Speculation About Possible Virgin Atlantic IPO Takes Off

Published on

Virgin Atlantic is reportedly in talks with institutional investors about floating on the London Stock Exchange.

Get Our Activist Investing Case Study!

Get The Full Activist Investing Study In PDF

Q2 2021 hedge fund letters, conferences and more

The airline is currently 51% owned by Richard Branston’s Virgin Group, with the remainder held by Delta Airlines.

Virgin Atlantic Offering On The LSE

Richard Branson isn’t known for making small conservative moves, 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.

The business is in serious need of cash and selling shares is one way to fill the coffers. 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.

Ultimately, this listing looks like a bit of a hail-Mary from Branson, who’s firm recently lent the airline £100m to help it through the tough times. Now isn’t a great time to be an airline, particularly one that relies on long-haul. So far reports suggest that institutional investors privy to the details have had a “positive” reaction, but we think the wider market might be less forgiving.“

Article by Laura Hoy, Equity Analyst at Hargreaves Lansdown

About Hargreaves Lansdown

Over 1.6 million clients trust us with £132.9 billion (as at 30 April 2021), making us the UK’s largest digital wealth management service. More than 98% of client activity is done through our digital channels and over 600,000 access our mobile app each month.