Virgin held talks with City investors over the weekend
Reports are circulating that Virgin Atlantic is in talks with institutional investors over the possibility of a float on the London Stock Exchange.
Having first launched in 1984, Virgin Atlantic could be set to earn £160m as it positions itself for an IPO.
At present, the airline is 51% owned by Richard Branston’s Virgin Group, while the remainder is held by Delta Airlines.
Sky reported that Virgin held talks with City investors over the weekend which were well received.
If discussions go smoothly then shares could be put up for sale as early as the autumn.
“Richard Branson isn’t known for making small conservative moves, said Laura Hoy, Equity Analyst at Hargreaves Lansdown, so speculation about a Virgin Atlantic offering on the London Stock Exchange shouldn’t be shocking. Like all its peers, the airline’s been battered by the pandemic—posting a £659m loss last year.”
Therefore Virgin Atlantic could do with some additional cash to support its balance sheet.
“This is a bit of a strange time to be selling airline shares, though. The sector has been beaten down and pandemic-related uncertainty still lingers. That’s particularly true for long-haul airlines that will be last to see traffic recover. British Airways owner IAG noted that it doesn’t expect to see passenger numbers rise to pre-pandemic levels until 2023 at the earliest,” Hoy added.
A question mark remains over the outlook for the air travel industry. Fully vaccinated Americans are able to travel to Britain without needing to quarantine, however, Brits cannot do the same in the opposite direction.
“The pitch to investors will clearly be the timing of the return to normalised demand and business traffic, with this challenged by concerns over the longevity of government-imposed restrictions,” analysts at Goodbody said in a note. “That debate will be central if the listing is launched as early as the autumn.”
Another Richard Brnason company, Virgin Galactic, put ticket sales for its space flights at a starting price of $450,000 a seat recently.
It follows the news that the company completed its first fully crewed flight to the edge of space last month.