Virgin Atlantic IPO: everything you need to know about Virgin Atlantic

Virgin Atlantic has been relatively quiet since its IPO was first rumoured in 2021. Find out everything we know about the airline’s listing plans.

What do we know about the Virgin Atlantic IPO?

News of a Virgin Atlantic initial public offering (IPO) first came about in August 2021. The company was said to be in talks with institutional investors about floating on the London Stock Exchange by the end of the year. Although Virgin Atlantic representatives declined to comment on the rumours, it was said that Citi and Barclays bankers were appointed to lead the listing.

The move would see Sir Richard Branson surrender his position as majority shareholder.

However, as the UK fell further behind the US and EU in terms of economic recovery from Covid-19, the IPO was stalled. The last firm report was that the IPO would be taking place in 2022, as Virgin Atlantic planned instead to focus on rebuilding its transatlantic business.

As we now know, 2022 was a dire year for listings. The market stalled, and very few companies that intended to float made it to the markets. Most companies planning 2022 IPOs are now pegged to list in 2023 instead. Virgin Atlantic has yet to renew its IPO plans publicly.

Whenever the listing happens, it will mark the first time that Virgin Atlantic shares will be available to the public – putting the airline directly against other publicly traded firms like British Airways (IAG), American Airlines and Cathay Pacific.

Find out more about trading IPOs with City Index

 

How much is Virgin Atlantic worth?

Virgin Atlantic’s total assets were worth around £3.1 billion in 2020. Until the company officially files, it’s difficult to estimate a market capitalisation.

The IPO was originally estimated to earn the company net £160 million but listing sizes have shrunk considerably over the last two years. When more information is made public about the IPO, it’s likely this will be smaller.

Virgin’s other public subsidiary, the spaceflight company Virgin Galactic, is worth $1.42 billion.

 

How to trade Virgin Atlantic stock

The only Virgin Group subsidiary that is currently public is Virgin Galactic, which went public via a SPAC deal in 2019.

When Virgin Atlantic lists, you’ll be able to trade its shares in the same way you would any other stock on the market – going long if you believe it will rise in value, and short if you think it will fall.

To get started, just:

1. Open a City Index account, or log in if you’re already a customer
2. Search for the company you want to trade in our award-winning platform
3. Choose your position and size, and your stop and limit levels
4. Place the trade

Alternatively, you can practise trading consumer staple stocks risk free in our demo account or learn more about how to trade an IPO

 

What does Virgin Atlantic do?

Virgin Atlantic is a British airline that owns and operates a network of transportation services, providing domestic, international and cargo flights, as well as holiday packages and other services.

The company is based in the UK but operates across North America, Africa, the Middle East, Asia and the Caribbean. It’s mainly reliant on transatlantic flights from the UK to the US.

Virgin Atlantic uses a mixed fleet of Boeing and Airbus planes – so any news impacting either of those manufacturers will influence Virgin Atlantic too.

 

How does Virgin Atlantic make money?

Virgin Atlantic makes money through its passenger flights and cargo arm.

The passenger segment of the business brought in revenue of £410 million for 2021, which was a mere 20% of the revenue it saw pre-pandemic (2019). Virgin Atlantic reported that it had increased its passenger capacity by 9% in 2021 but actual passenger numbers remained flat year-on-year, and well below pre-pandemic levels.

Meanwhile, Virgin Atlantic’s cargo segment recorded record revenues of £448 million – 40% up from 2020 and 200% up from 2019. The firm made the smart move of positioning itself as a key player in shipping personal protective equipment (PPE) and testing kits from China to the UK, which helped boost total revenues for the business.

 

Is Virgin Atlantic profitable?

Virgin Atlantic doesn’t expect to return to profitability until 2023. The company experienced huge losses amid Covid-19, more than most airlines, due to its reliance on transatlantic flights. The company filed for bankruptcy in 2020.

But fresh funding from Virgin Group and Delta Air Lines (who invested £204 million and £196 million respectively) meant the firm could rebuild itself just in time for the reopening of international travel.

Virgin has cut more than £300 million in annual costs by almost halving its headcount, removing operations from Gatwick to focus on other major airports and retiring its Boeing 747 jumbo jets.

In April 2022, Virgin Atlantic reported that it had narrowed its full-year losses to £378 million in 2021 compared to $486 million in 2020. This came as revenue increased, from £60 million in 2020 to £928 million in 2021.

Virgin Atlantic expected FY2022 to bring even narrower losses, while FY2023 would bring profits, as passenger demand and international travel return. Although, it’s worth bearing in mind that this outlook was given before the cost-of-living crisis hit UK travellers.

 

Who are Virgin Atlantic’s competitors?

Virgin Atlantic’s main competitors are British Airways, American Airlines, United Airlines and Norwegian, as well as Virgin Atlantic’s shareholder Delta Airlines.

 

Who owns Virgin Atlantic?

Virgin Atlantic is majority owned by Sir Richard Branson, owner and founder of the entire Virgin Group. He owns 51% of Virgin Atlantic shares, while the other 49% are owned by Delta Airlines.  

 

Virgin Atlantic’s management team

Virgin Atlantic’s management team are:

• Shai Weiss – Chief Executive Officer
• Estelle Hollingsworth – Chief People Officer
• Siobhan Fitzpatrick – Chief Digital & Marketing Officer
• Corneel Koster – Chief Customer & Operating Officer
• Oliver Byers – Chief Financial Officer
• Juha Järvinen – Chief Commercial Officer