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Exclusive Independent Expert Interview – Virgin Australia Strategy Is Not Sustainable And It Never Has Been!

October 19, 2020 Headline News No Comments Email Email

With Paul Scurrah having been dramatically ousted from the post of CEO at Virgin Australia, to be replaced by former Jetstar CEO Jayne Hrdlicka, who has been waiting in the wings for some time, for me it was another highly unusual element in the whole also highly unusual Virgin Australia administration and sale process.

The manner in which Deloitte appeared to be determined from the outset to sell the business to Bain Capital and ultimately how they achieved it, Deloitte not providing the bondholders’ bid to the creditors, Bain Capital being allowed to inject cash into the business even before the sale was complete and it isn’t even yet, well at least not until November, the promises made and broken by Bain Capital and more, were all quite amazing and unusual.

This all caused many questions to be asked across the industry and the world of corporate governance about how this was all being allowed to happen, with ultimately, Bain Capital showing their real colours by kicking out the guy that kept the airline alive in the first place, with Scurrah having said only days before he would be staying!

So, I though what better than to have an eGlobal Travel Media Exclusive Independent Expert Interview, with Dr Warren Staples, an independent expert from RMIT specialising in corporate governance, business ethics, CSR, business and government relations and having taken a particular interest in aviation, and you can see my chat with Dr Staples by clicking on the box below.

What Dr Staples told me was very interesting indeed, including, “Virgin Australia boss Paul Scurrah has been an influential public face and generated significant goodwill in the transition to new owners Bain Capital, with the replacement of Paul Scurrah by ex-Jetstar CEO Jayne Hrdlicka signalling that Bain Capital is looking to slash costs, improve the balance sheet, and exit via listing or making a quick sale – a classic pump and dump strategy.”

With many in the industry convinced that Virgin Australia will soon become a low cost carrier competing with Jetstar, hence former Jetstar CEO Jayne Hrdlicka’s appointment, Dr Staples said, “If Virgin do head down the lowest cost path then it’s hard to see this price war with Jetstar ending successfully for them. It feels like the worst of Australian aviation history repeating, adding also, “In a worrying sign that corporate Australia is perhaps too forgiving, Richard Branson has returned as a 5% shareholder while paying for none of the cost of the previous iteration of Virgin’s failure.”

My fascinating eGlobal Travel Media Exclusive Independent Expert Interview with Dr Staples including much more and when he tells me that the Virgin Australia Strategy is not sustainable and never has been is a MUST WATCH.

A report and interview by John Alwyn-Jones

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