinquish his role with the Kangaroos ahead of this year's Ashes series to help the Bears build a roster to be competitive in a little over 18 months time. "This is bigger than me," Meninga said. "This new pioneering venture over to WA and the opportunity to be involved in the growth of the game, to grow a club the Perth Bears is too good to refuse. "I feel very honoured, very nervous, and I think it's a huge responsibility." The Bears can talk to off-contract players come November 1, but their hardest challenge may be winning over fans, sponsors and a media who are already heavily invested in the AFL. "Mal is an Immortal of the NRL, he is also an Immortal of our national sporting landscape, Mal is part of the Australian identity and we're honoured he's taken this opportunity," said club chief executive Anthony De Ceglie. "We've gone from one Bear in me, to two Bears in Mal, we've doubled our staff overnight. "It's small steps, we need to listen to the legacy of the North Sydney Bears and the fans in WA who have a proud tradition and who have kept the candle burning and we need to marry those two things together to make this a huge success." A former high-ranking executive at Seven West Media - the company which owns the AFL broadcast rights - De Ceglie knows the NRL's 18th side has work to do. Already the local Seven West-owned newspaper The West Australian has been critical of the venture which has been backed by WA State government cash. "Normally if you're doing something right, you have a few critics along the way," De Ceglie said. "I've been totally blown away by the amount of messages of people who want to get involved in the Perth Bears … I'm very optimistic this will be a huge success. "It'll be up to the Perth Bears to earn the respect of the newspaper. "If we're a success on the field, and if we're a success off the field, then we should be in those sports pages. "If we're not, the only people missing out are the readers of the newspaper." Meninga is yet to finalise his coaching staff nor a recruitment team who can help him bring the Perth roster together with a relatively short lead-in time. When the Redcliffe-based Dolphins entered the NRL in 2023 they missed out on several big-name targets in the recruitment space. But their squad - which won nine of their 24 games in their inaugural season - earned the respect of rival clubs for their effort and determination. "I don't think we'll have too many worries about talking to players and managers about the opportunity to come play in Perth," Meninga said. "We've got a story to tell. We have to understand what we're trying to achieve and that's my job initially to get the right people and resources around us to help understand what that story is." After unveiling Mal Meninga as the Perth Bears' inaugural head coach, the club's chief executive says criticism of the NRL's start-up franchise is proof they are on the right track to winning new supporters in the AFL-made West. At a press conference at League Central in Sydney on Friday, Meninga signed a three-year contract with the Bears, who will enter the NRL in 2027. It marks the 64-year-old's first foray into club coaching since he left the Canberra Raiders in 2001. Meninga will be 69 by the time his contract expires. The Immortal, who has enjoyed a decorated representative coaching career in charge of Queensland and Australia, will relinquish his role with the Kangaroos ahead of this year's Ashes series to help the Bears build a roster to be competitive in a little over 18 months time. "This is bigger than me," Meninga said. "This new pioneering venture over to WA and the opportunity to be involved in the growth of the game, to grow a club the Perth Bears is too good to refuse. "I feel very honoured, very nervous, and I think it's a huge responsibility." The Bears can talk to off-contract players come November 1, but their hardest challenge may be winning over fans, sponsors and a media who are already heavily invested in the AFL. "Mal is an Immortal of the NRL, he is also an Immortal of our national sporting landscape, Mal is part of the Australian identity and we're honoured he's taken this opportunity," said club chief executive Anthony De Ceglie. "We've gone from one Bear in me, to two Bears in Mal, we've doubled our staff overnight. "It's small steps, we need to listen to the legacy of the North Sydney Bears and the fans in WA who have a proud tradition and who have kept the candle burning and we need to marry those two things together to make this a huge success." A former high-ranking executive at Seven West Media - the company which owns the AFL broadcast rights - De Ceglie knows the NRL's 18th side has work to do. Already the local Seven West-owned newspaper The West Australian has been critical of the venture which has been backed by WA State government cash. "Normally if you're doing something right, you have a few critics along the way," De Ceglie said. "I've been totally blown away by the amount of messages of people who want to get involved in the Perth Bears … I'm very optimistic this will be a huge success. "It'll be up to the Perth Bears to earn the respect of the newspaper. "If we're a success on the field, and if we're a success off the field, then we should be in those sports pages. "If we're not, the only people missing out are the readers of the newspaper." Meninga is yet to finalise his coaching staff nor a recruitment team who can help him bring the Perth roster together with a relatively short lead-in time. When the Redcliffe-based Dolphins entered the NRL in 2023 they missed out on several big-name targets in the recruitment space. But their squad - which won nine of their 24 games in their inaugural season - earned the respect of rival clubs for their effort and determination. "I don't think we'll have too many worries about talking to players and managers about the opportunity to come play in Perth," Meninga said. "We've got a story to tell. We have to understand what we're trying to achieve and that's my job initially to get the right people and resources around us to help understand what that story is." After unveiling Mal Meninga as the Perth Bears' inaugural head coach, the club's chief executive says criticism of the NRL's start-up franchise is proof they are on the right track to winning new supporters in the AFL-made West. At a press conference at League Central in Sydney on Friday, Meninga signed a three-year contract with the Bears, who will enter the NRL in 2027. It marks the 64-year-old's first foray into club coaching since he left the Canberra Raiders in 2001. Meninga will be 69 by the time his contract expires. The Immortal, who has enjoyed a decorated representative coaching career in charge of Queensland and Australia, will relinquish his role with the Kangaroos ahead of this year's Ashes series to help the Bears build a roster to be competitive in a little over 18 months time. "This is bigger than me," Meninga said. "This new pioneering venture over to WA and the opportunity to be involved in the growth of the game, to grow a club the Perth Bears is too good to refuse. "I feel very honoured, very nervous, and I think it's a huge responsibility." The Bears can talk to off-contract players come November 1, but their hardest challenge may be winning over fans, sponsors and a media who are already heavily invested in the AFL. "Mal is an Immortal of the NRL, he is also an Immortal of our national sporting landscape, Mal is part of the Australian identity and we're honoured he's taken this opportunity," said club chief executive Anthony De Ceglie. "We've gone from one Bear in me, to two Bears in Mal, we've doubled our staff overnight. "It's small steps, we need to listen to the legacy of the North Sydney Bears and the fans in WA who have a proud tradition and who have kept the candle burning and we need to marry those two things together to make this a huge success." A former high-ranking executive at Seven West Media - the company which owns the AFL broadcast rights - De Ceglie knows the NRL's 18th side has work to do. Already the local Seven West-owned newspaper The West Australian has been critical of the venture which has been backed by WA State government cash. "Normally if you're doing something right, you have a few critics along the way," De Ceglie said. "I've been totally blown away by the amount of messages of people who want to get involved in the Perth Bears … I'm very optimistic this will be a huge success. "It'll be up to the Perth Bears to earn the respect of the newspaper. "If we're a success on the field, and if we're a success off the field, then we should be in those sports pages. "If we're not, the only people missing out are the readers of the newspaper." Meninga is yet to finalise his coaching staff nor a recruitment team who can help him bring the Perth roster together with a relatively short lead-in time. When the Redcliffe-based Dolphins entered the NRL in 2023 they missed out on several big-name targets in the recruitment space. But their squad - which won nine of their 24 games in their inaugural season - earned the respect of rival clubs for their effort and determination. "I don't think we'll have too many worries about talking to players and managers about the opportunity to come play in Perth," Meninga said. "We've got a story to tell. We have to understand what we're trying to achieve and that's my job initially to get the right people and resources around us to help understand what that story is."
