Virgin Australia union suspends talks, seeking clarity over CEO's future

SYDNEY (Reuters) - A major employee union said on Wednesday it had suspended bargaining talks with Virgin Australia Holdings Ltd VAH.AX, pending clarification from new owner Bain Capital about the status of Chief Executive Paul Scurrah.

FILE PHOTO: Travelers stand at a Virgin Australia Airlines counter at Kingsford Smith International Airport, following the coronavirus outbreak, in Sydney, Australia, March 18, 2020. REUTERS/Loren Elliott/File Photo

Local media reports said Scurrah had clashed with Bain about the strategy for Australia’s second-biggest airline and was trying to steer it away from becoming a budget carrier.

Scurrah said on Wednesday he was not in the habit of commenting on speculation when asked about rumours he would be replaced, according to The Australian Financial Review.

A Virgin spokesman said the airline was not in a position to comment. Bain did not respond immediately to a request for comment.

Transport Workers’ Union national secretary Michael Kaine said in a statement that the lack of clarity over Scurrah’s position was a “serious and worrying development.”

Creditors last month voted in favour of the U.S. private equity group’s purchase of Virgin, a move that will allow it to exit voluntary administration.

Virgin entered administration in April owing A$7 billion (3.9 billion pounds) to creditors after suffering from a sharp plunge in demand because of the coronavirus pandemic.

Before the pandemic, Virgin had spent a decade transforming itself from a low-cost carrier to a full-service rival to Qantas competing for corporate travellers. But that came at the cost of years of losses.

Under Bain's business plan, Virgin plans to cut a third of its workforce as part of an overhaul that will focus on being a domestic and short-haul international Boeing Co BA.N 737 operator.

Scurrah had indicated the airline planned to position itself as a more value-focused option than Qantas but to retain a premium offering to Qantas’ budget offshoot Jetstar.

Reporting by Jamie Freed. Editing by Gerry Doyle