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Virgin’s John Borghetti to step down, but not for a while

June 13, 2018 Headline News 1 Comment Email Email

In a surprise move confirmed yesterday, Virgin Australia’s chief executive and managing director John Borghetti is stepping down – though it won’t happen yet.

In a statement to the market reported by various news outlets, Virgin said Borghetti would not renew his contract when it expired on 1 January 2020.

ABC News said he plans to leave earlier than that, giving the airline “ample time” to find a replacement.

“It is a privilege to serve as CEO of the Virgin Australia Group and to lead a wonderful team of 10,000 people,” Borghetti said.

“By notifying the board of my intentions now, it provides them with appropriate time to conduct a thorough recruitment process and for me to support the transition.”

One of the best-known figures in the airline industry, Borghetti was Qantas executive general manager for six years before taking the role of chief executive with Virgin Australia on 8 May 2010.

Borghetti has moved Virgin from a cut-price carrier to a full-service airline, duelling with much larger rival Qantas for premium customers while using wholly-owned subsidiary Tigerair as its low-cost arm.

Borghetti has struck alliance deals with Singapore Airlines, Etihad and Delta – while ownership of Virgin itself has shifted, with Air New Zealand selling its shares. Virgin Australia has a composite ownership – a diverse group of five airlines owns about 90% of it: Etihad, Singapore Airlines, Nanshan, HNA and Richard Branson’s Virgin Group.

Virgin posted a loss of AUD 220 million for the full year ended 30 June 2017, which was better than the previous year’s loss of AUD 261 million.

When Borghetti finally bows out, potential internal replacements include group executive Virgin Australia Airlines Rob Sharp and Tigerair Australia chief executive Merren McArthur. Or it could be somebody from outside.

Written by Peter Needham

John Borghetti

Currently there is "1 comment" on this Article:

  1. AgentGerko says:

    The similarities between VA and Ansett continue to mount. It can’t be a coincidence that JB is bailing within a week of the QF/NZ agreement, which I’ve already said could be the start of the end. Many expected JB to be the CEO of QF but instead the leprechaun got the job and JB got poached. Despite high hopes he has struggled somewhat to make VA the success hoped for. Like Ansett, its a great mob to work for and loved by the staff but just can’t seem to find the right niche. I think one big mistake was never joining Star Alliance, as its current worldwide partnership with SQ and EY doesn’t have enough clout to compete with Oneworld. They’ve stuck a toe into international, mostly without success, to places like Abu Dhabi and Johannesburg. They created a regional network but after dumping their wonderful Embraer jets are stuck with a fleet of slow ATR72’s and leased Fokkers that are no match for QF’s Dash 8’s and B717’s. They bought a low cost Tiger, despite that carrier never making a profit, because someone decided Jetstar needed a competitor. And announcing that yet another $200M+ loss is an improvement doesn’t quite stack up when your competition is making over $1B profit for the same period. It all goes back to the point that Oz really can’t support two international carriers and a domestic carrier needs that international feed-in to bring it passengers. Join Star Alliance Mr Borghetti before its too late. If its not already.

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