Merren McArthur rises up ranks in blokes’ world

Merren McArthur sees attitudes changing in the aviation and resources sectors.

Merren McArthur, chief executive of Virgin Australia Regional Airlines and Virgin Australia Cargo. Picture: Hollie Adams.

Merren McArthur was enjoying her Saturday when the phone started ringing. It was Virgin Australia boss John Borghetti and he needed McArthur — who was responsible for network planning, revenue management and alliances at the time — to be involved putting on extra flights to help customers stranded by the Qantas grounding of its entire fleet.

“We created a war room,” McArthur recalls. “We had to do what we could to find planes, find crew, we were on the phone to our alliance partners to say, ‘can you lend us a plane?’, and some of them did.” She didn’t get a lot of sleep but it proved a good chance for Virgin to show the early stages of Borghetti’s “game change” strategy to transform the airline into a full-service carrier.

“It was really challenging but very exciting,” she says.

The 2011 Qantas grounding is not the only episode in McArthur’s almost 10 years with the carrier that she would describe as challenging.

The year prior, she woke up in the early hours one morning to a call from public affairs supremo Danielle Keighery saying the plans for an expanded alliance with Delta Air Lines had been knocked back by the US Transportation Department.

“We had to have board briefings and ASX briefings, a mad flurry of activity, then we had to get on to calls with Delta to work out what our strategy was,” McArthur says.

“I was coming off one of those calls the next morning and I got a text from our competition lawyer here in Australia to say the Air New Zealand alliance has just been rejected. And that one came early, so it was like how is the timing? So of course it put immediately our whole alliance strategy at risk and really put us on the back foot.”

But McArthur, who was responsible for developing the carrier’s international alliance strategy, was determined. “We weren’t prepared to accept that, so we thought we’d take it up to them,” she says. Ultimately the US DoT was convinced to approve the alliance, while Australia’s competition regulator also reversed its stance to give the tie-up with Air NZ the green light.

Aviation might be traditionally male-dominated, but McArthur has seen a shift starting to occur. She started in 2008 as general counsel and company secretary at what was then Virgin Blue after two decades in the law, part of co-founder Brett Godfrey’s executive team.

Now the chief executive of Virgin Australia Regional Airlines and Virgin Australia Cargo, she’s watching attitudes change in the aviation and resources sectors.

“If you come from a male-dominated industry and you start to see some women coming into the industry you straight away would be able to see the benefits that brings in terms of new ideas, new thinking,” she says. “It’s not so much about a gender thing, but a diversity thing.”

She was appointed to run the regional operations in 2013 after Virgin finished its acquisition of Skywest. She’d already moved her four daughters and husband interstate twice to follow her career, so this time she commuted between Brisbane and Perth for two years. The position was daunting, she says, “because I had commercial experience but never had any operational experience”.

As she worked on integrating Skywest and Virgin and growing the charter business, it became apparent that the resources boom was coming off. Part of the response was to simplify the fleet, including selling its old 46-seat Fokker 50 turboprop aircraft, while there were also redundancies. But the regional airlines business has re-signed resources customers and added extra. These include recently winning the tender for the Chevron contract to operate charters to and from Onslow to support the operations of the Wheatstone Oil and Gas project from 2018 to 2022.

Now, McArthur says, “we are definitely starting to see green shoots”, a position in line with the view of Alliance Airlines CEO Lee Schofield, who has also pointed to an improving sentiment.

McArthur was asked by Borghetti to develop a strategy and business case for cargo in 2014. That launched in 2015 as Virgin brought the cargo function in-house when the contract with Toll ended.

She stopped the weekly commute in mid-2015 and based herself in Brisbane to focus on the cargo business launch. She now spends a week a month in Perth.

While the focus in aviation is often on passengers, she’s found at times the cargo can be crucially important. Like the time an operations manager had a customer call about a live organ that needed moving between cities for a major surgery. The manager made calls across the passenger and cargo network, saying to hold a plane if necessary. “Which they did. And that saved someone’s life,” McArthur says.