The owners of Virgin Australia, Bain Capital, a private equity firm based in the United States, have attempted to quell rumours that they are planning to sell the company shortly. Bain has been said to be aiming to sell down or sell out quickly once Australian flight conditions stabilise over the past six months. The airline's Australian Chief was recently forced to issue a statement in response to the rumours. Then, last week, Virgin Australia called in the big artillery: the Managing Director of Bain Capital.
According to a report in The Australian newspaper, Boston-based Bain MD Ryan Cotton visited Virgin Australia's Brisbane headquarters last week and gave a virtual town hall-style address to the airline's 6,000 employees. He attempted to convince employees that Bain Capital will continue to fly with Virgin Australia for the long haul.
After the airline went into voluntary liquidation in 2020, Bain acquired Virgin Australia. Virgin Australia was once publicly traded, although a group of large airlines owned the majority of the equity. Those airlines made a killing when Bain bought VA for a bargain and turned it into a private company.
Local industry analysts began to wonder how long Bain would maintain Virgin Australia; after all, this was a private equity firm with a strong profit ethic and a track record of flipping investments. However, the airline spent the rest of 2020 and much of 2021 in the doldrums due to COVID-related travel restrictions and border closures in Australia, making it an unappealing acquisition.
Late last year, when Australia began to loosen its restrictions, domestic airlines saw a resurgence, and whispers of a Bain IPO resurfaced. Jayne Hrdlicka, the CEO of Virgin Australia, tried to put an end to the speculations right before Christmas.
Mr Cotton then brought it up again last week. Mr Cotton did not indicate in his remarks to employees that Bain would never sell down or sell out their stake, but he did say that Bain was dedicated to reconstructing "a phenomenal airline and to setting it up for phenomenal long-term success" - implying that this would take as long as it took.
