The TWU has called ‘winning’ Virgin bidder Bain’s reluctance to state exactly who will be on the new board “underwhelming” as relations between the parties appear to strain.
Australian Aviation understands the union’s relationship with Bain is unravelling because the group will not publicly comment on speculation former Jetstar chief executive Jane Hrdlicka could be the new chairman. Hrdlicka had a notoriously fraught relationship with unions in her role at the Qantas Group.
The comments are significant given the business’ employees together account for 9,020 of the total number of creditors and are owed $451 million.
While Bain beat out Cyrus Capital Partners in May to become the administrator’s preferred bidder for the airline, the decision won’t be rubber-stamped until a final creditors meeting in early September, with the TWU’s backing likely to be crucial.
The statement comes as Virgin’s bondholders are in the Federal Court fighting for permission to put their rival bid to shareholders against Bain’s.
The TWU told Australian Aviation in a statement, “The reconstruction of Virgin is more than a narrow commercial consideration. A healthy and robust second airline will power Australia’s recovery from COVID.
“The board of the new Virgin must explicitly recognise that staff are critical to this mission and emphasise co-operation, rather than confrontation. The board must not view its workforce as another expense line like jet fuel or landing fees, but as an investment in a strong and prosperous future.
“Unfortunately, the responses we have received on the make-up of the new board are underwhelming. We are approaching a critical phase, with a vote on the deal on September 4 and negotiations on jobs. Our members are committed to rebuilding Virgin, but we will not expose them to a crude rip off where jobs and conditions are decimated.”
Previously, the TWU has broadly supported Bain’s involvement. In particular, the organisation refused to criticise ‘winning’ Virgin bidder Bain for its plan to axe 3,000 roles and scrap the Tigerair brand.
It said that while the announcement would lead to a “difficult day” for affected employees, the decision to avoid becoming a solely low-cost carrier was “broadly positive”.
Virgin Australia’s bondholders have already vowed to repay ‘winning’ bidder Bain for the money it’s pumped in to keep the airline flying should its rival proposal be successful and promised a union seat on the board.
The group, consisting of Broad Peak and Tor, said its bid would provide “an immediate better return” and has the backing of more than 14 major financial institutions including UBS, Credit Suisse, and Deutsche Bank.