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TWU restart Virgin talks after ‘hybrid’ reassurances

written by Adam Thorn | October 26, 2020
A Virgin Australia Boeing 737-800 Hobart
A Virgin Australia Boeing 737-800 arrives at Hobart Airport (Craig Murray)

The TWU has announced it will resume negotiations with Virgin over working terms after suspending talks the day before Paul Scurrah apparently resigned as chief executive.

National secretary Michael Kaine said the organisation, and other unions, will go back to the table with new owner Bain after receiving information “reconfirming” the carrier’s plan to become a mid-market hybrid and not a low-cost carrier.

The news comes after Scurrah earlier this month announced his exit to be replaced by former Jetstar boss Jayne Hrdlicka.

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His departure is significant because he was synonymous with the airline’s plan to operate as a mid-market ‘hybrid’ rather than reverting back to being a low-cost carrier like predecessor Virgin Blue.

Hrdlicka, meanwhile, also had a notoriously fraught relationship with unions in her earlier role at the Qantas Group.

“The TWU and other unions have received correspondence reconfirming the scope of Virgin regarding regional routes, the international division, 6,000 jobs, tiered-classes, lounges and the scope of the fleet,” said Kaine. “On this basis the TWU will resume negotiations on our enterprise agreements.

“We are pleased at the positive statement reinforcing core principles that will guide Virgin back to its place as a competitive and strong second airline.”

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The two sides are attempting to negotiate new enterprise agreements underpinning terms and conditions, which have expired.

The thawing of relations comes after the TWU earlier said it had “serious concerns about the future of Virgin” and lashed out at Bain’s “background shenanigans”.

Late last week, it also emerged that nine directors will leave the company including chairperson Elizabeth Bryan in advance of Bain formally becoming the new owner of Virgin Australia early next month.

“With effect from 20 October 2020, Elizabeth Bryan, Kenneth Dean, Trevor Bourne, Sir Allan Houston, Judith Swales and Marvin Tan (Pee Tan, alternate director) resigned as directors of Virgin Australia Holdings Limited,” said administrator Deloitte in a statement to the ASX.

“Formal resignations have not yet been received from Raymond Gammell, Hou Wei (Du Ming, alternate director) and Kevin Xing (Wu An, alternate director) as directors.

“So as to ensure that reconstitution of the board takes effect immediately, the deed administrators have exercised their powers to replace those directors who cease to hold office as a director on today’s date.”

Bain has appointed Alan Hunt as a director and confirmed Scurrah will stay on until the sale is complete.

Bain has resolutely defended the appointment of incoming chief executive Hrdlicka, arguing that she would provide a “different form of leadership” needed to survive.

“We need a hands-on CEO with deep aviation, commercial, operational and transformation experience,” said Bain Capital managing director Mike Murphy in a statement. “She has extensive airline experience and I know she, alongside Bain Capital, wants nothing more than to see Virgin Australia prosper and thrive well into the future.”

Last week, Qantas chief executive Alan Joyce has predicted Virgin’s new scaled-back strategy will see his airline’s domestic market share increase from 60 to 70 per cent.

“Over time, our domestic market share is likely to increase organically from around 60 per cent to around 70 per cent, as our main competitor changes its strategy,” said Joyce referring to Virgin.

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2 Comments

  • Trevor

    says:

    Yeah, right! Have the dumbo unions’ got all that in writing? If not, it’s just words.
    Just wait until Bain finalises ownership paperwork, then see what happens. November should be interesting.
    Bain’ll do what they want, as then they’ll own it, & their money is being used.
    Wonder when the probable asset-stripping will start, as that’s what PE’s do.
    Currently, theres no food or drinks available for on board, at a minimum, but does anyone bother to wonder why that is?
    Becoming a ‘hybrid’ airline? As above said, yeah, right.

  • Dan

    says:

    @Trevor

    There are very little assets at Virgin Australia to “asset-strip”. Half the fleet was leased, and the owned fleet was already ‘asset-stripped’ by Singapore, Etihad by mortgaging the 737s and 777s against the banks.

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