Jayne Hrdlicka has scored an early victory in her tenure as Virgin chief executive after securing a deal with four unions over working terms.
The agreement with the TWU, FAAA, ASU and ALAEA will see employees accept an 18-month to two-year pay freeze in exchange for a guarantee that no jobs will be outsourced.
The deal will be seen as a coup for the former Jetstar boss given her notoriously bad relationship with unions over the years. Unions at one stage walked out of negotiations when rumours first emerged that former boss Paul Scurrah was to leave to be replaced by Hrdlicka.
The deal is between Virgin and the TWU (Transport Workers Union), FAAA (Flight Attendants’ Association of Australia), ASU (Australian Services Union) and ALAEA (Australian Licensed Aircraft Engineers’ Association). It doesn’t, as yet, include the two pilots unions.
“We know we’ve asked a lot of them as a result of the operating environment we find ourselves in, and we are grateful for their understanding and support throughout,” said Hrdlicka.
“We have all worked together in a very tight timeframe in order to be able to bring certainty to our people prior to the holiday period.
“We believe the outcome we have achieved working together with the unions will help to create a sustainable future for our airline, and means we can secure more jobs and look to grow again as the aviation market recovers.”
Employees will initially vote for the regional airlines part of the enterprise agreement this week, with subsequent votes to happen soon.
TWU national secretary Michael Kaine said the deal will protect jobs and allow the airline to become competitive again.
“These have been tough negotiations during the backdrop of continuing uncertainty for aviation and upheavals at Virgin,” said Kaine.
“The focus of Virgin workers is to build back up the airline that they have fought so hard for during the administration process. These wins will ensure standards in service and safety that Virgin passengers have come to recognise.”
The departure of former CEO Scurrah angered unions 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.
However, on her first day, she doubled down on the reborn business’ plans to become a mid-market ‘hybrid’ and not a budget airline.
“Australia already has a low-cost carrier and a traditional full-service airline, and we won’t be either,” said Hrdlicka. “Virgin Australia will be a mid-market carrier appealing to customers who are after a great value airfare and better service.
“The travel environment is changing and so are our customers’ preferences. We know that leisure travellers, small and medium businesses, and many corporates are now emerging from COVID-19 wanting better value.
“They are hungry for flexibility and choice, a trusted brand that resonates with their values, and great prices, along with the premium features they value most.
“Today, we’ve announced a plan that will ultimately give our customers what they value without the big price tag: premium lounges, a new and fresh retail offering onboard, a choice of cabins, better digital technology and a more streamlined check-in experience.”
New owner Bain has resolutely defended the appointment of 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.”