The current chair of Virgin Australia, Elizabeth Bryan, will launch a withering broadside at former chief executive John Borghetti, claiming he built a good airline but not a “good enough business”.
In an interview set to screen on the ABC’s Four Corners on Monday night, Bryan will say, “When I arrived at the airline, a lot of frontline staff said, ‘Look, can we, can we please stop trying to be like Qantas because … Qantas is a great airline. You’re never going to beat Qantas at Qantas’ game.”
Borghetti took on the top role at Virgin at 2010 and served until 2019, and was best known for moving the airline away from its low-cost Virgin Blue roots to becoming a full-service, international rival to Qantas.
However, the changes led to years of losses, which culminated in the company moving into administration months ago.
Bryan’s comments are particularly stinging given she is still in the role and worked closely alongside Borghetti since her appointment in 2015.
She will say that Virgin was “hell-bent” on increasing market share but the plan failed because “you’ve got to be able to afford it. In the end, deep pockets win and Qantas is the deep pocket, not Virgin”.
The ABC reports that Borghetti declined an invitation to appear on the program, but defended moving the airline away from its low-cost routes, saying the plan was “the only strategy” possible.
“Virgin had found itself placed in the middle between Jetstar and Qantas and it had outgrown the low-cost space but hadn’t quite penetrated the corporate space, so you needed to go one way or the other,” he said.
“You couldn’t go back to the basic low-cost carrier phase because your cost base was too high, so you only had one way to go and that was to attack Qantas and get the corporate market.”
Last week, Virgin Australia’s administrator confirmed Bain Capital had won the bidding war to acquire the airline.
The successful US investor is thought to be endorsing the current management’s plan to keep the airline as a mid-market hybrid, but with a more simplified business model.
Bain’s winning bid will now be put to creditors in August, who will vote to confirm the deal.
The TWU tentatively lent its support to winning bidder, saying it put forward “a solid bid to secure the administrator’s recommendation” and that the union would be happy to work with them.
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