Virgin Atlantic: Desperately
Seeking Capital — September 2021

Few cities in the world can support two directly competing home airlines. American plays second fiddle to United at Chicago; JAL and ANA enjoy a comfortable duopoly in Tokyo; and Virgin Atlantic competes aggressively against IAG’s British Airways in London. But Virgin only flies long haul, with a heavy focus on the Atlantic, and had a relatively small overall footprint in London — with 3% of the slots at Heathrow in 2019 and 1.5% of those at Gatwick. Long haul operations have been badly hit by the coronavirus crisis, and are expected to take a long time to recover to pre-pandemic levels.

Recent press reports suggest that Virgin Atlantic may be contemplating an IPO on the London Stock Exchange as early as autumn this year. This is likely to see the flamboyant Richard Branson relinquish majority control (51% owned by Virgin Group, 49% by Delta Airlines) for the first time since the airline was founded nearly forty years ago. It will also open the carrier to greater financial scrutiny than that to which the unconventional entrepreneur has been accustomed. But it may go some way to restore a balance sheet almost fatally harmed by the effects of the Covid pandemic.