Virgin turns ‘hybrid’
Airline focuses on mix of services
VIRGIN Australia will become a “hybrid’’ airline in an attempt to lure passengers away from both Qantas and Jetstar following the departure of popular CEO Paul Scurrah.
Bain Capital has reaffirmed its commitment to running a mixed corporate and leisure airline following speculation this week it would ditch its business offering.
Strategic Aviation Solutions managing director Neil Hansford said the future of Virgin and its market position remained uncertain.
“It’s going to be a Jetstartype product with a front-end for all the Qantas haters,” he said.
Mr Scurrah quit the airline on Thursday to make way for Jayne Hrdlicka.
He will leave the carrier once ownership is formally transferred to Bain Capital early next month.
Ms Hrdlicka is a former Qantas Group heavyweight who advised Bain during its bid to buy Virgin.
Mr Hansford, a critic of Virgin’s previous strategy to fight for Qantas’ corporate travellers, tipped the airline would only fly domestically and internationally to Fiji and New Zealand. He also questioned how a revamped Virgin Australia would lure loyal travellers away from Qantas, which will continue to fly long-haul international routes.
“The power of the Qantas Frequent Flyer program is recognised as the best frequent flyer program in the world,” he said.
However, Mr Hansford believes the arrival of Ms Hrdlicka will provide a brighter future for the carrier as long as it can walk the tightrope of being a low-fare carrier with an “acceptable premium product”. “It will mean Virgin will be around in some form 12 months from now,” he said.
“She knows that if they’re to survive they must cut the guts out of its costs.
“You’ve got a woman there with a proven ability to run a low-fares airline.
“Her success at Jetstar was pretty outstanding and she knows how Qantas thinks and how it’s motivated.
“Hrdlicka can appreciate the good things in Qantas and what works, but more importantly, what doesn’t work.”
Bain this week praised Ms Hrdlicka’s aviation experience, including delivering “record profits” at Jetstar.
She is expected to drive efficiencies at Virgin, with further job cuts expected.
Those proposed cuts are understood to have contributed to a souring relationship between Mr Scurrah and Bain.
The Virgin CEO had previously committed to the retention of business class and lounges, as well as at least 6000 of the airline’s 9000 employees.
It is understood an internal push to shift Virgin towards becoming a low-cost carrier ultimately led to Mr Scurrah’s resignation this week.