Virgin’s big plans to steal Qantas, Jetstar passengers
Virgin Australia will become a 'hybrid' airline in an attempt to lure passengers away from both Qantas and Jetstar following the departure of popular CEO Paul Scurrah.
After days of speculation, Mr Scurrah quit the airline on Thursday morning to make way for controversial businesswoman Jayne Hrdlicka.
Virgin Australia revealed Mr Scurrah, who helped steer the airline through the most tumultuous time in its history, would leave the carrier once ownership was formally transferred to Bain Capital early next month.
Ms Hrdlicka, a former Qantas Group heavyweight who advised Bain during its bid to buy Virgin, will become its new chief executive.
Bain on Thursday praised Ms Hrdlicka's aviation experience, including delivering "record profits" at Jetstar.
She is expected to drive efficiencies at Virgin, with further job cuts expected.
Tensions were growing between Mr Scurrah and Bain Capital over its direction after administration.
Mr Scurrah had previously committed to the retention of business class and lounges, as well as at least 6000 of the airline's 9000 employees.
It is understood an internal push to shift Virgin towards becoming a low-cost carrier ultimately led to Mr Scurrah's resignation this week.
He opposed further job cuts at Virgin and feared a shift to the low-cost market would give Qantas a monopoly of the corporate sector.
Mr Scurrah's departure is expected to be followed by other top executives before Ms Hrdlicka's arrival.
Deloitte's Vaughan Strawbridge, who led the sale, reconfirmed Bain's commitment to operating a full-service carrier.
"This will appeal to the full spectrum of travellers, from premium corporate through to more budget-focused customers," he said.
The arrival of Ms Hrdlicka, an aviation executive and former a2 Milk boss, will herald a new era of efficiency.
"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.
Ms Hrdlicka's appointment has infuriated Transport Workers Union National Secretary Michael Kaine, who declared the future of the airline was now uncertain.
He said "secret backroom wranglings" to remove a "trusted CEO" was not a good start to Bain's ownership.
On Wednesday, the TWU suspended enterprise negotiations with Virgin after increasing speculation about Ms Hrdlicka's appointment.
One Virgin worker, who spoke on the condition of anonymity, agreed there was a fear the deeper job cuts and a more hardline approach would soon fall on the airline.
"There is a sense of sadness and I think it be here for a few days but we're a resilient bunch," the worker said.
The state government, which invested $200m for a 7 per cent stake in the airline, said it was not privy to management discussions. "Staffing matters and appointments at Virgin are a matter for the company," a spokeswoman for Treasurer Cameron Dick said.
Mr Scurrah's looming resignation resulted in shock inside Virgin this week with the popular leader widely respected for his effort and engagement with staff during the airline's four-month administration this year.
Mr Scurrah's 18-month stint as Virgin boss is the shortest of its three CEOs. He took over in early 2019 after the resignation of John Borghetti after nine years. After a decade of financial losses, Mr Scurrah had worked to cut costs and transition the airline before it was smashed by the COVID-19 pandemic in March. On April 20, with its cash reserves of $1bn dwindling, Virgin announced to the stock market that it had collapsed into administration with almost $7bn in debt.
This week, Mr Scurrah told The Courier-Mail the choice to hand over control of Australia's second-largest carrier to administrators Deloitte was the most "confronting" decision of his career.
Originally published as Virgin's big plans to steal Qantas, Jetstar passengers