Virgin Australia’s CEO search narrows internal candidates to one, while Bain mulls an outsider

The contest has come down to one internal and one external candidate, after four other Virgin nominees have been told they are no longer in contention.

Virgin Australia chief customer and digital officer Paul Jones is the last man standing in the internal race for the prestigious role of running the nation’s second biggest airline.

Sources confirmed that the four other internal candidates interviewed for the Virgin chief executive role – including loyalty boss Nick Rohrlach and chief financial officer Race Strauss – were delivered the news that they were no longer in contention just over a week ago.

The news brings the chief executive shortlist to two, with the airline’s owner Bain Capital thought to be still considering one other global candidate who is not an Australian. An announcement is expected within weeks.

Among those who were asked and declined to run for the role were two former Qantas executives: Olivia Wirth, who made it to the final two in the running to be Qantas CEO and was pipped at the post by now-boss Vanessa Hudson; and Gareth Evans, who held a number senior roles over 23 years and left in 2022.

The Virgin CEO role is up for grabs because Jayne Hrdlicka, who was appointed to the position by Bain Capital when they snatched the airline from the hands of the administrators in 2020, is leaving earlier than expected. Bain had become frustrated by slumping yields and

Virgin Australia chief customer and digital officer Paul Jones. Picture: Dallas Kilponen

Ms Hrdlicka’s seeming deafness to the unhappiness of pilots, flight attendants and much of senior management, issues which have now improved.

During this all, Ms Hrdlicka had been trying to cope with the increasing illness of her husband who then passed away, and the exhausting process of preparing the airline for a float that slipped out of reach because global equity markets dried up.

With a 2024 IPO now out of reach, Bain is under pressure to quickly find a new leader to front the airline ahead of a 2025 float, or even in the event of a trade buyer such as Qatar Airways.

To that end, Mr Jones may seem a good option as Bain can present him to outsiders as a stable choice and internally he is well liked and therefore his appointment is unlikely to lead to an exodus of staff.

Mr Jones was an early appointment of Ms Hrdlicka’s, who herself is a former Qantas staffer having run budget airline Jetstar.

Mr Jones has worked at Virgin for three years and was the chief operating officer at Qantas before that. He worked at the flying kangaroo for a decade and his experience spans freight and customer and digital strategy.

But elevating him to the top job would not be without controversy. His main claim to fame is that he was in charge of freight and airports when Qantas made the decision to illegally fire 1700 baggage handlers.

While responsibility for that decision ultimately rested with former chief executive Alan Joyce and will also presumably impact Qantas general counsel Andrew Finch, who remains, there is little doubt Mr Jones was part of the conversation.

Virgin Australia’s departing chief, Jayne Hrdlicka. Picture: Bloomberg

Mr Jones was a key witness in the Federal Court case that followed and Justice Michael Lee was damning of his time at the stand, stating he had been “feigning a lack of recollection” and that he fashioned his evidence “to suit what he perceived to be the forensic advantage of his erstwhile employer”.

That kind of response would have all the unions at Virgin on guard if he gets the top gig, but it’s a cost-conscious approach that might please the airline’s private equity owners.

It may not be Mr Jones that gets the gig. The external candidate may still win the job and face the challenge of selling an airline with a controversial past back to the public.

Many a retail shareholder will still be smarting from Virgin’s failure back in 2020. The airline was already on the rocks when the pandemic struck, triggering lockdowns, border closures and the grounding of airlines across the globe.

Since Bain rescued the airline it has made a stellar recovery – posting its first full-year profit in a decade, of $129m for the year ended June 30, 2023, while revenue rose 124 per cent to $5bn.

Airlines including Virgin and Qantas are benefiting from record demand from leisure travellers following the years of pandemic border closures and a bounce back in demand from corporate travellers.

For a while it seemed that Virgin was poised to benefit from intense customer dissatisfaction with Qantas, with the latter winning the unenviable title of the most complained about company for two years running.

But instead the airline’s performance slid, and Qantas under Ms Hudson has been paying fines for its wrongdoings and quietly trying to return to grace.

Perhaps due in part to an improvement in union negotiations, Virgin’s performance has bounced back again, with government numbers showing it was the most reliable major airline in April.

Official data from the Bureau of Infrastructure, Transport and Regional Economics showed Virgin beat Qantas in on-time departures, on-time arrivals, and cancellations. More of that will make for an easier sales process for who ever fronts the airline.

Originally published as Virgin Australia’s CEO search narrows internal candidates to one, while Bain mulls an outsider