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Virgin Australia is officially back on the ASX after five years, with the airline’s shares jumping shortly after its relisting ceremony at midday on Tuesday.
Australia’s second-largest domestic airline group was listed as VGN at $2.90 per share, with the price quickly rising to $3.13 per share within the first 30 minutes. This represented a market capitalisation of around $2.3 billion, with 30.2 per cent of shares put up for sale.
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The quick jump in price was due in part to high interest from investors, with demand outpacing the available shares on offer.
“Our listing reflects the remarkable work undertaken over the past five years to transform the airline and position it for long-term success,” chair Peter Warne said in a press release.
“It is great news not just for our people, but for travellers who rely on Virgin Australia being a strong, resilient and competitive airline.”
Speaking to media after the bell-ringing ceremony, chief executive Dave Emerson said it was a “great sign” that the carrier did not need to raise any money in the float, which was instead focused on generating a return for its existing backers.
“It means that we have a very strong balance sheet. We didn’t need any additional capital. In fact, we’re generating strong returns, and we’re able to fund our fleet growth without needing new equity, and so that’s really a good sign,” he said.
“I think that’s the core point, is that we [have] a really strong business model, still delivering great returns today. We have a strong balance sheet, so we feel very well set up for the future.”
According to Emerson, Virgin today is “different in almost every way” from the airline that went into voluntary administration in 2020, and customer demand is high.
“We’re very now focused on serving the domestic Australia market and serving the customers we can win, serving the small business, serving the value corporate, serving the premium leisure segment, those people who really value the product that we put out there,” he said.
“We think that’s going to be very successful going forward, and you can already see it in our numbers. We’ve changed the whole business model, but what hasn’t changed is our focus on delivering great service for our customers.
“That’s the key bit that stayed the same, as we still deliver great service, we still care about engaging with our customers and making sure they have wonderful flying experiences. And so those are the things that we’ve kept.
“I think we continue to see very full planes, and we feel very good about our forward bookings and where we’re going from here.”
The IPO follows the launch of Virgin’s wet-leased flights to Doha with Qatar Airways, the first time it has flown long-haul international services since before its collapse.
