10 years of consistent turnaround performance... And one blip.... ?!
Virgin CEO search hits turbulence in final leg
By
Sarah Thompson and
Anthony Macdonald10 Dec 2018 — 12:15 AM
The fasten seatbelts signs are flashing at Virgin Australia
after its search for a new chief executive hit some unexpected turbulence.
Street Talk understands Virgin Australia's board was about to sign off on the appointment of former Hawaiian Airlines boss Mark Dunkerley, before a shocking and unexpected profit result from his former employer late last week prompted one final round of diligence.
Sources said Virgin Australia will ask Dunkerley for a please explain – and as long as he has a good explanation for Hawaiian Airlines' unexpected sales and earnings softness, then he expected to be steering the Australian airline in the new year.
It is understood the first target Virgin Australia had in mind to replace outgoing boss John Borghetti (pictured) was an internal candidate.
It is understood the British born executive has already made plans to move to Australia to run Virgin Australia, but leave his family back in the United States. It means the CEO should have plenty of time to test his company's (and codeshare partners') services across the Pacific.
Dunkerley is said to be motivated by the challenge of running Virgin Australia's hefty P&L – which is fat at the top with almost $6 billion in revenue expected this financial year, but skinny at the bottom line. His job is to try and get more of that revenue flowing through to profit for shareholders.Shareholders are expected to be a big part of the focus. It is no secret that
Virgin Australia is one of the most difficult companies to run in the country, with about 90 per cent of its issued equity owned by a handful of strategic investors. The strategics each have their own reasons for investing in the airline, as do minority investors. Bringing it all together is no easy task.
Sources said it had also not been an easy task for Virgin Australia to get the succession plan right. It is understood the first target they had in mind to replace outgoing boss John Borghetti was an internal candidate – John Thomas – however it didn't work out and he left in the middle of last year.
It has taken another 18 months to (just about) hire the next candidate, Dunkerley, who finished up at Hawaiian Airlines on March 1. His former employer has had a rocky run since he left. Its shares dropped heavily late last week when it revealed much softer-than-expected revenue for November, with weak demand and pricing for travel to and from the holiday destinations.