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Hrdlicka says Virgin doing ‘at least as well’ as Qantas

written by Adam Thorn | June 10, 2022

Victor Pody shot this Virgin Australia 737, VH-YIY.

Virgin chief executive Jayne Hrdlicka has said she believes her airline is now as profitable as Qantas on domestic routes.

In an interview with The Australian, she hailed the business’ “extraordinary” recovery and hinted it could be relisted on the ASX as soon as next year.

Virgin entered administration in April 2020 owning more than $7 billion and was subsequently bought by new owner Bain later that year for $3.5 billion.

However, as domestic travel bounces back in Australia, Hrdlicka said she believes Virgin is now doing “at least as well” as Qantas.

“Corporate travel is rebounding faster than we would have thought,” she said.

“Companies are realising that relationships are a fundamental part of running your business. If you’ve worked from home for a whole year, you don’t feel the same affinity to your colleagues.”

Hrdlicka added the recovery was down to narrowing the gap between its cheapest and dearest fares, and also “dramatically” cutting its cost base.

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She said relisting on the ASX was “not outside the realm of possibility” in 2023.

“It’s a lot faster than we thought it would be and we are flattered that this soon after becoming a new company and starting from scratch we’re in a position where we’re having these conversations, because it’s extraordinary.”

Earlier this month, Australian Aviation reported how Virgin Australia staff would soon see two cash bonuses, and some an increase in base wages, in an effort to recognise their efforts and the “ongoing challenges” of the COVID pandemic.

Each staff member would be paid a $500 cash bonus, or 0.5 per cent of their base salary – whichever is higher – in July 2022, in light of the “extraordinarily difficult circumstances of the last 12-months and the challenges yet ahead”.

Hrdlicka revealed the bonuses in an email to staff, which also revealed that Virgin would bring forward payments for half of its 6 per cent profit share scheme to December 2022.

The second half will be paid out in September 2023, based on the airline’s 2023 financial performance.

Virgin has also pledged to fund a 0.5 per cent increase in employee superannuation, as per the 2022-23 federal budget.

Further, cabin crew will see negotiated wage increases come into effect from July – three months ahead of schedule, and crew on lower pay grades see pay rises in line with their higher-paid counterparts.

The TWU welcomed the news and said crew will also benefit from improved rostering conditions due to recently negotiated fatigue management changes.

The union said the bonuses are particularly welcomed in light of current cost-of-living pressures, as inflation continues to increase.

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