Wednesday, 28 October, 2020

Virgin CEO to leave soon: administrator

Virgin Australia's CEO to step down after life-saving takeover deal with Bain Capital finalises Virgin Australia CEO to step down from his role after airline reported losses of $349million
Ginger Lawrence | 18 October, 2020, 20:51

Virgin Australia Holdings chief executive Paul Scurrah will step down within weeks once the airline's sale to U.S. private equity group Bain Capital is completed, the airline's administrator said on Thursday (Oct 15).

It was later bought by Bain and staff were told at the time it would remain a full-service competitor to Qantas.

She is expected to drive efficiencies at Virgin, with further job cuts expected.

The decision follows reports that he disagreed with Bain over the future direction of the airline.

"If Bain starts to unwind these commitments and move towards a model of a low-priced carrier, this raises very significant concerns about job security for Virgin workers".

He opposed further job cuts at Virgin and feared a shift to the low-priced market would give Qantas a monopoly of the corporate sector.

Virgin Australia had flown about 130 aircraft to 41 destinations.

In a statement on Thursday, the airline's administrators Deloitte said Bain had reaffirmed that Virgin Australia would be a "hybrid airline".

"Virgin Australia will be a "hybrid" airline, delivering great value to its customers by delivering a distinctive Virgin experience at competitive prices", said Strawbridge.

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He will be replaced by former Jetstar boss Jayne Hrdlicka.

"I appreciate Virgin Australia's unique culture and I want to protect and build on it ... and I am determined that Virgin Australia reinvigorates its strong brand and its passion for customer service while embracing the diversity, talent and strength of its people", she said.

She previously held the role of chief executive officer at Jetstar.

When it was forced into voluntary administration in April, the airline's woes attracted a pack of private equity firms and other parties keen to acquire the airline before Bain Capital came out on top.

On Wednesday, the TWU suspended enterprise negotiations with Virgin after increasing speculation about Ms Hrdlicka's appointment. "It will result in the loss of many more jobs and could herald the demise of Virgin", it warned.

The state government, which invested $200m for a 7 per cent stake in the airline, said it was not privy to management discussions.

Virgin's administrators from Deloitte confirmed the resignation in a statement to ASX on Thursday.

Mr Scurrah's 18-month stint as Virgin boss is the shortest of its three CEOs. But that came at the cost of years of losses. On April 20, with its cash reserves of $1bn dwindling, Virgin announced to the stock market that it had collapsed into administration with nearly $7bn in debt.