Richard Branson declines to take sides on Virgin Australia bidding

Richard Branson won’t publicly ‘take sides’ in the bidding war for Virgin Australia, but is a central player in the sale process.

Sir Richard Branson’s Virgin Group has close ties with both the remaining Virgin Australia bidders. Picture: Toby Zerna

Richard Branson’s Virgin Group has politely declined to “take sides” in the bidding war for cash-strapped Virgin Australia, with the company continuing talks with all involved.

As the normally-publicity loving co-founder of the Virgin brand, Sir Richard has kept a relatively low profile in the process to date, beyond motivational messages to staff.

Behind the scenes the Virgin Group led by CEO Josh Bayliss, has been much more active particularly given the fact both parties left in the contest have close ties to the company.

New York-based Cyrus Capital launched Virgin America with Sir Richard in 2005 before selling it to Alaska Air for $2.6bn in 2016. Then last year Cyrus teamed up with Branson’s 51 per cent-owned Virgin Atlantic to buy British regional carrier Flybe, which went into administration early on in the COVID-19 crisis.

Bain Capital also has a significant involvement with the Virgin Group, as the majority owner of Virgin Voyages which was founded in 2014 but is yet to launch due to the global pandemic.

The new cruise line took delivery of the first of four ships in February, and Bain is understood to have impressed the Virgin Group with its grasp of what it takes to be a modern Virgin business.

Since Virgin Australia went into administration with debts of $6.8bn, Bain has been the most open about its plans for the airline, making a public pitch to firm up its place in the final two.

Cyrus is believed to have a similar vision to Bain, in terms of positioning Virgin somewhere between low fares carrier Jetstar and full service airline Qantas, with a network focused on key, money-making routes.

A Virgin Group spokeswoman would not say if one bidder was preferred over the other, but made it clear the company was a central player in the sale process.

“As the founder shareholder and licensor of the Virgin brand, Virgin Group will continue to engage with the administrator, bidders and management team in bringing Virgin Australia out of administration in a sustainable way for the benefit of customers, employees and communities in Australia,” she said.

“We have been greatly heartened by the amazing public support for Virgin Australia and we are pleased that the process being run by the administrator has attracted such a high quality group of bidders committed to the revival of the airline.”

A Sydney-based managing director of Bain, Mike Murphy, has gone on the record to pledge the company’s intention to maintain the Virgin brand. However it was expected it would seek to reduce the current $15m annual cost of the trademark.

Final binding offers from Bain and Cyrus for Virgin Australia are due by June 22, after administrators Deloitte gave them a 10-day extension.

A decision on the sale of the airline is expected by June 30.