February 6, 2019 / 2:28 AM / 5 months ago

UPDATE 1-Virgin Australia hires Paul Scurrah as CEO

* Paul Scurrah replaces John Borghetti

* Scurrah has 20-yr background in transport, logistics, travel

* Shares rise as much as 5 pct (Adds market reaction and background)

SYDNEY, Feb 6 (Reuters) - Australia’s No. 2 airline Virgin Australia Holdings Ltd on Wednesday said it had appointed Paul Scurrah as its chief executive officer and managing director, as it charts a return to profit amid signs of slower inbound tourism traffic.

Scurrah, who begins work next month, is taking the helm of an airline which has posted only two annual profits in the past decade and will be looking to build on recent improvements in its balance sheet and domestic business.

With 20 years of experience in the transport and travel industries, he is taking over from John Borghetti as the company’s share price hovers near the 18-month low it hit in January.

Shares in the tightly-held airline rose as much as 5.4 percent on the news, while the broader market rose 0.2 percent.

Virgin has posted statutory losses for six consecutive years although it recorded a return to underlying profit in 2018 and has forecast another underlying profit for the six months to end December.

Virgin is due to report half-year results on Feb. 13.

Trans-Tasman rival Air New Zealand Ltd last week flagged an end to the tourism boom that has lifted it and Qantas Airways Ltd to record profits.

Virgin has a free float of just 9 percent, with the rest held by strategic investors Singapore Airlines Ltd, Etihad Airways, China’s Nanshan Group and debt-saddled conglomerate HNA Group. (Reporting by Tom Westbrook in Sydney and Aby Jose Koilparambil in Bengaluru; Editing by Stephen Coates)

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