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Former Jetstar exec to run Virgin as CEO Paul Scurrah stands aside

Business

Paul Scurrah will step down as chief executive of Virgin Australia but the company will not change into a low-cost carrier.

 

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In a statement lodged with ASX, Virgin’s administrators said Surrah would leave at the financial close of the sale transaction to Bain Capital in November and would be replaced by former Jetstar executive Jayne Hrdlicka, which is likely to raise concerns from unions.

Scurrah, who led the airline for only a short period before placing it into administration, said the decision was his.

“The time feels right and I know the business will be in good hands. I have made this decision after some long discussions with my family.

“Jayne has strong aviation credentials. She is very focused in seeing the business succeed and I wish Virgin Australia well under her leadership.

“We have succeeded in not just ensuring the future of the company, but also reset the business to ensure it is well placed to deliver for Bain Capital for many years to come.”

Administrator Vaughan Strawbridge said Scurrah had done an outstanding job supporting the Deloitte team through the process after the company collapsed.

“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.”

The Transport Workers’ Union yesterday suspended negotiations over an enterprise bargaining agreement because of concerns about Scurrah’s future and his likely replacement.

“The TWU is writing to Virgin’s new owners Bain Capital seeking confirmation about changes at the airline and to the Federal Government appealing again for it to protect jobs at Virgin,” TWU national secretary Michael Kaine said.

“This is a serious and worrying development. The ink is not yet dry on the sale of Virgin and it appears that private equity firm Bain Equity are behaving as we feared: ripping out the heart of Virgin and reneging on promises to the Australian people.

“We are suspending negotiations on enterprise agreements while we seek clarification on these developments. For our part, we are engaged in talks in good faith.  If the plan and scope of the airline as outlined in August by Bain Capital has already been scrapped then this is a serious betrayal that must be addressed.”

Transport Workers Union national secretary  Michael Kaine said Virgin was in turmoil over the announcement.

“The workers thought they had a trusted chief executive and Bain have repeatedly said Scurrah had the trust of Bain. We have seen that trust turned on its head. That’s not a good start,” Kaine said.

He said the union was pleased to see that Virgin would not be turned into a low cost carrier but Bain have not said in today’s statement whether they were still going to maintain regional routes or if the workforce numbers, already cut by 4000, would be maintained.

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