Virgin Australia CEO Paul Scurrah to step down after Bain takeover

"This will appeal to the full spectrum of travellers, from premium corporate through to more budget-focused customers." Creditors owed nearly A$7 billion ($5 billion) last month approved Bain's purchase of the airline, which entered voluntary administration in April after suffering from a sharp plunge in demand because of the coronavirus pandemic. Unions representing Virgin employees on Thursday said they were concerned about the possibility of Scurrah's exit and potential plans to move the full-service carrier downmarket.

Virgin Australia Holdings Ltd 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. Jayne Hrdlicka, a former head of Qantas Airways Ltd budget offshoot Jetstar, will take over as CEO at Australia's second-biggest airline at the close of the deal, expected in early November.

Scurrah had clashed with Bain about the strategy and wanted to maintain a more premium offering than desired by the U.S. firm, two people with knowledge of the matter told Reuters on condition of anonymity. Administrator Vaughan Strawbridge of Deloitte said he had reaffirmed with Bain the full-service airline would not be repositioned as a low-cost carrier.

"Virgin Australia will be a 'hybrid' airline, offering great value to customers by delivering a distinctive Virgin experience at competitive prices," Strawbridge said in a statement. "This will appeal to the full spectrum of travellers, from premium corporate through to more budget-focused customers." Creditors owed nearly A$7 billion ($5 billion) last month approved Bain's purchase of the airline, which entered voluntary administration in April after suffering from a sharp plunge in demand because of the coronavirus pandemic.

Unions representing Virgin employees on Thursday said they were concerned about the possibility of Scurrah's exit and potential plans to move the full-service carrier downmarket. Employees, the largest creditors by number, voted overwhelmingly in favour of the Bain purchase after being told it would remain a full-service competitor to Qantas.

Scurrah, who took over from long-serving boss John Borghetti in March 2019, is highly regarded by staff despite having announced plans to cut one-third of the workforce due to the pandemic. Hrdlicka had a tense relationship with unions in her previous roles at Jetstar and Qantas.

"We will do our best to work with Jayne Hrdlicka but are mindful of her reputation and track record," said John Lyons, the president of The Association for Virgin Australia Group Pilots. Before the pandemic, Virgin had spent a decade transforming itself from a low-cost carrier to a full-service rival to Qantas competing for corporate travellers. But that came at the cost of years of losses. ($1 = 1.4004 Australian dollars)

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