- Speculation is growing that Paul Scurrah may not remain as CEO of Virgin Australia.
- The Transport Workers Union (TWU) confirmed that it had suspended negotiations with the airline until clarity was provided.
- It comes just one months after Bain Capital brought the airline out of administration with a plan to strip it back to a low-cost carrier.
- Visit Business Insider Australia’s homepage for more stories.
A little more than a month after emerging from administration with new owner Bain Capital, Virgin Australia appears to have hit further turbulence.
The Transport Workers Union (TWU) has suspended negotiations with the airline as reports emerge that CEO Paul Scurrah’s tenure is under threat.
“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 [Capital] are behaving as we feared — ripping out the heart of Virgin and reneging on promises to the Australian people,” TWU national secretary Michael Kaine said.
“We are suspending negotiations on enterprise agreements while we seek clarification on these developments.”
The reports suggest that Bain, having butt heads with Scurrah during the airline’s restructuring, is considering replacing him with former Jetstar boss Jayne Hrdlicka. Speculation has it that Scurrah’s preference is that Virgin 2.0 isn’t targeted towards the bottom of the market, flying in the face of Bain’s strategy.
Confirmation either way, however, is difficult to establish. Scurrah himself told the AFR National Infrastructure Summit that the rumour in question had been making the rounds for a while and he wouldn’t comment on it.
A Virgin Australia spokesperson stuck to the same line, telling Business Insider Australia the airline did not comment on speculation. Bain Capital said it had nothing more to add at this time. Neither denied the reports.
The TWU nonetheless is taking it seriously.
“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,” Kaine said.
“If confirmed it shows how the Federal Government has stood by and allowed a private equity firm to take over one of Australia’s most valuable assets and renege on commitments.”
The TWU has drafted two letters accordingly, both seen by Business Insider Australia, addressed to the Prime Minister and to Bain Capital managing director Mike Murphy.
It wants to confirm jobs are safeguarded and wants assurances over Virgin’s future. Specifically, it requests future federal support be “conditional on receiving commitments about jobs” and that Bain clarify “its pre-sale commitments to ensure a strong second airline”.
“The federal government appointed an observer to Virgin’s administration but appears to have done very little,” Kaine said. “Virgin workers, the Australian travelling public and the many businesses which depend on the airline are waiting for answers as to what the future is now.”
More to come.
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