Fears Virgin Australia will be turned into budget airline after CEO walks

The owner of Virgin Australia, US private equity group Bain Capital, has been accused of misleading Australians over its plans for the airline after replacing the company’s CE with the former boss of a budget operator. Virgin Australia on Thursday confirmed reports that Paul Scurrah was to leave the airline within week, to be replaced by Jayne Hrdlicka, the former CEO of Qantas’s budget brand, Jetstar. The move sparked fears among unions that Bain would walk away from commitments to run Virgin Australia as a full-service airline, keep 6,000 jobs, maintain regional routes and reopen international travel when the coronavirus pandemic permits. In addition to the potential job losses, a weakened Virgin Australia may not be able to compete effectively with the bigger Qantas, increasing the risk of higher airfares. Michael Kaine, the national secretary of key Virgin Australia union the Transport Workers Union, blasted Bain and called on transport minister Michael McCormack, who he said was “perpetually missing in action”, to force the private equity group to live up to its promises. Scurrah was “a tough CEO [but] when he gave his word, he’d stand by it... What we’ve seen at Bain over the last 24 hours has all the hallmarks of slippery private equity doing backroom deals that are not in the public interest,” he said. I think the Australian community has been misled here.” Unions, including the TWU, reluctantly supported the Bain offer after the private equity firm said in August that Scurrah and his team had its support. They supported Scurrah’s plan to cut 3,000 jobs from the airline as the best available deal in the belief that the budget option supported by some Bain executives would result in an airline that was too small and weak to operate effectively. Union leaders also dislike Hrdlicka over her role as CEO of Jetstar, an airline where employees are paid significantly less than at parent Qantas. Story has more.<br/>