By Scott Murdoch

(Reuters) - Virgin Australia will return to stocks after five years of absence, with Bain Capital-owned airline launching an initial public offering of $685 million ($443 million) on Wednesday after a rebound in tourism on Wednesday.

According to the glossary of transactions seen by Reuters, the product is the largest in a year to date, which will reduce Bain's stake from about 70% to 39.4%, while Qatar Airways, which recently purchased on airlines, will retain a 23% stake.

This is one of Australia’s most watched deals over the years, as a successful listing will be seen as a vote of confidence in the prospect of a reliable recovery in the country’s consumer spending.

The term suggests that the stock will be offered at a fixed price of $2.90 per share, rating the company in a fully diluted manner at $2.32 billion.

Bain, who purchased Virgin for $3.5 billion (including liability), declined to comment on the transaction details outlined in the terms sheet.

The U.S. private equity firm acquired the airline in 2020 after voluntary administration and was attacked by a jointly induced travel restrictions.

A good start

Potential customers look good for a successful IPO.

Investors made instructions on Virgin Atlantic bidding before book construction began, a secretary message sent on Wednesday showed.

Domestic travel demand is also recovering, which is aided by the last two cuts in interest rates. This in turn creates a record stake in the shares traded by rival Qantas. Australia's ASX200 also reached its all-time peak in February.

Virgin cuts its international operations as part of its revival efforts over the past few years. But this is due to the resumption of long-haul flights with state-owned Qatar. The two airlines plan to conduct 28 new weekly return services between Doha and Australia's main airports.

Official data shows that in March, domestic commercial airlines in Australia conducted 5.1 million passengers in March. This was a slight decline last year, but it was more than four times the peak of Covid in mid-2021.

"Recovered Virgin Australia is also benefiting the continued strong local demand, slow overall capacity growth and reduced competition in the domestic market," said Simon Ersegood, head of research at CAPA's Aviation Center.

He noted that in the mainline jet market, the failure of competitors Bonza and Rex only benefited Virgin and Qantas.

According to the Australian Competition and Consumer Commission report, Virgin has a domestic market share of 34.4%, with Australians not far from Qantas’s market share as of March, accounting for 37.5%.