‘No time for celebration’: TWU fires early shots at Bain over Virgin

A Virgin union has hit out at new owner Bain, lambasting a top restaurant celebration as premature and flying in the face of huge layoffs.

Bain Australia CEO. Mike Murphy. Picture: John Feder

A key union representing Virgin Australia workers has hit out at Bain Capital’s Australian chief executive Mike Murphy over a photo of him and his team celebrating the deal to buy the airline.

The picture of the Bain Capital bid team celebrating its successful deal to buy Virgin over drinks at a leading Sydney restaurant, following a deal struck last Friday, come soon after news that Qantas has laid off some 6,000 workers and expectations that Virgin could lay off some 5,000 workers once the Bain takeover is finalised.

“This is not a time for celebration,” Transport Workers Union national secretary Mike Kaine told The Australian on Thursday.

“Workers know that there are tough times ahead at the airline and uncertainty remains over JobKeeper and the future,” he said.

“On the one hand we have bidders celebrating with jobs on the line, and the other hand the federal government is refusing to reveal what assistance it will give to aviation workers because of a by-election.

“Bain must ensure that the management team which it puts forward to work at the airline understands this and keeps the workers and their families at the forefront of their minds.”

Push-back on Hrdlicka

Mr Kaine’s comments come as some unions actively oppose the idea of former Jetstar chief executive Jayne Hrdlicka having a senior role in the administration of Virgin under Bain ownership. Other unions are quietly working behind the scenes to make sure she does not have a leading role in running the airline.

Melbourne-based Ms Hrdlicka was not in the celebration photo, which was taken at a Sydney restaurant.

Published in a tabloid newspaper, the photo of a smiling Mr Murphy, in an open necked shirt, glass in hand, celebrating the deal, which was taken in the days following the Friday agreement, show the private equity negotiating team celebrating a deal which still has a long way to run.

Unions backed Cyrus

Two key unions representing Virgin workers actively supported the rival bid for the airline by New York hedge fund Cyrus, arguing that it would prove to be a better owner of the airline from the workers’ point of view.

The TWU remained neutral on the final two bidders, declaring that it would work with whichever one was chosen to run Virgin.

But the images of the Bain team celebrating their win have provoked new fears of a hard line private equity approach by the Bain consortium which will pay little regard to the concerns of Virgin workers.

While the Bain consortium had said publicly it will retain Virgin chief executive Paul Scurrah in his current role, there are concerns that it could move to take a tougher line on workers once its is the legal owner of the airline – something which is expected sometime in September.

“It is important that Bain honours the commitments it has made and ensures it has the right people leading the Virgin transition,” Mr Kaine said.

“The private equity world may involve a culture of winners and losers, but when thousands of jobs and livelihoods are on the line we expect the gravity of the current situation to be understood and accepted. “

While Bain has signed a legally binding deal with Virgin’s administrator Deloitte’s Vaughan Strawbridge, Mr Strawbridge has to put a proposal for a deed of company arrangement to a meeting of creditors which has to be held by August 18.

The administrator this week formally rejected a proposal by Virgin’s bond holders to recapitalise the airline.

But Mr Kaine said the Bain team was celebrating before the deal had actually been finished with the bond holders’ alternative proposal still being discussed with other parties.

“This process has yet to be completed,” Mr Kaine said.

He said the news that a bidder had finally been chosen last Friday to buy the airline was a “welcome relief to many workers that another important stage in getting the airline back on its feet has been completed.”

But he said the Virgin sale process was “not a normal commercial transaction.”

“It is a community transaction which will affect future generations of Australians.”

He said the federal government needed to ensure that the sale was handled in the right way and that Virgin and its workers got the support they needed, through extended AviationKeeper and other assistance.

Mr Kaine said the union was in discussions with Virgin’s bond holders, who were concerned that the deal with Bain would see them get very little, if anything, of their money back.

“It is hardly surprising that given the behaviour on display and the inaction of the government that the bondholders are finding sympathetic ears,” Mr Kaine said.