Virgin Australia has been in quite some headlines for the last three weeks or so. And now, we have them in the spotlight again, as we know the two final bidders in the race to buy the beleaguered airline. Two USA based investment giants, Bain Capital and Cyrus Capital Partners, have been finally shortlisted to buy Virgin Australia. The bidding is expected to be more than $3.5bn.
Deloitte, the airline administer has confirmed that Cyrus and Bain are shortlisted for the final round from a list of about twenty entities. Both the firms are now preparing their final proposals, which are to be submitted by June 22, 2020. The winner shall be chosen by end of this month. Virgin Australia had a competitive list of bidders – Australia’s BGH Capital, India’s Interglobe Aviation and Canada’s Brookfield, alongside Cyrus and Bain, among many others.
Deloitte’s Vaughan Strawbridge said in a statement:
‘Both Bain Capital and Cyrus Capital Partners are well-funded, have deep aviation experience, and they see real value in the business and its future.’
Bain Capital is headed by Mike Murphy, alongside some notorious names in aviation like the Jetstar Chief Executive Jayne Hrdlicka, who is most likely to move in Virgin Australia as either its Chairman or CEO, if Bain successfully acquires the carrier. Cyrus, on the other hand, has solid connections with the Virgin brand. Cyrus had worked extensively alongside the Virgin Founder, Sir Richard Branson, in the launch of Virgin America.
Australian Transport Workers Union Secretary Michael Kaine has stated:
‘Both of the short listed bidders are committing serious capital to the airline and with ambitions to get back to a full service airline. It is now up to the final bidders to show they can follow through on their commitment to ensure the best outcome for the Australian community and Virgin workers.’
The vision of both these firms for Virgin Australia is, however, poles apart. While Cyrus wants the airline to remain the current full-service carrier that Virgin Australia is, Bain, on the other hand, is proposing that Virgin Australia 2.0 be a mid-market airline. While Cyrus is more focussed on making Virgin Australia a sustainable business with tried and tested methods, Bain has more ambitious plans to bring about a paradigm shift, using this adversity as an opportunity in ameliorating the airline’s profile in Australia’s aviation market.
While we shall know the final owner of Virgin Australia by end of this month, the Virgin Group has promised that it would be willing to inject $100mn into the new company. This would give the Virgin Group a stake of 10 percent, which shall be enough to secure a seat on the board, and thereby, allow them to contribute to the airline’s strategy.
While Virgin Australia finds its own master, we hope the airline sees a bright future with a contemporary business model, while retaining its core value – Flying in the Face of Ordinary!
This content was provided to MentourPilot by provider, Travel Radar Media. Travel Radar offers high quality content in partnership with Mentour