With Virgin Australia in administration, there's a field of players lining up with buyout offers. Like a horse race, some of these players are at shorter odds than others. One potential buyer, for weeks considered a long shot, is Indigo Partners. The Arizona-based private equity firm has investments in several low-cost airlines around the world and was known to be looking at Virgin Australia. However, it was considered an outside chance at best. But yesterday, Indigo Partners' odds shortened nicely.

That came about when The Sydney Morning Herald revealed that Indigo Partners had made a pitch for a stake in Virgin Australia in late 2018.

The report, citing unnamed sources close to the action, said Indigo Partners wanted to buy HNA's 20% stake in Virgin Australia. Indigo also spoke to Etihad and China's Nanshan Group about buying some or all of their stakes.

Had the deal come off, and according to the newspaper's source, it nearly did, Indigo Partners would have bought a controlling stake in Virgin Australia.

The deal ultimately fell through after another shareholder or shareholders raised concerns. Both Singapore Airlines and the Virgin Group also have large stakes in Virgin Australia.

Virgin Australia's ownership structure has caused a degree of stasis at the airline. That stasis was a contributing factor to the airline's collapse. Indigo Partners didn't want to buy into this ownership stasis; they wanted to break it down. Ultimately, what Indigo Partners wanted didn't fly.

Indigo Partners has been known to be kicking Virgin Australia's tires for several weeks now. But it has been viewed as a long-shot chance. But now, with The Sydney Morning Herald exposing this history, Indigo's intent towards Virgin Australia must be taken seriously.

Indigo Partners has significant investments in Frontier Airlines, JetSMART, Volaris, and Wizz Air.

While the odds have shortened, local analysts do not think Indigo Partners is right at the front of the race for ownership of Virgin Australia right now.

While fluid, two local funds are seen to be leading the race. Sydney private equity firm BGH Capital is right up there. In its camp are AustralianSuper, Bain Capital, Apollo Global Management and Oaktree Capital Management. Singapore's sovereign wealth fund, Temasek, has close links with BGH Capital. Temasek owns Singapore Airlines. Despite denials out of Singapore, Temasek continues to lurk around BGH Capital and the fringes of the Virgin Australia collapse and restructure.

The other frontrunner is Macquarie Group. The Australian powerhouse investment bank is in bed with local conglomerate Wesfarmers. There are a lot of folks backing this cashed-up homegrown bid. There is also the suggestion that Indigo Partners should team up with Macquarie's bid, putting the experienced low-cost airline operator right at the forefront of the pack.

There has been some water under the bridge since Indigo Partners last made a serious tilt at Virgin Australia. But the fact that the Arizona based business is still lurking around Sydney and looking at Virgin Australia suggests it is interested in another tilt. Its actions in late 2018 indicate Indigo Partners is willing and able to walk the talk.

It raises an interesting scenario. Much of the discussion surrounding the future of Virgin Australia centers on what type of airline it will be in the future. Most analysts think Australia can support two full-service carriers. But Indigo Partners operates low-cost carriers. Venturing into full-service airlines is new territory for it. Should Indigo Partners manage to come from the back of the field and pull off buying a stake in a restructured Virgin Australia, would Indigo want to continue with the previous full-service model?

Lead Journalist - Australasia - A Masters level education and appetite for travel combines to make Andrew an incredible aviation brain with decades of insight behind him. Working closely with airlines including Qantas and Virgin Australia, Andrew’s first-hand knowledge of the challenges and opportunities facing Australian airlines adds exciting depth and color to his work and sees him providing commentary to ABC News and more. Based in Melbourne, Australia.