Aviation

Virgin Australia bids locked in, but is an eleventh-hour play imminent?

Huntley Mitchell

Huntley Mitchell

The next stage of Virgin Australia’s sale process is underway, with the two remaining bidders locking in their offers for the beleaguered airline.

Deloitte’s Vaughan Strawbridge, John Greig, Sal Algeri, and Richard Hughes received the offers from Bain Capital and Cyrus Capital Partners just before 2pm yesterday, after they were granted three weeks to put their best foot forward.

Virgin’s administrators and their advisors will now spend the next week carefully assessing each bid, before selecting a preferred suitor by Tuesday 30 June.

“With aviation around the world in the middle of a COVID-induced restricted operations, today we’ve reached another important milestone in our rigorous and competitive sale process, with Bain Capital and Cyrus Capital Partners submitting their final and binding offers,” Strawbridge said in a statement yesterday.

“Both have previously flagged some of their thinking around a future-state carrier publicly, including operating a smaller, single-branded domestic and short-haul international airline that also has growth potential.

“Ultimately, the size of the airline will be dependent on the timing and level of demand by customers as travel restrictions are eased.

Strawbridge said both Bain and Cyrus have engaged closely with the range of groups that have an interest in the outcome of Virgin’s administration process, from federal and state governments and unions, to creditor groups that include airports and aircraft financiers.

“As I’ve previously said, both Bain and Cyrus have done an enormous amount of work to get here today, are well-funded and are enthusiastic supporters, and see real value in this business going forward,” he said.

“On the basis of their public statements, both bidders are committed to seeing a strong, competitive and sustainable Virgin Australia operating into the future, employing many thousands of Australians, and supporting the tourism industry and state and national economies.

“Both bidders have also already received FIRB approval, and we would like to acknowledge the assistance of the federal government on this front.”

While it’s not fully clear what each bid entails, both Bain and Cyrus appear to be keen on rebirthing Virgin as a mid-market airline in between Qantas and Jetstar.

It’s also been reported that both bidders have agreed to keep the airline based in Brisbane, thanks to a last-minute deal done with the Queensland government that will see the successful suitor receive roughly $200 million in benefits.

Cyrus and Bain have also given travel agents a much-needed confidence boost, with both bidders committing to honouring the estimated $100 million worth of pre-paid tickets for flights purchased through members of the Australian Federation of Travel Agents.

However, as we’ve already seen during the sale process for Virgin, there could still be one more surprise in store, with The Sydney Morning Herald reporting that the airline’s bondholders were preparing an alternative offer that would see their $2 billion worth of debt swapped for equity in a new carrier.

While there was no mention of such a move by Virgin’s bondholders in Strawbridge’s press statement, speculation still lingers over whether there is still a wildcard to be played.


Featured image: iStock/Picturesque Japan

SEE WHAT PEOPLE ARE SAYING

Leave a Reply

Destinations

Aussie states and territories restrict NZ arrivals after Auckland declared a Commonwealth hotspot

by Huntley Mitchell

The trans-Tasman travel plans of Kiwis have once again been thrown into disarray thanks to a concerning COVID cluster in Auckland.

Share

CommentComments

Travel Agents

AFTA’s interim survey results reveal “distressing” statistics, says Rudd

AFTA has released interim results of its ‘Travelsectorkeeper’ survey, and they make for some pretty grim reading, according to CEO Darren Rudd.

Share

CommentComments

Aviation

American Airlines confirms pilot saw UFO, says to contact the FBI

by Ali Coulton

We don’t know about you, but we see this as proof enough to start constructing tinfoil hats and heading for the hills.

Share

CommentComments

Destinations

Here’s how Scotland is embracing the ‘new normal’

While international travel may be at a standstill, Scottish tourism businesses have kept busy adapting services for their guests and local communities.

Share

CommentComments

Wholesalers

Abercrombie & Kent unveils remote Flinders Island adventure

The luxury travel connoisseur is bringing remote and unusual parts of Australia into the spotlight with the launch of this new active adventure off the Tasmanian coast.

Share

CommentComments

Tourism

“There’s a fair bit of work to still go there”: ScoMo plays down hype around ‘vaccine passports’

by Ali Coulton

When the PM talks about international travel, the whole of Australia listens. However, in this instance, you’re going to have to switch on your eyes rather than your ears.

Share

CommentComments

Travel Agents

Flight Centre posts $234m loss, but grows its share in “large and important” Aussie leisure market

by Huntley Mitchell

If you ignore that big negative number in the headline, it’s all very positive news here from FCTG.

Share

CommentComments

Aviation

Qantas suffers $1bn half-yearly loss, pushes back international flight plans

by Huntley Mitchell

The flying kangaroo won’t be hopping overseas as soon as originally hoped, after posting a “stark, but not surprising” loss.

Share

CommentComments

Destinations

Brisvegas tapped as preferred host for 2032 Olympic Games

Crack a tinnie of XXXX Gold, because it looks like the Olympics might be coming to Queensland 32 years after Sydney’s hosting efforts.

Share

CommentComments

Cruise

Carnival Cruise Line extends US pause, as Canadian port closures spark Seabourn, Princess and HAL cancellations

Canada’s obnoxiously handsome PM, Justin Trudeau, has chucked a spanner in the works for cruise fanatics over on that side of the globe.

Share

CommentComments

Technology

Intrepid co-founder backs the Pinterest of travel apps

The social media platform claims to be the first to let users share travel-specific content to create real-world itineraries.

Share

CommentComments

Destinations

Why your clients will be drawn to Japan’s heartland once international travel restarts

by Sponsored by Gifu Prefecture Tourism Federation

With your clients no doubt itching to get back overseas, here’s a destination that’s a realistic chance of reopening to Aussies before many others.

Share

CommentComments