In 2020, Bain Capital purchased Virgin Australia out of voluntary administration after months of negotiations. The Boston-based US private equity firm now owns almost 95% of Virgin Australia, along with Richard Branson’s Virgin Group which owns around a 5% share. A small stake in the airline was also purchased by the Queensland government.

Following the sale to Bain Capital, Virgin Australia is no longer publicly listed on the Australian stock market. Although, there have been reports that Bain could be looking to make an initial public offering (IPO) as early as next year.

Managing more than AU$200 billion worth of assets across its portfolio, Bain Capital owns and invests in lots of businesses across different countries and industries. For example, Bain Capital has also invested in Toys “R” Us, Staples, Warner Music Group, Canada Goose and Dunkin’ Donuts.

While Virgin Australia represents Bain Capital’s largest investment in an airline, it’s not the private equity company’s first dabble into an aviation business. Bain has also purchased stakes in several other airlines and aircraft leasing companies.

Bain Capital’s other aviation businesses

In late 2017, a consortium of private equity firms led by Bain Capital acquired Trans Maldivian Airways, an airline that operates seaplanes from Malé to resorts across the Maldives. Bain sold its majority stake to Carlyle in 2021.

Then in 2019, Bain Capital Credit (a division of Bain Capital) acquired five aircraft with Windward Air Capital. These planes were leased to airlines in Europe, Asia and Central America. Later that year, Bain invested in the Titan aircraft leasing business of Atlas Air Worldwide, a cargo airline.

Bain Capital also acquired a 16.6% stake in Icelandair in 2021. This makes Bain Capital the largest single shareholder of Icelandair, and a Managing Director from Bain Capital Credit subsequently joined the Icelandair board of directors. (John Thomas, a former Virgin Australia executive, also now sits on Icelandair’s board.)

Although it’s not an airline business, Bain Capital also jointly owns Virgin Voyages along with Richard Branson’s Virgin Group. Virgin Voyages is a cruise line.

Could Virgin Australia partner with Icelandair?

Following Bain Capital’s acquisition of Icelandair, there was some speculation that the Icelandic airline could become a partner of Virgin Australia.

In the past, many of Virgin Australia’s partners were airlines which also owned stakes in Virgin Australia. These included Etihad, Singapore Airlines, Air New Zealand, several Chinese airlines owned by Nanshan Group, and some of the other airlines Etihad had invested in like Airberlin and Alitalia. (These airlines no longer own any part of Virgin Australia.)

But not all of these partnerships have been successful. As history has told us, common ownership doesn’t necessarily mean an airline is a good fit for a frequent flyer partnership.

With Icelandair located on the opposite side of the planet, and flying to no destinations that Virgin Australia serves, it’s hard to see any good reason for these airlines to become partners. That said, the ability to redeem Velocity points on Icelandair would be nice.

You can leave a comment or discuss this topic on the Australian Frequent Flyer forum.

Matt Graham

The editor of Australian Frequent Flyer, Matt's passion for travel has taken him to over 90 countries… with the help of frequent flyer points, of course!
Matt's favourite destinations (so far) are Germany, Brazil & Kazakhstan. His interests include aviation, economics & foreign languages, and he has a soft spot for good food and red wine.

You can connect with Matt by posting on the Australian Frequent Flyer community forum and tagging @AFF Editor.