Virgin CEO Paul Scurrah says voting down Bain bid will hurt employees

Virgin Australia CEO Paul Scurrah has warned employees have a lot to lose if the sale to Bain Capital is not voted up next week.

Virgin Australia CEO Paul Scurrah (left), Deloitte administrator Vaughan Strawbridge (rear) and Virgin chief customer officer Danielle Keighery preparing to face the media after the company went into administration on April 21. Picture: John Feder

Virgin Australia chief executive Paul Scurrah has warned stood down employees they will lose access to JobKeeper if next week’s creditors meeting votes against the sale to Bain Capital.

Speaking at a Tourism Australia webinar, Mr Scurrah said the size of the workforce and the fleet were also reliant on the deed of company arrangement (DOCA) winning the approval of creditors.

The airline’s 9000 employees represent the majority of Virgin Australia’s creditors and their support will be critical to the vote.

“If the DOCA is voted down, people won’t get access to JobKeeper and it will take longer (to emerge from administration) and we’ll probably end up with less jobs and less aircraft if that’s the case,” Mr Scurrah said.

“But it’s looking pretty good for the DOCA and as of next Friday I think there will be a high level of confidence in the market about our future existence.”

In the event the DOCA is not supported, an asset sale would be undertaken to transfer ownership of Virgin Australia to Bain Capital; a process that could take several months.

Mr Scurrah said there was a “high level of gratitude at Virgin for a company such as Bain to have the courage to come and invest in an airline still in the middle of a pandemic.

“In terms of what customers see, they won’t see much difference at all,” he said.

“You’re going to see an extensive domestic network, we will start flying short-haul international as soon as those borders have reopened (and) we are really keen to re-enter the long-haul international market as soon as it’s in a financial position to support us coming back in. We’re not sure when that will be.”

Most unions were yet to provide recommendations to members ahead of next Friday’s second creditors meeting, as they continued to review the Bain DOCA.

But Australian Licensed Aircraft Engineers Association national secretary Steve Purvinas said his members would be voting in favour of the DOCA as the “smoothest path for some certainty for employees”.

Once the meeting was out of the way, Mr Scurrah said the next challenge facing the aviation industry was to find a way to “safely travel between our states as quickly as possible”.

“While there is no option to go to Bali or Fiji or anywhere else, there is a huge opportunity domestically to make sure we move our own people around our own country, and allow them to fall in love with destinations they may never have been to before,” he said.

“In the short term that opportunity is something to grab hold of and win the hearts and minds of people who might have otherwise been going to Bali or Fiji.”

When international travel did resume, Virgin Australia expected to renew partnerships with airlines such as Etihad, Singapore and Delta with some changes along the way.

“One thing that’s been made very clear to us is we need a more consistent level of service across us and our partners so that people know what to expect when they get on a partner airline,” said Mr Scurrah.

“It’s been pretty good but it would be different what you got on Singapore Airlines as opposed to what you got on Delta. We want to make sure that’s more consistent.”