Virgin Australia chief executive Jayne Hrdlicka calls it a day after ‘four years of heavy lifting’

Virgin Australia’s high-profile chief executive, Jayne Hrdlicka, has surprised employees by quitting, effectively killing off plans for a May IPO.

Virgin Australia boss Jayne Hrdlicka also holds the position of Tennis Australia chair. Picture: Tertius Pickard

Virgin Australia will begin a global search for a new CEO following the resignation of Jayne Hrdlicka after “four years of heavy lifting”.

Brought in by Bain Capital to replace Paul Scurrah when the US private equity firm rescued the airline from administration, Ms Hrdlicka was expected to lead Virgin Australia to an IPO in May.

But modest profits, low yields and poor feedback about her leadership in high level exit interviews are believed to have put Ms Hrdlicka’s role under pressure, resulting in her surprise decision to leave.

“It is with mixed emotions that today I am announcing that, with the board’s support, I am starting the process of retiring as your CEO,” said Ms Hrdlicka in a note to staff.

She noted that the last four years had been “heavy lifting across the organisation during the toughest of times”, referring to the loss of her husband Jason Gaudin in 2023.

“While there is a lot of continued transformation ahead, I am so excited about this next phase of the journey for Virgin Australia, including the future IPO process,” said Ms Hrdlicka.

“I could not in good conscience, however, commit to the time frame through the IPO process and the journey beyond that, which will be expected by new shareholders.”

An initial public offering of Virgin Australia which was previously listed on the ASX, had been expected in May and inside sources confirmed that would now be pushed back.

In recent months investor relations manager Chris Vagg who had been hired to work on the IPO departed, and chief development manager David Marr who was heading up the IPO strategy stepped down.

Adding to the problems for Ms Hrdlicka, was a detailed JP Morgan research paper examining airline revenue and yields on key domestic and international routes.

The research by analyst Anthony Longo showed Qantas was outperforming Virgin Australia on the majority of routes, and in particular the busy Melbourne-Sydney route – considered one of the most lucrative in the world.

Since the pandemic, Virgin Australia’s yield on Melbourne-Sydney had actually gone backwards by 12.4 per cent, while Qantas had grown its yield by 6.8 per cent.

Virgin Australia’s shift to lower fares and the loss of major corporate clients was considered a factor in the decline, along with sub-par on time performance and an “ongoing struggle with costs”.

It followed the airline’s return to profit last year for the first time in more than a decade, recording an underlying net gain of $129m.

Despite being held up as a great achievement by Virgin Australia, Bain Capital was understood to be less enamoured, given record profits by other airlines including Qantas which posted a $2.5bn result.

A Virgin Australia spokeswoman said they would not be making their result for the six months to December 31 public, but indicated it was a “strong profit”.

Ms Hrdlicka told staff the board would undertake a global search for her replacement which “would include any internal candidates”.

Outgoing Qantas Loyalty boss Olivia Wirth was considered a potential front runner, and it was possible there could even be a push to bring back Mr Scurrah, now head of Pacific National.

“I am committed to helping make sure the transition to new leadership is seamless, and Virgin Australia is well set up to deliver against its considerable potential,” Ms Hrdlicka said.

Board chairman Ryan Cotton said he and the board respected Ms Hrdlicka’s decision to leave, noting she had led Virgin Australia through the most turbulent times of its 20-plus year history.

: Her leadership was fundamental to repositioning the airline back to its roots as a value carrier, returning Virgin Australia to profitability for the first time in 11 years,” Mr Cotton said.

“It has laid a strong foundation for continued growth and margin expansion that will underpin Virgin Australia’s competitive position in the Australian market.”

As well as heading up Virgin Australia, Ms Hrdlicka maintained the role of Tennis Australia chair throughout her tenure, taking a high profile at events such as the Australian Open.

News of her impending departure was received as unexpected by other aviation industry leaders.

Brisbane Airport Corporation CEO Gert-Jan de Graaff said Ms Hrdlicka had been “the right leader at the right time” for Virgin Australia.

“Very few airlines are brought back from life support and Jayne will leave Virgin Australia in a thriving position,” Mr de Graaff said.

Flight Attendants Association of Australia national secretary Teri O’Toole said Ms Hrdlicka had led Virgin through a difficult time, and there had been a lot of pain for employees during that time.

“As always the buck stops with the CEO and I can say that Jayne always took calls at any time of the day or night, and worked towards getting a resolution to issues,” said Ms O’Toole.

“She has had a tough year personally and we can only hope Bain make a sensible choice on her replacement.”

The Transport Workers Union called on Bain Capital to “urgently recommit to promises made to the workforce of Virgin Australia” following news of Ms Hrdlicka’s “sudden retirement”.

TWU national secretary Michael Kaine said the US private equity firm must reassure workers that they would continue to prioritise “long-term, good, secure jobs”.

“While not seeing eye-to-eye straight away, we acknowledge the ongoing work we’ve seen from Jayne Hrdlicka towards meeting the commitments made to workers during the sale to Bain Capital,” Mr Kaine said.

“The recruitment of the next CEO must carefully consider attitudes towards workers and experience collaborating with the workforce to achieve the best results for a business.”

Australian Services Union assistant national secretary Emeline Gaske said their members looked forward to working constructively with a new CEO.

“Virgin, under the current management, has not always valued the contributions of its hardworking staff and has actively fought against the union’s efforts to ensure workers have access to fair pay and conditions,” said Ms Gaske.

“Customer service staff are the heartbeat of an organisation such as Virgin yet the ASU’s reasonable requests for recognition of those workers and the establishment of fair and stable rosters have repeatedly been met with significant resistance.”

Virgin Australia CEO Jayne Hrdlicka has resigned from the position. Picture: Martin Ollma