Analysis: Despite our dependency on flying, aviation is a notoriously difficult industry to make profitable, and many local airlines, including Virgin itself, have previously perished in their attempt to do so.
in 2020 after a stint in administration, Virgin has been pressured to meet the often-conflicting demands of its passengers, prospective shareholders, staff, and the rest of the aviation supply chain. Above all, Bain is charged with ensuring Virgin is an effective competitor to Qantas.
Virgin’s newest aircraft, nicknamed Monkey Mia, is the first of its Boeing 737 Max-8 fleet to arrive in Australia. Bain has committed to retaining a large stake of the airline business in the event of a listing, keen to distance its potential float from former private equity horror listings including Myer and Dick Smith.
“Everything has a price. If the discount is large enough, there will be interest to back Virgin regardless of whether investors accept Qantas’ share price has peaked. If I were them, I would wait until it’s less bearish, but that could be a multi-year wait,” Liu said. The Australian competition watchdog has been scathing of the state of competition in the airline industry. Some Virgin insiders protest at the accusations it’s part of a duopoly, preferring instead to frame their airline as the bolshie underdog. Whichever characterisation is adopted, robust competition in any industry protects consumers.
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