New The New Owner For Virgin Australia Is In US Private Equity Firm Bain Capital

Virgin Australia, the airline that went into administration about two month ago, now has a new owner.

The United States private equity firm Bain Capital has been selected by the administrators to take over the carrier. The administrators however did not disclose any details of the deal.

Another bidder for the collapsed airlines was Cyrus Capital Partners, a New York-based investment firm as it had also submitted a binding offer for the to take over the airline. .

According to the administrators, “several proposals from other interested parties” were also submitted this week, which included a proposal by some of the airline’s bondholders.

According to Bain Capital, it would strive to “protect as many jobs as possible” while also maintaining the “unique culture” at Virgin Australia. There is are about 10,000 employees with the airline.

“We are determined to see that Australians have access to competitive, viable aviation services for the long-term,” wrote Mike Murphy, a managing director of Bain Capital, in a statement. Bain will strengthen Virgin’s “regional services” while also focusing on continuation of flights targeted at business and leisure travellers, he added.

This deal comes at a time when the global airline and aviation industry is reeling sever5ly because of the novel coronaviru pandemic. It could be as long as three years before international travel to return to pre-crisis levels, the International Air Transport Authority has predicted.

After it did not receive the government support that it was looking for, Virgin Australia, the second biggest airline of Australia, filed for voluntary administration in April. An appeal to the Australian national government for assistance was made earlier that week by the airline’s billionaire founder Richard Branson. He had even offered his estate in Necker Island in the Caribbean as collateral

Qantas, the main rival of Virgin Australia in Australia is also fighting very hard to stay afloat amid the pandemic induced crisis. This flagship carrier of Australia announced its plans of cutting down 6,000 jobs just this Thursday and its efforts to raise about 1.9 billion Australian dollars ($1.3 billion) as in order to address what it called “the biggest crisis our industry has ever faced.”

While refusing to provide any form of direct assistance or a bail out for Virgin Australia, federal authorities in of the country have stressed on the importance of the survival of the airlines.

“We want a competitive aviation market here in Australia. We want to see these two airlines [Virgin Australia and flag carrier Qantas] flying and competing,” Prime Minister Scott Morrison told reporters last month.

The deal would likely face “minimal” regulatory scrutiny, said the administrators of Virgin Australia on Friday.

Administrators said that preliminary regulatory approval from Australia’s treasurer has already been granted to Bain and is currently proceeding with the airline for its restructuring and eventual sale.

(Adapted from CNN.com)

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