In order to repair the airline’s finances, Sir Richard Branson’s Virgin Atlantic airline is exploring a possible listing on the London Stock Market.
The move could see shares offered to private investors as well as big City firms, but mean he will lose overall control of his flagship business.
Virgin Group owns 51% of the airline, while US-based Delta Air Lines has 49%.
It is understood Virgin has hired a team of City advisors to explore the possibility of its first public stock offering, however, the airline sates it is just speculation at this point.
It is not easy for airlines to stay afloat in the era of cheap air travel. In April, Virgin Atlantic announced a £659m loss for 2020 after passenger numbers plummeted 80%. This was due largely to the coronavirus collapse that rocked global travel last year.
The company announced it would be cutting thousands of jobs.
Raising funds has been difficult for the airline with global aviation still struggling to rebound.
Selling a stake in the airline would raise much-needed funds as global aviation rebuilds.
Although the share prices of British Airways owner IAG and EasyJet are still significantly lower than pre-Covid levels, some investors remain skeptical about how long it will take for the airline industry to recover.
Virgin Atlantic’s revenue is heavily dependent on their UK-US services, and the airline is hoping for a rapid rebound in services as lockdown restrictions finally ease.
The Virgin Atlantic IPO will be the first time that shares have been sold to the public, and would likely see the groups stake fall below 50%.
Sir Richard founded Virgin Atlantic in 1984 and has since gone on to establish a successful business empire. His company now includes the Virgin Galactic space travel arm which aims to provide suborbital spaceflights to space tourists.
However, the airline’s survival seemed in doubt last year when administrators were put on standby while Sir Richard negotiated a £1.2 billion rescue package.
That package included a loan from the American hedge fund Davidson Kempner Capital Management.
Sir Richard tried and failed to secure rescue funds from the UK government, by using his Necker Island holiday resort as collateral.
A spokesperson for Virgin Atlantic has called reports of a possible flotation “speculation” and declined to comment further.
