Virgin Australia CEO Paul Scurrah steps down as new owners deny plans to become a low-cost airline

Former Jetstar and a2 Milk boss Jayne Hrdlicka will take over.
Former Jetstar and a2 Milk boss Jayne Hrdlicka will take over. Photo credit: Getty.

The chief executive of Virgin Australia Paul Scurrah is stepping down from the role, the airline has confirmed.

Speculation had intensified around major changes at the airline as recently as Thursday morning, before the announcement came in the afternoon.

The team of administrators behind the restructure of Virgin Australia released a statement saying Scurrah will step down as chief executive officer and managing director at financial close of the sale transaction to Bain Capital, which is expected to be completed in November.

In a media statement, management also addressed rumours about the company's future, insisting Virgin Australia will be a 'hybrid' airline rather than a budget airline.

"Paul has done an outstanding job supporting us through this process. His exceptional leadership enabled us to stabilise the business and achieve a sale in a timely and orderly manner," said Vaughan Strawbridge from Deloitte Australia, which is overseeing the change of ownership process.

"It is a testament to his leadership that we have been able to complete this sale and the business is well positioned to play its vital role in the rebuilding of the Australian aviation industry and economy more broadly.

"I know there has been speculation about the shape of the airline into the future, and I have reaffirmed with Bain Capital that Virgin Australia will not be repositioned as a low-cost carrier. Virgin Australia will be a 'hybrid' airline, offering great value to customers by delivering a distinctive Virgin experience at competitive prices. This will appeal to the full spectrum of travellers, from premium corporate through to more budget-focused customers."

In March, Virgin Australia announced it would be closing its Aotearoa operations due to the COVID-19 pandemic, with many of the approximately 550 New Zealand-based staff made redundant.

Scurrah described the last 18 months as the most challenging in aviation history.

"I have continued to be so proud of the way my team and our entire organisation has fought to save this airline and to keep competition alive and well in Australia. We have succeeded in not just ensuring the future of the company, but also reset the business to ensure it is well placed to deliver for Bain Capital for many years to come," he said.

Scurrah says the decision to step down came after long discussions with his family.

"The time feels right," he said.

"I am proud of that work that has been completed to date to transition the business and remove complexity, allowing the airline to compete effectively once demand returns."

The press release concluded by confirming rumours that former Jetstar boss Jayne Hrdlicka will take over as CEO. Her appointment will likely further fuel speculation that the airline is looking at the low-cost end of the travel spectrum to turn its fortunes around.

Hrdlicka was in charge of New Zealand-based alternative milk company a2 Milk for 18 months until her sudden departure in November 2019. She then joined the board of Hawaiian Airlines in July.