Virgin Australia CEO Paul Scurrah to resign after Bain shake-up

Marco Green
October 17, 2020

Paul Scurrah will depart his role as chief executive of Virgin Australia when the deal to sell the carrier to Bain Capital closes.

The decision follows reports that he disagreed with Bain over the future direction of the airline.

"Over the last 18 months, I have had the great privilege of being the CEO and Managing Director of the Virgin Australia Group", Mr Scurrah said in a statement released by Virgin today.

Mr Scurrah joined Virgin in early 2019 and devised a turnaround plan to improve the airline's poor financial performance when the COVID-19 pandemic forced them to set up their fleet and put them in the USA for $ 6.8 billion To drive bankruptcy.

Virgin Australia Holdings Ltd CEO Paul Scurrah will be replaced within weeks by Jayne Hrdlicka, the former head of Qantas' budget offshoot Jetstar, as new owner Bain looks to draw in more travellers with a "hybrid" strategy.

He had reportedly wanted to maintain a more premium offering than the new owners.

Mr. Scurrah's impending exit has heightened fears among Virgin workforce that Bain will forego previous commitments and withdraw Virgin to a low-priced carrier with a limited network, giving Qantas a monopoly on full-service air travel in Australia.

Administrator Vaughan Strawbridge of Deloitte said he had reaffirmed with Bain the full-service airline would not be repositioned as a low-priced carrier.

'We are suspending negotiations on enterprise agreements while we seek clarification on these developments, ' TWU National Secretary Michael Kaine said.

The model would appeal to "the full spectrum of travellers" from corporate to budget, Deloitte said.

In August, Virgin said its aim was to be the "best value" carrier in the market rather than the cheapest, adding it would retain business class and its airport lounges.

"She will know exactly where Virgin Australia needs to be positioned to finally be profitable assuming decent market conditions", Sobie said of Hrdlicka.

Virgin was originally launched as a budget airline, but had spent years transforming itself into a full-service carrier.

However, Virgin posted several years of losses before the pandemic, and had amassed considerable debt.

National carrier Qantas reported an annual loss of almost A$2bn ($1.4bn; £1bn).

Vaughan Strawbridge, the Deloitte administrator that has helped formulate the life-saving Bain deal for Virgin, said the airline's future does not include a holistic shift in the way it operates.

The airline is not expected to shift operationally and become a "low-cost" airline, similar to Tiger Australia.

It was mostly a domestic carrier, but also flew to New Zealand, Bali, Fiji, Tokyo and Los Angeles.

Other reports by Click Lancashire

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