Virgin Australia CEO negotiating terms of exit with new owner Bain: sources

[SYDNEY] Virgin Australia Holdings chief executive Paul Scurrah is negotiating the terms of his exit with the airline's new owner Bain Capital, two people familiar with the matter told Reuters.

Mr Scurrah had clashed with Bain about the strategy for Australia's second-biggest airline and wanted to maintain a more premium offering than desired by the US private equity firm, said the people, who were not authorised to speak with media.

They added Mr Scurrah's exit was expected to be announced within days.

Bain still plans to keep Virgin's lounges and business-class offering in contrast to reports that it would become a budget carrier, though not as premium a level as that desired by Mr Scurrah, one of the people said.

The Sydney Morning Herald on Wednesday evening first reported the exit talks.

Virgin and Bain declined to comment.

Reuters was not immediately able to reach Mr Scurrah for comment. He said on Wednesday he was not in the habit of commenting on speculation when asked about rumours he would be replaced, according to The Australian Financial Review.

Unions representing Virgin employees said they were concerned about the possibility of Mr Scurrah's exit and potential plans to move the full-service carrier downmarket.

Employees represented the largest number of creditors after the airline fell into voluntary administration owing nearly A$7 billion (S$6.8 billion) in April. They voted overwhelmingly in favour of the Bain purchase after being told it would remain a full-service competitor to Qantas Airways.

Mr Scurrah, who took over from long-serving boss John Borghetti in March 2019, is highly regarded by staff despite having announced plans to cut one-third of the workforce due to the pandemic.

"He delivers good news and bad in clear terms. There is no lip service," Steve Purvinas, the federal secretary of the Australian Licensed Aircraft Engineers' Association said. "He has the full support of our Association."

Virgin Group spokesman Nick Fox said his company could not comment on speculation about Mr Scurrah's exit but it remained in talks with Bain about investing in the revamped airline and extending its trade mark licence.

REUTERS