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The Australian Federation of Air Pilots has given the thumbs-up to Virgin Australia’s upcoming IPO and its wet-lease deal with Qatar Airways.
The union, whose approximately 850 Virgin Australia members make up the majority of the airline’s pilot workforce, said it supports Virgin’s plan to expand its fleet and route network and will work with management to prepare for next week’s ASX relisting, slated for 24 June.
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“The AFAP looks forward to continuing to work productively with Virgin as it embarks on this new phase of the company’s growth following the ASX listing,” vice-president Michael McGinnis said in a statement.
“The AFAP also welcomes the employee share scheme that will see Virgin pilots receive $3000 worth of share rights. This recognises that Virgin pilots were key in helping to rebuild the airline into the success that it is today.”
The statement comes as Virgin commences its new services to Doha using leased Qatar Airways 777-300ERs, the first of which took off from Sydney last week.
The AFAP, which backed the Qatar wet-lease deal in an ACCC submission last year, said it continues to support the arrangement as a “temporary mechanism through which Virgin can demonstrate the business case for operating its own wide-body aircraft in the future”.
“This return to wide-body flying utilising aircraft wet-leased from Qatar Airways has the potential to offer our pilot members additional opportunities to operate aircraft on these new international routes,” McGinnis said.
“While at first this will be through secondments to Qatar Airways, we look forward to hopefully moving to an insourcing model where this flying will eventually be carried out by Virgin Australia’s own pilots and cabin crew.”
Majority owner Bain Capital is looking to raise $685 million in Virgin’s IPO, which will reduce its holding in the airline to 40 per cent. Brokers are selling 30 per cent of stock to new investors, with Qatar Airways to retain 23 per cent and management 7.8 per cent.
“The IPO is comprised of an offer of 236.2 million fully paid ordinary shares at an offer price of A$2.90 per share, raising A$685 million to allow certain existing equity holders the opportunity to realise part of their investment in the company,” Virgin said in a press statement earlier this month.
According to The Australian Financial Review’s “Street Talk” column, Virgin will relist with a $2.3 billion market capitalisation and $3.6 billion enterprise valuation at a 30 per cent discount to rival Qantas’ valuation.
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says:The AFAP should be congratulated for it’s public support for the upcoming VOZ IPO however I think their cause is lost. VOZ, like a lot of other airlines, it is run by bankers, money people/accountants where the bottom line is all paramount, inwards not forward thinking, the comfort/welfare of all but premium paying passengers is surely lacking, just how many more rows can we fit in and how much less victualing can we provide, make more money! Bain shouldn’t be persecuted here, all private equity groups have the same M.O. Bain’s actions had a lot of positives, releasing the B777-300ER was highly questionable and now, possibly having to possibly retrain/hire professional tech and cabin crew for future 777 ops, wow. Dumping the east coast regional network was nothing but a money decision, no operational common sense at all. There has to be a more operationally involved outcome supported by an approachable flexible crew in mahogany row. Encourage comment not lock it away in the fear cupboard