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Sir Richard Branson’s Virgin Atlantic Airways is reportedly planning to go to the London Stock Exchange as it appears to be benefiting from a boom in the travel industry and international travel is slowly picking up again.
The reports come as the UK comes out of a third lockdown, but international travel restrictions remain in place. The sector was one of the hardest hit during the crisis with planes grounded for months as governments tried to control the spread of Covid-19.
The UK-based airline has met with institutional investors to present their plans for the exchange as early as the fall, the Financial times reported,citing a person familiar with the matter.Sky News first made the news on August 7, saying that bankers from Citi and Barclays have been hired to lead the IPO. Virgin Atlantic said it will not comment “on the speculation”.
The airline reported a pre-tax loss of 659 million for 2020, saying in its April 30 statement that the results “reflect the most difficult year in the airline’s 36-year history and the enormous challenges the airline industry faces as a result of the Covid-19 pandemic”.
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“The company is in dire need of money and selling stock is one way to fill the treasury,” said Laura Hoy, equity analyst at Hargreaves Lansdown, commenting on the reports.
“However, this is a bit of an odd time to sell airline stocks. The sector has been knocked down and the pandemic-related uncertainty continues. This is especially true for long-haul airlines who will be the last to see traffic recover.”
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