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Virgin Australia boss Paul Scurrah to step down, former Jetstar CEO Jayne Hrdlicka to take over

Former Jetstar boss Jayne Hrdlicka will take over as chief executive of Virgin Australia from Paul Scurrah by November.

Former Jetstar boss Jayne Hrdlicka will take over as chief executive of Virgin Australia from Paul Scurrah by November.

Key points:
  • The change at the top of Virgin Australia comes after the airline was sold to US private equity firm Bain Capital
  • The sale process is almost finalised, and incoming CEO Jayne Hrdlicka will take over in early November
  • Bain Capital is still giving assurances that it won't move the airline to a purely low-cost option

Ms Hrdlicka, who was part of Bain Capital's successful bid team to take control of Virgin Australia, was previously chief executive at Jetstar and A2 Milk.

Virgin went into voluntary administration with hefty debts in April, as the coronavirus pandemic brought the airline industry to a halt.

The sale of Virgin to Bain Capital was finalised last month, following commitments to retain as many jobs and services as possible.

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Virgin's administrator Deloitte believes Bain will maintain Virgin as a full-service airline, despite suggestions the US private equity fund plans to make it a low-cost carrier.

Mr Scurrah will leave the airline once the sale to Bain is formally completed early next month, administrator Vaughan Strawbridge said.

He thanked Mr Scurrah for his "exceptional leadership" during the sales process.

"It is a testament to his leadership that we have been able to complete this sale and the business is well positioned to play its vital role in the rebuilding of the Australian aviation industry and economy more broadly," Mr Strawbridge said.

He added that, despite speculation about the shape of the airline in the future, he had reaffirmed with Bain Capital that Virgin Australia would 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," Mr Strawbridge said.

"This will appeal to the full spectrum of travellers, from premium corporate through to more budget-focused customers."

Ms Hrdlicka said she understood airlines and the business.

"I appreciate Virgin Australia's unique culture and I want to protect and build on it," she said in a statement.

"And I am determined that Virgin Australia reinvigorates its strong brand and its passion for customer service, while embracing the diversity, talent and strength of its people."

Outgoing CEO says airline 'in good hands'

Mr Scurrah said his time as Virgin CEO during the past 18 months had been "the most challenging time in aviation history".

Virgin Australia boss Paul Scurrah looks off to the right while standing behind a model plane.Virgin Australia boss Paul Scurrah looks off to the right while standing behind a model plane.
Paul Scurrah says his time as Virgin CEO came during "the most challenging time in aviation history".(AAP: Joel Carrett)

"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," he confirmed.

"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."

Bain Capital managing director Mike Murphy said Mr Scurrah had provided the leadership to allow 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," Mr Murphy said.

But he added that the challenges facing all airlines were "extraordinary, and Virgin Australia requires a different form of leadership to survive in the long term".

"Given the environment, we need a hands-on CEO with deep aviation, commercial, operational and transformation experience," Mr Murphy said.

"Jayne is the right person to take the business forward under Bain Capital's ownership.

"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."

The news of Mr Scurrah's departure is no shock to experts who understand the way Bain Capital operates.

Private equity expert Eileen Appelbaum told ABC News in August that it was unlikely Mr Scurrah would last in the job long under the new owners.

She said CEOs often felt loyalty to their staff and customers, setting up a potential conflict with a private equity firm's desire to make quick money before re-selling a business.

Unions express concerns Bain won't honour its commitments

Mr Murphy said Bain was committed to the strategy Virgin Australia announced in August, when the company outlined its plans to protect thousands of jobs, invest in technology and honour all employee entitlements.

But unions have expressed concerns that the private equity fund may not stick to its promises.

Australian Services Union (ASU) assistant national secretary Emeline Gaske said she was deeply concerned that Bain was reneging on its commitment to keep Virgin a full-service airline.

"The assurance given to 6,000 Virgin employees that their jobs would be safe, was based on commitments made by Bain during the sale process to remain a full-service airline," she said.

"If Bain starts to unwind these commitments and move towards a model of a low-cost carrier, this raises very significant concerns about job security for Virgin workers."

She said Bain had made significant commitments to employees and company creditors during the sale process.

"Any departure from this would be a massive breach of trust by the new owners."

Transport Workers Union (TWU) national secretary Michael Kaine said his union still had serious concerns that Bain would not stick to its commitments regarding keeping regional routes, the international division, 6,000 jobs or fleet numbers.

A middle-aged man talks to microphones with people behind him listening and holding placards.A middle-aged man talks to microphones with people behind him listening and holding placards.
Transport Workers' Union (TWU) national secretary Michael Kaine is worried that US private equity firm Bain Capital won't keep its promises on jobs and services.(AAP: Bianca De Marchi)

"We are seeking a meeting with Bain Capital to discuss these issues and our delegates will decide in the coming days about the future of industrial talks with the airline," he said.

"We sincerely hope that the veil of secrecy and background shenanigans on display over the past few days is not repeated. Trust must be at the heart of Bain's dealings."

He said the Federal Government also needed to hold Bain Capital to account.

"The Federal Government has presided over a model of 'no-strings corporate welfare' where the pay packets of airline executives are protected but aviation workers, regional Australia and businesses in travel and tourism dependent on aviation are cut off," he said.

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