Senior Virgin execs bail out after more Bain restructuring

[jakeseven7]

Another day another game of walk the plank at VA2 / Bain HQ....

Getting ready for the listing no doubt, cutting costs as much as possible. Bain has had to front up more cash to keep VA2 flying.

No idea as to the calibre of the recent group of people fired.


--------------


Another furious round of restructuring at Virgin Australia has been blamed for the loss of a group of senior managers from the chief pilot to the head of revenue.

https://www.theaustralian.com.au/subscribe/news/1/?sourceCode=TAWEB_WRE170_a&dest=https%3A%2F%2Fwww.theaustralian.com.au%2Fbusiness%2Faviation%2Fvirgin-australia-chief-pilot-michael-fitzgerald-the-latest-high-level-loss-for-the-airline%2Fnews-story%2Ff174726886dfb4f071dcae696499439e&memtype=anonymous&mode=premium&v21=dynamic-cold-control-noscore&V21spcbehaviour=append

 

[exceladdict]

Can't get through the paywall but very interesting, It's been a while since I've seen anything about how they're performing. Flying shortly for the first time in a fair while and the virgin flight times and prices weren't competitive.

 

[ozstamps]

(Isn't the spelling BAIL out?)


Maybe they all heard about this! ----

Virgin Australia bondholders urged to sign up for class action​

Virgin Australia bondholders who were displeased by the airline’s sale to private equity firm Bain Capital, have been encouraged to sign up to the class action against the carrier’s former and current directors and senior executives.

The lawsuit will be funded by London firm Balance Legal Capital and led by Corrs Chamber Westgarth. The suit is expected to be filed in Federal Court.

The suit will allege Virgin Australia did not disclose its true financial position in a 2019 prospectus for a capital raising to fund its $700 million acquisition of the Velocity frequent flyer program.

Investors were invited to purchase unsecured notes at $100 each, with a minimum spend of $5000.

The prospectus illustrated that Virgin Australia had incurred losses over the past three financial years and outlined how the company planned to return to profitability.

The plan included cost-cutting to slash $75 million a year, an organisational restructuring, and a supplier to save the airline $50 million annually.

Virgin Australia filed for administration with debts of more than $7 billion, less than six months after the capital raising and the COVID pandemic erupting.

Bain Capital then purchased the airline for $3.5 billion in a deal that saw 6500 bondholders receive between 9 and 13 cents on the dollar, however, this did not sit well with bondholders, some of whom unsuccessfully tried to purchase Virgin Australia during its administration.

Those who purchased unsecured notes in Virgin Australia will be eligible to take part in the class action, according to Balance Legal Capital.

Balance Legal Capital describes its work as “promoting access to justice by supporting litigants who do not have the means or the capability to fund worthy litigation.”

After the sale to Bain Capital was confirmed in September 2020, former Virgin Australia boss Paul Scurrah was let go in favour of previous Qantas executive Jayne Hrdlicka.

Under Hrdlicka’s new management the airline relaunched as a “mid-market carrier” that targeted leisure passengers.

Some of the cuts the airline made include scrapping free in-flight snacks in economy, and an overhaul of business class meals to cheaper meals.

Virgin Australia bondholders urged to sign up for class action - Travel Weekly

Virgin Australia bondholders who were displeased by the airline's sale to Bain Capital, have been encouraged to sign up for a class action.

www.travelweekly.com.au

 

[jakeseven7]

Maybe they heard abut this!

Virgin Australia bondholders urged to sign up for class action​

Virgin Australia bondholders who were displeased by the airline’s sale to private equity firm Bain Capital, have been encouraged to sign up to the class action against the carrier’s former and current directors and senior executives.

The lawsuit will be funded by London firm Balance Legal Capital and led by Corrs Chamber Westgarth. The suit is expected to be filed in Federal Court.

The suit will allege Virgin Australia did not disclose its true financial position in a 2019 prospectus for a capital raising to fund its $700 million acquisition of the Velocity frequent flyer program.

Investors were invited to purchase unsecured notes at $100 each, with a minimum spend of $5000.

The prospectus illustrated that Virgin Australia had incurred losses over the past three financial years and outlined how the company planned to return to profitability.

The plan included cost-cutting to slash $75 million a year, an organisational restructuring, and a supplier to save the airline $50 million annually.

Virgin Australia filed for administration with debts of more than $7 billion, less than six months after the capital raising and the COVID pandemic erupting.

Bain Capital then purchased the airline for $3.5 billion in a deal that saw 6500 bondholders receive between 9 and 13 cents on the dollar, however, this did not sit well with bondholders, some of whom unsuccessfully tried to purchase Virgin Australia during its administration.

Those who purchased unsecured notes in Virgin Australia will be eligible to take part in the class action, according to Balance Legal Capital.

Balance Legal Capital describes its work as “promoting access to justice by supporting litigants who do not have the means or the capability to fund worthy litigation.”

After the sale to Bain Capital was confirmed in September 2020, former Virgin Australia boss Paul Scurrah was let go in favour of previous Qantas executive Jayne Hrdlicka.

Under Hrdlicka’s new management the airline relaunched as a “mid-market carrier” that targeted leisure passengers.

Some of the cuts the airline made include scrapping free in-flight snacks in economy, and an overhaul of business class meals to cheaper meals.

Virgin Australia bondholders urged to sign up for class action - Travel Weekly

Virgin Australia bondholders who were displeased by the airline's sale to Bain Capital, have been encouraged to sign up for a class action.

www.travelweekly.com.au

Oh dear….

 

[antycbr]

group of senior managers from the chief pilot to the head of revenue.

Given that VA lost money hand over fist for years, the loss of the head of revenue may be a positive.

For those who have been in MEL VA domestic, there's lots and lots of pax and loads are good. Whether yield is sufficient is an open question, but VA has rebounded to have a decent percentage of market share.

 

[antycbr]

Oh dear….

Who, exactly, are they suing? Bain purchased the business from the administrator. The corporate carcass of VA 1.0 is still there with all of the debt no doubt. The Administrators made a decision to sell the business to maximise returns to creditors in the order in which they must be padi, so I'm not sure how they can pursue the Bain owned entity that is VA2.0 who have completed the transaction.

The recent win in the High Court by the Administrators in avoiding having to return engines to the US has increased the return to creditors for VA1.0. Nothing to do with VA2.0.

 

[jakeseven7]

Can't get through the paywall but very interesting, It's been a while since I've seen anything about how they're performing. Flying shortly for the first time in a fair while and the virgin flight times and prices weren't competitive.

Bain is apparently on about round 3 of re-capitalising…. Which probably draws to the logical conclusion they are cutting as much into running costs as they can…

 

[ozstamps]

Wikipedia says -

''In 2019, it was recognised as one of Australia's top 10 tax-dodgers earning $18 billion while paying zero tax.''

On 21 April 2020, Virgin Australia Holdings went into voluntary administration, due to the impacts of the COVID-19 pandemic and financial troubles in the years leading up to the pandemic. On 26 June 2020, it was announced that Bain Capital had entered into a sale and implementation deed with administrator Deloitte to acquire Virgin Australia. Creditors agreed to this proposal on 4 September 2020, with the reorganisation and change of ownership completed on 17 November 2020.

Virgin Australia - Wikipedia

en.wikipedia.org

 

[antycbr]

Bain is apparently on about round 3 of re-capitalising…. Which probably draws to the logical conclusion they are cutting as much into running costs as they can…

Source for that claim?

 

[ozstamps]

3 months old but Yankee Jayney clearly does not generate much Executive loyalty, if another bunch of Execs have already all jumped ship this month.

Heavy exodus of brass very many months is always a sign of poor leadership in any company.

Senior Virgin executive quits amid ‘internal review’ of workplace behaviour​

written by Hannah Dowling | November 22, 2021

Virgin Australia’s chief of corporate affairs Moksha Watts has resigned from her role after an internal review of her workplace behaviour commenced.

While it is not currently known what sparked such an investigation, Virgin CEO Jayne Hrdlicka announced Watts’ departure to employees in a memo and added that “grievances of any nature will be taken seriously and we follow due process in investigating in order to be fair to everyone involved”.

Watts was in the role for just eight months, after being appointed under Virgin’s major management reshuffle earlier this year.

According to the memo, sent to Virgin staff and seen by The Australian, Watts came to the decision herself to resign “in the midst of an ongoing international review into her workplace behaviour”.

“She felt it was in her best interests and the best interests of the company to resign,” wrote Hrdlicka.

The resignation comes after Virgin suffered a “significant turnover of staff” in the corporate affairs department, which was overseen by Watts, according to The Australian’s report.

Virgin’s chief people officer Lisa Burquest is set to take over Watt’s responsibilities as interim chief of corporate affairs.“

At Virgin Australia, we work hard to ensure our workplace is a safe and positive workplace for everyone and we strive to live our values every day,” Hrdlicka told employees.

Despite the untoward circumstances of Watts’ departure from the airline, Hrdlicka noted that she “had done a significant and valued job with governments, key stakeholders and crafting the company’s sustainability policy”, since she took up the top communications job in March of this year.

Watts was one of half a dozen new appointments in Virgin’s executive leadership team that were announced in January, following the airline’s exit from administration under new owner Bain Capital.

In fact, all but one of Virgin’s pre-administration executive team survived the major reshuffle, with long-serving COO Stuart Aggs as the last man standing.

Meanwhile, Watts and Hrdlicka worked together previously, when Hrdlicka was CEO at Jetstar and Watts held a senior management role in government, industry and international affairs. Watts later became head of sustainability and industry affairs at Qantas.

Watts’ resignation joins the growing list of recent adjustments to Virgin’s panel of C-suite executives that have sparked controversy.

In June, the airline announced its new chief commercial officer, Dave Emerson. Emerson is notably a 21-year veteran of new owner Bain Capital’s “sister” consultancy firm, Bain & Company.

The move sparked speculation that new owners Bain Capital hoped to keep a more watchful eye on their Australian assets by dropping in a trusted lieutenant.

Later, in September, the new CEO of Virgin’s loyalty program Velocity, Nick Rohrlach, was able to finally complete his first day on the job after a months-long court battle.

According to reports, Rohrlach, the former CEO of Qantas subsidiary Jetstar Japan, had accepted a new senior role at Qantas Frequent Flyer before ultimately taking the job at Velocity.

Qantas then sparked legal action against Rohrlach to enforce a six-month non-compete clause and delay Rohrlach’s move, arguing that the former Qantas Group employee had been exposed to “highly sensitive” information during his onboarding process at its own loyalty program, which the airline feared he would share with rival Virgin upon taking up his new position.

The court process ultimately saw Rohrlach’s start date at Velocity delayed from March to September this year.

Senior Virgin executive quits amid ‘internal review’ of workplace behaviour

Virgin’s chief of corporate affairs Moksha Watts has resigned from her role after just eight months, amid an ongoing review of her workplace behaviour.

australianaviation.com.au

 

[jakeseven7]

Source for that claim?

Simple Flying plus goss up here in Brissy plus the report above they are firing people…

 

[ozstamps]

Who, exactly, are they suing?

'the class action against the carrier’s former and current directors and senior executives.'

 

[jakeseven7]

3 months old but Yankee Jayney clearly does not generate much Executive loyalty, if another bunch of Execs have already all jumped ship this month.

Heavy exodus of brass very many months is always a sign of poor leadership in any company.

Senior Virgin executive quits amid ‘internal review’ of workplace behaviour​

written by Hannah Dowling | November 22, 2021

Virgin Australia’s chief of corporate affairs Moksha Watts has resigned from her role after an internal review of her workplace behaviour commenced.

While it is not currently known what sparked such an investigation, Virgin CEO Jayne Hrdlicka announced Watts’ departure to employees in a memo and added that “grievances of any nature will be taken seriously and we follow due process in investigating in order to be fair to everyone involved”.

Watts was in the role for just eight months, after being appointed under Virgin’s major management reshuffle earlier this year.

According to the memo, sent to Virgin staff and seen by The Australian, Watts came to the decision herself to resign “in the midst of an ongoing international review into her workplace behaviour”.

“She felt it was in her best interests and the best interests of the company to resign,” wrote Hrdlicka.

The resignation comes after Virgin suffered a “significant turnover of staff” in the corporate affairs department, which was overseen by Watts, according to The Australian’s report.

Virgin’s chief people officer Lisa Burquest is set to take over Watt’s responsibilities as interim chief of corporate affairs.“

At Virgin Australia, we work hard to ensure our workplace is a safe and positive workplace for everyone and we strive to live our values every day,” Hrdlicka told employees.

Despite the untoward circumstances of Watts’ departure from the airline, Hrdlicka noted that she “had done a significant and valued job with governments, key stakeholders and crafting the company’s sustainability policy”, since she took up the top communications job in March of this year.

Watts was one of half a dozen new appointments in Virgin’s executive leadership team that were announced in January, following the airline’s exit from administration under new owner Bain Capital.

In fact, all but one of Virgin’s pre-administration executive team survived the major reshuffle, with long-serving COO Stuart Aggs as the last man standing.

Meanwhile, Watts and Hrdlicka worked together previously, when Hrdlicka was CEO at Jetstar and Watts held a senior management role in government, industry and international affairs. Watts later became head of sustainability and industry affairs at Qantas.

Watts’ resignation joins the growing list of recent adjustments to Virgin’s panel of C-suite executives that have sparked controversy.

In June, the airline announced its new chief commercial officer, Dave Emerson. Emerson is notably a 21-year veteran of new owner Bain Capital’s “sister” consultancy firm, Bain & Company.

The move sparked speculation that new owners Bain Capital hoped to keep a more watchful eye on their Australian assets by dropping in a trusted lieutenant.

Later, in September, the new CEO of Virgin’s loyalty program Velocity, Nick Rohrlach, was able to finally complete his first day on the job after a months-long court battle.

According to reports, Rohrlach, the former CEO of Qantas subsidiary Jetstar Japan, had accepted a new senior role at Qantas Frequent Flyer before ultimately taking the job at Velocity.

Qantas then sparked legal action against Rohrlach to enforce a six-month non-compete clause and delay Rohrlach’s move, arguing that the former Qantas Group employee had been exposed to “highly sensitive” information during his onboarding process at its own loyalty program, which the airline feared he would share with rival Virgin upon taking up his new position.

The court process ultimately saw Rohrlach’s start date at Velocity delayed from March to September this year.

Senior Virgin executive quits amid ‘internal review’ of workplace behaviour

Virgin’s chief of corporate affairs Moksha Watts has resigned from her role after just eight months, amid an ongoing review of her workplace behaviour.

australianaviation.com.au

Jayne has some form - ask A2….

 

[ozstamps]

Yes .......................... exactly my comments when she was appointed.

Jayney's A2 Milk history was not impressive at all.

 

[antycbr]

'the class action against the carrier’s former and current directors and senior executives.'

That's interesting. They really should be suing the Administrators for accepting the bid. The directors of the VA2.0 entity are not likely to be found liable for the decisions made by VA1.0 directors.

 

[jakeseven7]

That's interesting. They really should be suing the Administrators for accepting the bid. The directors of the VA2.0 entity are not likely to be found liable for the decisions made by VA1.0 directors.

I didn’t think you could sue senior execs either in this sort of situation…. Seems like everyone but the receptionist is in the firing line in this case!

 

[Matty F]

The class action specifically targets the 2019 capital raising prospectus, which correct me if I’m wrong, but this prospectus has no links to VA 2.0

These types of class actions are also rarely successful, they would need to successfully argue fraud has occurred

The other interesting note from the article mentions VA purchasing Velocity - so the benefits of having the FF program as a seperate entity are no more?

 

[odysseus]

Yes .......................... exactly my comments when she was appointed.

Jayney's A2 Milk history was not impressive at all.

Two sides to that story. And if you want to see unimpressive performance... A2 (outside Jayne's tenure) including their director governance is a textbook example.

 

[jakeseven7]

The other interesting note from the article mentions VA purchasing Velocity - so the benefits of having the FF program as a seperate entity are no more?

The ‘trust’ structure that cannot be touched to ‘protect members’ from the airline collapsing?**

** Apart from the fact the airline forced the trust to loan it tens of millions of dollars to try and prop the airline up just prior to the collapse

Why bother continuing it I guess and Bain will want to sell VA2 with Velocity all tied down into it to extract maximum value.

 

[Matty F]

Once again, delivering gossip and very few facts. I’m sure an entity that depends on VA for survival would hardly need to be “forced”. But enjoy your tabloid drama mate