Worries for Virgin CEO Paul Scurrah under new owner Bain

As the free snacks run out, it appears Virgin’s new owners and its current CEO are on increasingly divergent paths.

Virgin CEO Paul Scurrah

A powerful union has suspended negotiations with Virgin Australia’s new owner Bain Capital on new enterprise agreements for workers, until the future of CEO Paul Scurrah is clarified.

Concerns have been building that Mr Scurrah is at odds with the US private equity firm over the airline’s market position, and he is unlikely to remain at Virgin Australia.

Despite Mr Scurrah’s repeated assurances Virgin Australia would emerge from administration as much the same airline as it was before its financial collapse, employees said it was becoming apparent Bain wanted to take the carrier down-market.

Stocks of “complimentary snacks” had been allowed to run down to almost nothing, wine stocks were completely depleted, lounges remained closed, and business class passengers were being served 2-minute noodles on flights, despite paying up to $2500 for their seat.

The relocation of former Jetstar CEO Jayne Hrdlicka to Brisbane had also served to heighten the speculation she would be installed in Mr Scurrah’s place, with unions fiercely opposed to her involvement in the airline.

Ms Hrdlicka was snapped getting into a limousine at Brisbane Airport late last month, before being whisked away to quarantine at a private home.

Throughout the administration and sale process, Transport Workers Union national secretary Michael Kaine warned they would take a very dim view of Ms Hrdlicka’s appointment to the board of Virgin, or as CEO.

The service of 2-minute noodles in business class on Virgin Australia may have been the last straw for CEO Paul Scurrah who’s future at the airline is now in question following clashes with new owners Bain Capital. Picture: Facebook.

On Wednesday in response to ongoing speculation about Mr Scurrah’s future role with the airline, the TWU suspended enterprise agreement talks with the company.

Mr Kaine said it was a “serious and worrying development”.

“The ink is not yet dry on the sale of Virgin and it appears that private equity firm Bain Equity are behaving as we feared: ripping out the heart of Virgin and reneging on promises to the Australian people,” Mr Kaine said.

“If the plan and scope of the airline as outlined in August by Bain Capital has already been scrapped then this is a serious betrayal that must be addressed.”

Employees told The Australian Mr Scurrah had suddenly gone quiet in the last fortnight in contrast to his previous active engagement with workers on an intra-airline app.

“Over the past two weeks he has been notably absent from any discussions,” said a worker.

Virgin Australia referred questions from The Australian about Mr Scurrah to Bain.

The Flight Attendants Association of Australia and other unions were expected to follow the TWU’s lead and also suspend EA negotiations.

FAAA secretary Teri O’Toole said they had not been advised of any changes to management.

“We would obviously be very disappointed as would most of the Virgin employees, if Paul Scurrah was not at the helm because he’s certainly a respected leader,” said Ms O’Toole.