New Virgin Australia CEO unveils airline’s future direction, as administrators offer parting remarks
Virgin Australia has become the first major Australian airline to exit voluntary administration, with its new CEO and managing director unveiling its future direction.
On her official first day as Virgin’s boss, Jayne Hrdlicka showed off the airline’s plan resulting from collaboration with staff and combined with detailed customer research.
It includes retaining its core lounges and reimagining the lounge experience, retaining three choices of seating (economy, ‘Economy X’ and ‘business’), leveraging new technology for a simplified check-in and airport experience, and cheaper airfares.
The plan will see the airline compete in its mid-market heartland for guests who want a more premium experience at an affordable and competitive price.
While Virgin will serve all segments of the market, the carrier plans to build its proposition around its longstanding and most loyal guests, which include price-conscious corporate travellers, small-to-medium-sized businesses, premium leisure travellers, and holidaymakers.
The plan’s major elements are:
- A commitment to retain a domestic market share of roughly one third (as was pre-COVID).
- A network of lounges to open as travel demand resumes, with the Brisbane lounge reopening today.
- A new-look Virgin Australia lounge of the future will open in Adelaide in early 2021, which will roll out across the lounge network over time.
- Creating a more accessible business-class offering to better align to the expectations of the cabin’s core customers.
- New self-service and assisted check-in and baggage drop facilities will open at mainline airports.
- The launch of an updated and more integrated Virgin Australia app providing an enhanced guest experience for Velocity Frequent Flyer members.
- A comprehensive network of domestic and regional destinations.
- A commitment to regional Australia, including the restructuring of Virgin Australia Regional Airlines to become a more sustainable and profitable business following a comprehensive business review.
Speaking at Brisbane Airport where she spent her first official day as Virgin’s boss, Hrdlicka said the airline has exited voluntary administration “with a renewed sense of who we are and who we are here to serve”.
“It’s a privilege to join Virgin Australia as CEO at such an important moment, and I’ve spent the past few weeks meeting and listening to our team and hearing their ideas,” she said.
“I’m impressed with their understanding of and passion for our guests, and look forward to their continued input as we work to refine our plans and define our future together.
“The travel environment is changing and so are our customers’ preferences. We know that leisure travellers, small and medium businesses, and many corporates are now emerging from COVID-19 wanting better value.
“They are hungry for flexibility and choice, a trusted brand that resonates with their values, and great prices, along with the premium features they value most.”
Hrdlicka said Virgin’s post-administration plan will ultimately give customers what they value without the big price tag, such as premium lounges, a new and fresh retail offering on board, a choice of cabins, better digital technology and a more streamlined check-in experience.
“We will also continue to deliver our award-winning service, strong network of destinations, an award-winning frequent flyer program and a safe and reliable operation,” she added.
“Australia already has a low-cost-carrier and a traditional full-service airline, and we won’t be either. Virgin Australia will be a mid-market carrier appealing to customers who are after a great value airfare and better service.
“We will continue to evolve our offering for our customers based on data and feedback, but the Virgin Australia experience millions of travellers know and love is here to stay.”
Hrdlicka said the airline has emerged from administration stronger, more competitive and ready to face the challenges ahead.
“We removed an enormous amount of complexity from our business, greatly improved our cost base, and have an extraordinary team on the ground and in the air to deliver our new plan,” she said.
“We are more resilient than ever and have the backing of Bain Capital, who are deeply invested in seeing us succeed over the long term.
“As we have seen with the recent issues with South Australia, the travel market remains uncertain. We are, however, seeing some positive signs of recovery. Borders are beginning to open and a potential vaccine is on the way.
“We expect continued volatility, but as demand recovers, we’ll achieve a market share consistent with our pre-COVID position and continue to invest in, and grow, the fleet in line with increases in demand.
“Shaping our future will be a collaborative effort across the Virgin Australia Group and I’m thrilled to see the genuine excitement from our people about the future of their airline.”
Administrators have their say
Virgin’s lead administrator, Vaughan Strawbridge from Deloitte Restructuring Services, described the process as “one of the most challenging administrations in Australia’s corporate history”.
“This has been a very complex insolvency appointment, further complicated by the fact that the process was undertaken and completed during Australia’s COVID-19 shutdown,” he said.
“Since our appointment on 20 April this year, the approach we have taken, including how the sale was structured, has involved significant amounts of work and innovative approaches to a wide range of tasks and issues, many of which have not been encountered previously in either Australian or international market contexts.
“We have certainly had our fair share of challenges, but we have remained focused – undertaking a process with the objective of ensuring the business continued, to maximise job retention and ensuring the best outcome for all creditors.”
While the administrators’ formal role with Virgin has come to an end, Strawbridge said he and his team will continue to represent the interests of creditors as theyy manage the process to assess claims and make distributions to creditors.
The deeds of company arrangement, which were formally approved by creditors in September, will see unsecured creditors receive between nine and 13 cents in the dollar on their claims from a pool of funds of between $462 million and $612 million.
Bain will also honour the value of all customer travel credits and prepaid flights provided post-administration, and provide continued employment for the majority of employees and pay staff entitlements in full, including for those leaving the business.
Strawbridge said the most challenging part of Virgin’s administration was the human element – “seeing the impact on so many people, their industry in turmoil and the impact on the careers they have chosen”.
“Recognising the human impact of the airline going into administration, we have used this as motivation to make sure we remained one hundred per cent focused on achieving the outcome we have, driving through adversity and challenges as they arose, and there were a lot.” He said.
“While the outcome of the process is extraordinary, as administrators, we do acknowledge it has come at a cost for many Virgin Australia employees who have lost their jobs, and suppliers and creditors who will not receive all of the monies owed to them, and investors who will receive nothing.”
Latest News
Two thirds of Australians support introduction of tourism tax, survey reveals
Can you guess which generation was the most outraged at the news? Hint: It is exactly who you think!
“The consumer really just wanted more classic reward availability” – customers underwhelmed by Qantas FF shakeup
All this consumer wants is to sit behind someone that doesn't push their seat back to near-horizontal levels.
Aussie travellers warned of ‘significant’ visa shifts in destinations including Chile, US and Vietnam
To be honest are biggest advice for having a layover in the US, is just don't.
Profile: Delta CEO Ed Bastian
Bastian says the airline business isn't for the faint hearted. We're sure Alan Joyce would agree!
Final Call: Travel DAZE Exec early birds are about to expire
Much like the auctioneer at the hottest sale of the year, we're giving you one more chance to jump at this deal!
Forget the weekend! Experience Gold Coast launches mid-week travel campaign
Your boss might be a bit bothered if you jet off mid-week, but you'll be the envy of all of your Instagram followers.
Victorian Tourism Industry Council warns of losing tourism dollars to NSW & QLD
Trendy cafe's hidden in CBD laneways can only get so many tourism dollars, clearly!
AIME 2024 rustles up $330m for APAC economy
This figure is a 65 per cent increase on 2023, much alike The Nibbler staff's alcohol consumption.
Amex GBT to purchase CWT for $871m
It's big deals like this that get a firm handshake - hence the sore hands over at the CWT and Amex GBT offices.
Boeing cleanout: CEO, chair to go as safety crisis plagues the manufacturer
CEOs are falling thick and fast these days. We should have started up a bingo game with their headshots in the office.
Star boss resigns, admits retaining NSW casino licence unlikely under his leadership
The CEO resigned after 18 months in the role. 'Another one bites the dust' rumoured to be heard playing in Pyrmont.
Corporate Traveller swings amateur golfers around the globe for World Golf Competition
How're your golf skills? Consider yourself a Tiger Woods or often get quadruple bogeys? We take after the latter.
Corporate travellers to spend big on Melbourne F1 despite financial pressures
Part of the attraction is sick days after the event as corporate travellers suffer creaked necks and blown eardrums.
Bonza officially kicks off Gold Coast-Darwin route
The Flying Purple Thumb is back at it with another route. We swear, we're going to make this nickname stick!
South West Sydney Tourism launches Western Sydney Tourism Awards
Penrith's 3 consecutive NRL premierships wasn't enough? The people of Western Sydney could fill the trophy cabinet more!
Hotels vs. Airbnb: Industry leaders at odds over who should pay accommodation levy
There's not as much gore in the Hotels vs. Airbnb saga as there is in Alien vs. Predator, but it's just as thrilling!
Singapore Airlines revamps premium economy with new menu, amenity kit
Felt Singapore Airlines was lacking "the sauce" (as the kids say). Bolster belief in the carrier's je na sais quoi here.
Business Events Adelaide set for 20th Destination SA event
Destination SA turns 20! Hopefully it's not celebrated with vodka cruisers and vapes like most 20th birthdays.
Boeing’s woes delay massive Virgin Australia order
This delay means Virgin staffers will be without that new plane smell, inspiring us to sell it in a can.
All the winners from the 2023 Qantas Australian Tourism Awards
Somehow missed this news recently? Good thing you're subscribed to our fabulous newsletter!
Corporate international travel from Brisbane up 30% YOY: Flight Centre
Queenslanders seem keen to go somewhere that actually serves good beer! Sorry, we actually like Great Northern.
Amora Brisbane undergoes $30m remodelling, geared up for MICE offerings
When $30m goes into an amazing hotel to get it geared up for MICE offerings, that's amore!
Corporate Travel Management’s CEO Laura Ruffles steps down
CTM confirmed that Ruffles will be stepping down due to a personal health issue, effective immediately.
Qatar Airways crowned World’s Best MICE Airline at World MICE Awards
You could say Qatar Airways really 'nabbed the cheese' with this one! Alright, we'll see ourselves out...
Qantas, Jetstar & Virgin hike airfares as supplier costs inflate
Supplier increases means you'll pay more. It's like pass the parcel, but instead of getting a present, you owe money.
NSW Central Coast wins global sustainability award for promoting ecotourism at ITB
NSW Central Coast jumped the gun on St. Patricks Day and got the green celebrations going early!
PHOTOS: RuPaul’s Drag Race stars hit Kings Canyon for Priscilla’s 30th anniversary
The stars have renamed the iconic spot 'Queens Canyon'. No name change to the adjacent 'Priscilla's Crack', however.
Air NZ to suspend Auckland-Chicago route amid aircraft troubles
Sorry Kiwis, your craving for authentic deep dish pizza will go unsatiated (or you could just fly with another airline).
Tasmanian Premier promises to build the world’s largest chocolate fountain if re-elected
If only sticky 6-year-old children could vote. Then the Tassie Premier would be guaranteed a victory!
The staggering amount invested in 2022/23 Australian tourism projects revealed!
Any guesses on how much it was? We'll give you a hint: It's between $1 and $9 trillion (hope this helps).
Marriott’s Bonvoy Lounge makes it a 5-peat at Formula 1 in Melbourne
If Formula 1 is so good, then why isn't there a Formula 2? Oh there is one... Never mind.
Virgin Australia posts $236m profit, but the outgoing CEO warns of turbulence ahead
Hrdlicka warns of tough times ahead, just after announcing she's leaving. We wonder if there could be a connection!
Ascott opens new 255 room property in Central Sydney
Bored of your bedroom and want 255 new ones to try? The new Ascott property is here to solve this very specific problem!
Work and play at the Radisson RED, Auckland
We aren't going to tell you what order to work and play in, just that you should be looking to do both at Radisson Red.
Swiftonomics 101: Just how much did fans spend travelling to see Taylor Swift?
Thought you'd heard the last of Swift, huh? Not in your Wildest Dreams could Swiftomania go out of Style!
Rex posts a $13.3m turnaround for 1H24, but still at a loss
Rex is slowly making its way back to pre-pandemic form. Much like us with our sporadic attempts at exercise.