Who is Virgin’s anonymous CEO? Private equity owner elevates an insider to run the airline

The timing couldn’t be more inopportune. Brisbane-based Virgin Australia has named former consultant Dave Emerson as its chief executive just as Cyclone Alfred moves in to cause chaos.

The way forward for Virgin Australia is now clearer with the appointment of a new chief executive. Picture: Dylan Robinson

He’s a chief executive unknown to investors and with no public markets experience.

On Wednesday, as Brisbane geared up for its first cyclone in more than 30 years, Bain Capital-owned Virgin Australia named former consultant Dave Emerson as its new CEO to replace Jayne Hrdlicka. If you’ve never heard of him, you are certainly not alone.

The 58-year-old American moved from Texas to Brisbane in 2021 – just a year after the airline was snapped up out of insolvency for $3.5bn in debt and equity – to be its chief commercial officer.

Multiple airline investors quizzed about Emerson say he was never part of any pre-IPO executive line-up when they met the airline’s leadership amid plans for an initial public offering that never succeeded. When he joined the team he was keen to push Virgin 2.0 down the path of US low-cost carrier Southwest Airlines. He suggested cutting business class and scrapping the airline’s lounges.

Now, fresh from posting a record profit, the business is contemplating a lower profile.

“Virgin was always going to be a tough IPO to get away,” says Hugh Dive, from Atlas Funds Management. “Jayne was always going to be their best bet, though the sale of 25 per cent to Qatar could point to another direction.”

Last week, Doha-based Qatar Airways received Australian government approval to buy a quarter of Virgin, for which it is understood to have paid close to $1bn.

Bain still owns most of the airline and is clearly a seller, even though the Australian aviation market is currently a land of milk and honey for Qantas and Virgin.

The two have been enjoying a domestic duopoly since the collapse of regional carriers Rex and Bonza, and as the global aircraft shortage keeps the threat of serious competition at bay.

Virgin is already structured to allow full foreign ownership of the domestic operations, with the international unit managed through a series of blind trusts that keeps its local ownership at the 51 per cent needed to access Australia’s full bilateral air rights.

Bain, rumoured to have paid $731m in equity for Virgin, had tried to reduce its shareholding through an IPO last year before the equity markets collapsed, making share issues difficult to get away. As an airline that has already lost shareholders their money once, it would have been a tough ask.

And while an IPO is still the official preferred option, Virgin’s biggest shareholder is keeping its options open. One of those options could be increasing its stake.

Apart from being unknown to the market, Emerson is not a known entity to unions, either. Perhaps that works in his favour given Virgin’s first pick for the CEO job, Paul Jones, had to step aside on the eve of being anointed, under pressure from hostile union sentiment. Jones, in his former role at Qantas, had been a key player in the Flying Kangaroo’s decision to illegally fire 1700 baggage handlers.

Jayne Hrdlicka will hand over the reins to new CEO Dave Emerson. Picture: Brendan Radke

Emerson did 20-plus years at management consultant Bain & Co, specialising in aviation, before joining Virgin. His predecessor, Hrdlicka, worked at Bain too, but worked for seven years at Qantas, including running Jetstar.

Emerson might have his work cut out for him to become a respected leader of Australia’s second-biggest airline.

Many at Virgin had hoped their next boss might be a visionary, or at least an Australian. “Mr Beige” is how one staffer described him.

“He is certainly not popular,” said another. “He’s a great move for Vanessa Hudson,” quipped one more, of the Qantas CEO.

And to be sure, Hrdlicka probably would not have won a popularity contest either, but she was a wartime CEO tasked with raising the airline from administration, and had to make a series of tough decisions on costs.

In fact the decision to announce Emerson as the CEO right when the Brisbane-based airline – which had water lapping halfway up its front steps during the last major flood – is gearing up for a cyclone, is tone deaf to the needs of a state facing catastrophe.

But not everyone is a cynic.

Flight Centre founder Graham Turner has dealt with Emerson many times. The two businesses even share a building, and Turner has dealt with Virgin’s next leader over essential issues such as travel agent commissions.

“We see eye to eye,” says Turner. “We know him pretty well. He is a straight shooter and brings a fresh face to the airline industry.

“Having someone from the outside could very well be a positive.”

Originally published as Who is Virgin’s anonymous CEO? Private equity owner elevates an insider to run the airline