Virgin Australia has confirmed union nemesis Jayne Hrdlicka will become the business’ new chief executive after Paul Scurrah resigned on Thursday.
However, administrators Deloitte were quick to argue Scurrah’s exit will not see the airline become a low-cost carrier, and will continue with plans to operate as a ‘hybrid’ instead.
The handover will take place in early November, when the formalities of Virgin’s sale to Bain are completed.
The news comes despite Scurrah exclusively telling the Australian Aviation Podcast just weeks ago that Bain was “a really good owner” and that the relationship between the investors and the existing management team was like “a good marriage”.
At the end of the show, which you can listen to again above, Scurrah signalled he was keen to appear on the show again to talk through how his plans were developing, suggesting his decision to apparently resign is a recent one.
Vaughan Strawbridge, who has overseen the administration process for Deloitte, said, “I know there has been speculation about the shape of the airline into the future, and I have reaffirmed with Bain Capital that Virgin Australia will 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. This will appeal to the full spectrum of travellers, from premium corporate through to more budget-focused customers.”
On the Australian Aviation Podcast, Scurrah said the reborn business’ new strategy will see it become a “high-quality, value airline”.
He insisted the new-look airline would emerge from the pandemic with “75 plus” aircraft and offer a network “not too dissimilar” to what it had last year. Scurrah was widely regarded as being responsible for stopping the airline’s slide into becoming like its low-cost predecessor, Virgin Blue.
Only yesterday Scurrah dismissed the rumours and added that they’ve been ongoing for quite a while.
Significantly, the announcement of Hrdlicka as the new boss is likely to infuriate the TWU, who had a high-profile falling out with the airline when rumours of her appointment swilled months ago. Hrdlicka had a notoriously fraught relationship with unions in her earlier role at the Qantas Group.
Just yesterday, the TWU suspended negotiations with the business over new working terms for its members until it received clarification that Scurrah would not be fired. However, relations were unravelling before that and the union only backed Bain’s acquisition at the last minute.
“I have also appreciated working with Bain Capital in recent months and recognise the significant contribution they have made to Virgin Australia’s long-term future,” said Scurrah in a statement to the ASX. “They have demonstrated a deep understanding of aviation and our culture.
“Having seen the company through COVID-19, voluntary administration, the sale to Bain Capital and the redesign of the business, I will be stepping down as CEO and managing director at financial close of the DOCAs. I have made this decision after some long discussions with my family. The time feels right, and I know the business will be in good hands.
“I am proud of that work that has been completed to date to transition the business and remove complexity, allowing the airline to compete effectively once demand returns.
“I want to thank all of our team members who have continued to support and work tirelessly to get the company through to this stage. I will forever be proud of what we have done here. It is the people that make this airline the great place it is and I wish them all the best. I was extremely humbled by the warmth with which I was embraced on day one and for the unwavering support afforded to me throughout this ongoing major industry crisis.”
Bain Capital managing director Mike Murphy said, “Paul has provided the leadership to enable Virgin Australia to emerge from voluntary administration as a well-capitalised, best in class carrier. His personal commitment and determination to lead Virgin Australia through such a turbulent period is a credit to him.”