Virgin Australia, under Bain Capital’s ownership, announced on Tuesday that it has achieved a significant milestone by returning to profitability for the first time in 11 years during fiscal 2023. This achievement is attributed to a strong rebound in travel demand following the impact of the COVID-19 pandemic.
For the full fiscal year ending on June 30, 2023, the airline reported a net profit after tax of A$129 million ($82.93 million), marking a remarkable turnaround from the A$565.5 million loss incurred in 2022.
Bain Capital, a U.S. private equity firm, has set its sights on listing Virgin Australia on the Australian Securities Exchange next month, aiming to raise A$1 billion. If successful, this listing would become the most significant new share sale since GQG Partners raised A$1.18 billion in October 2021.
In January, Bain Capital expressed its intent to explore the re-listing of Virgin Australia, which it had acquired for A$3.5 billion in 2020, including liabilities. At the time of the acquisition, Virgin Australia had faced financial challenges and was placed in voluntary administration, akin to Chapter 11 bankruptcy in the U.S.
Virgin Australia’s financial health has seen substantial improvements, as stated by CFO Race Strauss. The airline now boasts a stronger balance sheet and has made significant strides in reducing its cost base, setting it on a more sustainable path for the future. Group revenue has also more than doubled, reaching A$5 billion.
Strauss further emphasized the airline’s commitment to managing cost pressures and enhancing its performance through future transformation initiatives.
The airline industry has witnessed a resurgence in profits in recent months as travel returned to pre-pandemic levels following the severe disruptions caused by COVID-19 in early 2020.Virgin Australia is in a favorable capital position, with total debt, including leases, amounting to A$2.3 billion and over A$1 billion in cash reserves on its balance sheet. This solid financial footing positions the airline well for future growth and stability.
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