By Scott Murdoch and Christine Chen SYDNEY (Reuters) -Virgin Australia shares surged 11.4% in its trading debut on Tuesday, lifting its market capitalisation to A$2.58 billion ($1.7 billion), with dealmakers hopeful it will revive Australia's subdued listings market.

Virgin has undergone some radical surgery in the five years since it collapsed, and soared on its ASX re-entry, but the risks of investing in airlines remain.

Virgin Australia Holdings Ltd (ASX: VGN) shares are officially back on the ASX boards after completing its long-awaited initial public offering ( IPO ). The airline operator's shares are currently changing hands for $3.18, which represents a 9.5% increase on its listing price.