Bain Capital takes Control of Virgin Australia

[HS-TQE]

Drama and Popcorn ahead.

With former JQ CEO Hrdlicka overshadowing both Bryan and Scurrah, Bryan may be breathing a sigh of relief, however Scurrah may not.

It's been reported that it's alleged Scurrah is disagreeing with Bain's reneged deal and may revert to their original plain to take VA back to its (U)LCC roots. Spurring rumours that PS may be "moved on".

Bain may be doing a "dog act" by reneging on the plan provided to Deloitte if the allegations are confirmed.

Paywall: Category: <span> </span> | The Courier Mail.

 

[Carrots]

Wowsers. Pass the popcorn indeed!

 

[dajop]

Maybe Rex isn't being so silly after all in looking at a cautious jet expansion into the golden triangle?

 

[freebo]

Virgin boss Paul Scurrah's job in doubt after Bain takeover



"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," Mr Kaine said in a statement.

"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."

Virgin boss Paul Scurrah's exit imminent after Bain takeover

Virgin Australia boss Paul Scurrah is expected to announce his departure from the airline within days following the company's takeover by American private equity firm Bain Capital.

www.brisbanetimes.com.au

 

[jakeseven7]

Drama and Popcorn ahead.

With former JQ CEO Hrdlicka overshadowing both Bryan and Scurrah, Bryan may be breathing a sigh of relief, however Scurrah may not.

It's been reported that it's alleged Scurrah is disagreeing with Bain's reneged deal and may revert to their original plain to take VA back to its (U)LCC roots. Spurring rumours that PS may be "moved on".

Bain may be doing a "dog act" by reneging on the plan provided to Deloitte if the allegations are confirmed.

Paywall: Category: <span> </span> | The Courier Mail.

Wow really?

PS has been on the PR circuit spruiking that Bain is the 'perfect marriage' and that they 'agree with him on everything'?!

Surely this is just all a rumour....

That would be HUGE news.....

 

[RAM]

Wow really?

PS has been on the PR circuit spruiking that Bain is the 'perfect marriage' and that they 'agree with him on everything'?!

Surely this is just all a rumour....

That would be HUGE news.....

Given all the "VA is doomed", "VA will not survive", "Nobody will want to buy" stories the media ran with through to late June - this could well be simply a continuation of the anti-competitor campaign by some other airline & its consultants.

Never did hear anything about the investigation into Q by the authorities for spreading mis-information (from April/May I think it was).

 

[jakeseven7]

Given all the "VA is doomed", "VA will not survive", "Nobody will want to buy" stories the media ran with through to late June - this could well be simply a continuation of the anti-competitor campaign by some other airline & its consultants.

Then why aren't Bain immediately confirming he is still the MD / whatever title they are giving him? its a bit weird....

 

[freebo]

Of course it would be totally out of character if a hedge fund pulled a fast one over an unsuspecting state govt and basically ripped the guts out of VA.

/s

Can see this being an election issue here in qld.

 

[openseat]

It's a big shock, if true. If they are taking VA back to JQ type service with no lounges, etc, then what's the point of being a loyal customer?

 

[TomJones]

A huge Private Equity fund not being afraid to step on some toes to make as much money as possible? I'm shocked to be sitting here.

 

[dajop]

It's a big shock, if true. If they are taking VA back to JQ type service with no lounges, etc, then what's the point of being a loyal customer?

If you draw inspiration from the US market, there are four distinct models, all of which are arguably downmarket from the current VA model:
- Full-ish service + LCC in one plane (UA/DL/AA)
- Selected full service model (JetBlue, who for example have limited routes with MINT business class product)
- Southwest. Consistency across the network, but with some frills (free luggage)
- ULCC - Spirit/Frontier.

Who knows how far down Bain will take VA, my bet is look to either JetBlue or Southwest for inspiration, both are solid carriers with loyal customers.

 

[freebo]

It's a big shock, if true. If they are taking VA back to JQ type service with no lounges, etc, then what's the point of being a loyal customer?

There isn't, ULCC carriers don't care about that, unfortunately for plats with swags of FFP's like me and many others.

 

[jakeseven7]

It's a big shock, if true. If they are taking VA back to JQ type service with no lounges, etc, then what's the point of being a loyal customer?

Highly doubt they would descend to the depths of JQ, for a start JQ have a far lower cost base and would wipe the floor with them. Secondly, there isn't enough room for them there.

EDIT: Actually after re-reading what they are doing to VA staff pay.... maybe they are going for the bottom end of the market?

 

[dajop]

When your competitor has such brand pulling power that they can sell T-shirts with their name written on it for $150 what hope does VA have on competing at the top end of the market?

 

[jakeseven7]

Virgin CEO Paul Scurrah's future in doubt as new owner Bain Capital rumoured to move airline more low-cost


Virgin Australia chief executive Paul Scurrah's job is under question following the airline's takeover by American private equity firm Bain Capital, with a key union concerned the new owner is aiming to put former Jetstar boss Jayne Hrdlicka in charge and turn the airline into a low-cost carrier.

Virgin went into voluntary administration in April, with massive debts as the coronavirus pandemic brought the airline industry to a halt.

But on Wednesday the Transport Workers Union (TWU) said it had suspended negotiations with Bain over a new enterprise bargaining agreement while it sought confirmation about any changes to the airline's management.

Sources say that despite Mr Scurrah's public endorsements of Bain Capital, there have been tensions between him and the new owner, with Mr Scurrah pushing for Virgin to remain a full-service airline under Bain's ownership.

Speaking at The Australian Financial Review's National Infrastructure Summit on today, Mr Scurrah said he would not comment on whether former boss at Jetstar and A2, Jayne Hrdlicka, would be replacing him.

Bain is 'ripping out the heart of Virgin' says union amid fears Virgin Australia CEO could lose his job

A key union is concerned the new owner is aiming to put former Jetstar boss Jayne Hrdlicka in charge of Virgin Australia and turn the airline into a low-cost carrier.

www.abc.net.au

 

[jakeseven7]

Looks like its leaking more definitively now....

Wow..... big news.

But hardly surprising as others have pointed out.

Wonder if the QLD government were given the heads up....

-----

Virgin boss Paul Scurrah exit imminent after Bain takeover, following several senior Virgin executives out the door


Virgin Australia boss Paul Scurrah is expected to announce his departure from the airline within days following the company's takeover by American private equity firm Bain Capital.

Mr Scurrah's imminent exit has heightened fears that Bain will renege on earlier assurances and strip Virgin back to a budget airline with a limited network.

Several well-placed sources, who spoke on the condition of anonymity to discuss confidential matters, said Mr Scurrah and Bain were negotiating his exit today.

A spokesman for Bain, which bought Virgin in a fierce auction after it collapsed into voluntary administration in April owing $6.8 billion, declined to comment on Mr Scurrah's future when contacted today.

'"This [Mr Scurrah's exit] has been widely speculated but the ongoing denials from Bain have until now shut it down," said one company source.

Another said company insiders had expected Bain to replace all of Virgin's senior executives and management, with former Jetstar boss Jayne Hrdlicka - a former Bain executive who advised the firm on its bid for Virgin - expected to play a key role.

"We think they’re going down a budget path, and Paul doesn't have budget carrier experience" the senior management source said.

A suite of senior executives have quietly left Virgin in recent weeks following the approval of Bain's takeover, but their departures have not been announced publicly. That includes chief strategy officer Michael Jones, head of corporate sale Anne Elliot and general manager of alliances and international sales Phil Squires

Virgin boss Paul Scurrah's exit imminent after Bain takeover

Virgin Australia boss Paul Scurrah is expected to announce his departure from the airline within days following the company's takeover by American private equity firm Bain Capital.

www.smh.com.au

 

[RAM]

It's a big shock, if true. If they are taking VA back to JQ type service with no lounges, etc, then what's the point of being a loyal customer?

Anything is possible but I think this is unlikely.

The value in the buyout is VFF.

Operating as a LCC would see the VFF value drop 80+%, so from around $2bn to around $400m.

Large private equity with profitable track records are not known for idiotic decisions.

Possible PS has tried to overplay his hand (If they go, then I'll go) - Bain would not hesitate to say 'there is the door' - that's their approach.

But to go the LCC route would not be financially viable for VA Mk II.

Bain have made it clear that international operations are in the at best distant future (so goodbye that exec team), strategy is now run by Bain (farewell that team) & clearly set out plan to operate as a 'value full service proposition' so goodbye corporate relationship team.

 

[Saab34]

Not many execs around the land are still in the same job at any point in the future post a takeover, new chair etc..The day was always going to come it was just a matter of how he was removed.

Its clear PS sort of wanted what the 737 operation was before this process started. Its now clear that Bain has other ideas.

You won't hear much from him on exit. Usually the payout has many terms attached, usually big dollars also.

 

[jakeseven7]

You won't hear much from him on exit. Usually the payout has many terms attached, usually big dollars also.

Yes - the 4 corners investigation into the Virgin collapse certainly proved that, John Thomas could barely say a thing! And he was exited years ago!

 

[jakeseven7]

Possible PS has tried to overplay his hand (If they go, then I'll go) - Bain would not hesitate to say 'there is the door' - that's their approach.

Possibly because PS kept going on about how he built the 'new' exec team and now they are all being rolled out the door one by one, maybe he did take a stand.... plus a change in direction he didn't agree with?