- Virgin Australia’s sale to US private investment company Bain Capital is officially complete.
- It comes after the airline went into voluntary administration amid the coronavirus pandemic, appointing Deloitte as administrators.
- Virgin Australia has also appointed a new CEO, former Jetstar boss Jayne Hrdlicka, and outlined its new direction under her leadership.
- Visit Business Insider Australia’s homepage for more stories.
Virgin Australia has become the first major Australian airline to rise out of voluntary administration and has revealed its plans under its new CEO.
The airline’s administrators, Deloitte, announced on Tuesday that the sale of Virgin Australia Group to US private investment firm Bain Capital was complete after a seven month long process.
Lead administrator Vaughan Strawbridge said in a statement it was an “important day for the future of Virgin Australia as Bain Capital takes custody of the airline after one of the most challenging administrations in Australia’s corporate history, not least as a business, an employer of thousands of people, and a key contributor to national and state economies.
“Triggered by the COVID-19 pandemic, it has been a process like no other in Australian corporate history.”
Virgin Australia struggled from the impact of the pandemic on the travel industry. Back in March it was forced to slash domestic travel by 90% and stood down 8000 of its 10,000 employees. It then went into voluntary administration after failing to secure a bailout, and appointed Deloitte as administrators.
In June, Virgin was rescued by Bain Capital, who agreed to purchase the beleaguered airline. Bain then revealed its plan for the airline, which included axing 3000 jobs, discontinuing the budget Tigerair operations and simplifying its fleet.
With the sale now complete, there’s now more certainty for those involved with Virgin Australia.
“This rigorous and competitive administration, restructuring and sale process now provides certainty for employees and customers, a return to creditors, opportunities for suppliers and financiers to continue to trade with Virgin Australia, as well as maintaining a competitive Australian aviation industry for the benefit of consumers,” Strawbridge said.
He added, however, that one of the hardest parts of the administration was seeing the impact it had on so many people. “While the outcome of the process is extraordinary, as administrators we do acknowledge it has come at a cost for many Virgin Australia employees who have lost their jobs, and suppliers and creditors who will not receive all of the monies owed to them and investors who will receive nothing,” he said.
But Virgin doesn’t just have new owners, has a new CEO after Paul Scurrah resigned following 18 months in the role. He’s replaced by former Jetstar boss Jayne Hrdlicka, who is now Virgin Australia’s new CEO and Managing Director.
Here’s what Virgin has planned
Speaking at Brisbane Airport on Wednesday, Virgin’s newly appointed CEO said, “We exit voluntary administration with a renewed sense of who we are and who we are here to serve.”
Under Hrdlicka’s leadership, Virgin plans to retain a domestic marketshare of around one third – the amount it had before the pandemic. It also plans to reopen a network of lounges, continue its domestic and regional networks, create a more accessible business class and roll out new check-in and baggage drop services at major airports.
The airline will introduce hybrid check-in services – a mix of self service and assisted checkouts – throughout major airports by December next year. So far they are currently in Melbourne and Perth. It plans to restructure Virgin Australia’s Regional Airlines to make it more profitable and update its Virgin Australia app.
Hrdlicka highlighted the company’s plan to “give our customers what they value without the big price tag”. “Australia already has a low-cost-carrier and a traditional full-service airline, and we won’t be either,” she said.
“Virgin Australia will be a mid-market carrier appealing to customers who are after a great value airfare and better service. We will continue to evolve our offering for our customers based on data and feedback, but the Virgin Australia experience millions of travellers know and love is here to stay.”
The airline is going to keep its economy, economy X and business class options. However, it plans to review its business class service and relaunch it in 2021. In economy, there will be a “fresh buy onboard menu” instead of the snacks offered earlier this year.
As for its lounges, Virgin will reopen them in Melbourne, Sydney, Brisbane, Adelaide, Perth and the Gold Coast, with COVID-safe measures in place. There will even be new look lounge in Adelaide opening in 2021.
Lounges in Darwin, Cairns and Mackay, however will close due to low visitor numbers, with Canberra’s lounge under review.
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