Bain to take control of Virgin Australia in mid-November

Virgin Australia's new owners will take the stick almost seven months after the airline collapsed.

By David Flynn, November 3 2020
Bain to take control of Virgin Australia in mid-November

Bain Capital aims to finalise its takeover of Virgin Australia around the middle of November, with the airline charting a new course as a mid-market competitor against both Qantas and Jetstar.

Administrator Deloitte struck a $3.5 billion deal to sell the collapsed airline to the US private equity firm on June 26, and hoped to see full ownership transferred by the end of October, but a few final formalities remain.

A Federal Court hearing scheduled for November 10 will consider the transfer of all shares in parent company Virgin Australia Holdings to Bain Capital.

A Deloitte spokesman tells Executive Traveller that step will be directly followed by enacting Chapter 15 of the US Bankruptcy legislation, which is required as many of Virgin's aircraft and engine lessors are based in the US.

"Given the timing of the above, the Administrators will seek to achieve financial close ASAP after both orders are received," the spokesman said, adding that this was likely to take place in the week commencing November 16.

Virgin Australia CEO Paul Scurrah will remain on deck until that "financial close", at which point newly-minted CEO Jayne Hrdlicka – whose controversial appointment was announced last month – will step up.

Virgin's new customer experience takes shape

Meanwhile, Virgin continues to work on its revised 'customer experience' proposition to suit the airline's fresh value-oriented approach.

This will address several hot-button issues such as lounges, inflight meals and Virgin's new business class package.

TBA: Virgin's revised business class experience.
TBA: Virgin's revised business class experience.

"We are committed to providing leisure and corporate customers with best in class service, a comprehensive network of domestic and short-haul international destinations, lounges, and an award-winning loyalty program," a Virgin Australia spokesman told Executive Traveller.

As previously reported, Virgin is weighing the removal of snacks from economy in favour of a buy-on-board model, along with the closure of its elite Club lounges and a reboot of its inflight WiFi product.

Is The Club for the chop?. Source: Supplied
Is The Club for the chop?
Source: Supplied

The airline plans to relaunch with 56 Boeing 737s, pared back from a pre-collapse workhorse fleet of 85, flying to an equally slimmed-down domestic network.

Virgin Australia Chief Operations Officer Stuart Aggs has noted the reboot fleet "allows us to have a solid ramp-up plan when demand returns."

"We intend to grow the fleet to 75+ aircraft in the longer term", Aggs told staff in early September, but said this expansion would be done on a "demand-led" basis.

"To do this, we’ll be taking advantage of the current aircraft market for used 737s. We expect to see opportunities to secure additional aircraft over the coming months when demand returns and we will actively monitor this."

Of the strategy to rebuild using pre-loved Boeing 737s, Aggs said it would "reduce the costs to the business, will make us more competitive and sustainable, and means we avoid holding costs of keeping the aircraft on the ground when we’re not using them."

With its ATR-72 turboprops removed from service, Virgin intends to work closer with Brisbane-based Alliance Airlines for coverage of up to 40 regional routes.

David

David Flynn is the Editor-in-Chief of Executive Traveller and a bit of a travel tragic with a weakness for good coffee, shopping and lychee martinis.

Delta Air Lines - SkyMiles

16 Oct 2017

Total posts 102

Pre-loved = used. By whom I wonder? Does anyone know, does Qantas buy used or all new?

Qantas

19 Apr 2012

Total posts 1134

Tommygun all of Qantas 717s are ‘used’, so they do if they need to.

24 Aug 2011

Total posts 808

In addition to its entire 717 fleet, Qantas has also bought pre-owned 747-400s (ex Malaysian and Asiana) and 767-300s (ex British Airways) over the years.

Virgin Australia - Velocity Rewards

13 Jun 2018

Total posts 8

Flew out of Brisbane yesterday morning and it was chaos at the check in and security.  It is definitely time to open the lounge back up to take some pressure off the security choke point.  Was directed to go to the Qantas security point where a European style queue awaited. By the time I got through that and walked all the way back to gate 47 almost missed the flight.

Yes people could turn up 30 minutes earlier but with no lounge open why would you?

Qantas - Qantas Frequent Flyer

31 Aug 2012

Total posts 196

Not hopeful for clear sky ahead with the hugely disliked Jayne Hrdlicka running the show. How to set up for failure?

08 Feb 2018

Total posts 104

Is she hugely disliked? I thought Jetstar was disliked, not her. Play the ball not the person.

Qantas - Qantas Frequent Flyer

08 Dec 2014

Total posts 44

As opposed to the hugely liked Borghetti and Scurrah who brought the company to its knees?

Qantas - Qantas Frequent Flyer

04 Nov 2017

Total posts 259

Borghetti ended up being largely disliked by many groups and in the media towards the end of his run.  

Though during his run he had the nickname of "Teflon John" whilst his rival AJ copped it.

11 Mar 2012

Total posts 299

Perhaps I've read too much negative Mitt Romney press but I'm more concerned with Bain's end goal here.

Virgin Australia - Velocity Rewards

24 Aug 2011

Total posts 775

Ugh. Ms H is only hugely disliked by trade unionists and their affiliated rent-seekers. 

Qantas - Qantas Frequent Flyer

11 Oct 2014

Total posts 551

Hmm, not so sure. I wonder how opinion would rate if we were to enquire of the A2 Board and management ?

24 Aug 2011

Total posts 808

Most customers wouldn't have a clue who the CEO of the airline was and don't care.

QF

11 Jul 2014

Total posts 533

What a marketing disaster this is turning into, all basic 101 stuff, the only reason could be Bain are still locking in contracts for lounges, catering etc. From the chance of having a head start to being a false start.

21 Jul 2020

Total posts 10

I was all good and confident. I transferred over a bunch of points from different places but now the app is not showing points etc. I’m a little more worried now.

Qantas - Qantas Frequent Flyer

07 Aug 2013

Total posts 203

It provides some reassurance to people who are overly concerned about the level of service they will get - a lot of specualation which will no doubt be laid to rest by year's end on what will be offered to customers, how business class will shape up and the confirming the future plans. 

I for one enjoy hearing how people are jumping ship to QF, more seats and value with less competition for me to take advantage of. 

QF

11 Jul 2014

Total posts 533

Always the optimist Dan22

Thai Airways International - Royal Orchid Plus

15 Jan 2013

Total posts 320

i am old enough to remember when rupert murdoch sold his part of ansett and news limited to air new zealand only to see the kiwis screw it up.i am praying the same does not happen to virgin.

Virgin Australia - Velocity Rewards

06 Mar 2015

Total posts 187

I just hope they hurry up and get full control so that they can implement the style of service they have in mind.

Then and only then will we really know what service or lack thereof we will get.

Until then the appalling Business Class service now being offered is doing a lot of damage to the brand!


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