Private equity firm and airline investor Indigo Partners is said to be making a second tilt at taking over Virgin Australia, on the back of a failed buy-in attempt in late 2018.
Indigo's track record as a backer of low-cost carriers will fuel speculation that, should its play for the embattled Virgin be successful, the airline could be recast along the same lines as its original Virgin Blue incarnation – making it a solid challenger to Jetstar but little threat to Qantas.
The US-based firm is believed to be one of at least ten interested parties circling Virgin, which entered administration one week ago and faced debts of $6.8 billion spread across some 10,200 creditors.
Managed by Bill Franke, a veteran low-cost airline investor, Indigo owns US budget carrier Frontier Airlines – ranked as the country's eighth-largest commercial airline – and holds stakes in an array of other LCCs including Europe's Wizz Air (which Indigo co-founded and where Franke serves as Chairman), Chile's JetSmart and Mexico's Volaris, and also has its eye on launching a low-cost Canadian play in partnership with Enerjet.
Indigo was a cornerstone launch partner in Singapore's Tiger Airways with a 24% stake, and planned to buy out Iceland's low-cost Wow before the airline collapsed in March 2019.
Will Virgin 2.0 go back to basics?
The firm's extensive roster of and expertise in low-cost airlines leaves little room for doubt that Indigo would want Virgin Australia 2.0 to be a full-service black sheep of the LCC family.
As it turns out, this is Indigo's second swoop at Virgin Australia. The Sydney Morning Herald reports that towards the end of 2018, Indigo agreed to buy the 20% stake in Virgin held by Chinese conglomerate HNA, contingent on being able to purchase similarly-sized packages from other investors in order to gain control of the airline.
Indigo pitched to China's Nanshan and Etihad Airways about acquiring some or all of their 20% shareholdings.
"However, the deal fell apart because one or both of the other shareholders rejected the offer," the SMH reports. "Indigo did not want to be left with the same level of control over Virgin as three other major shareholders, a situation it believed was responsible for the company's strategic paralysis."
Virgin Australia administrator Deloitte expects to present the restructured airline to potential buyers in early May, field "non-binding indicative offers" through to the middle of May and "serious, binding offers" by mid-June, with the intention of signing contracts by the end of June.