It certainly will be an interesting time for Paul Scurrah.
In my opinion the foundation is there for VA to be a great airline. Love him or hate him, JB has put in place a base to be built on. The Lounges, The J class product (particularly on the Wide Bodies), the Frequent Flyer program, the alliances with some pretty significant overseas airlines to name a few. Overall JB has enacted changing VA from a low cost operator to a full service airline that has a significant Narrow Body fleet, he has doubled the WB fleet, started a Turbo Prop operation, bought a charter / regional jet operation (VARA) and bought a low cost carrier to directly compete with JQ.
All of that being said - quite a lot of issues need to be sorted over the medium term, and this will probably have to be done under Scurrah’s watch.
To start naming a few:
- I believe that the wide body leases for VA aircraft are up in the middle of the 2020s. The decision on WB fleet replacement could be the single most significant capital expenditure decision Scurrah may make. Does he even bother trying to replace the WBs or decide that it isn’t worth the pain? Does he just try and push out the leases for another 5 years, but by that stage the aircraft will be approaching 20 years old? If he consolidates the WB into one type, does he get a few more for further expansion and consolidation into Asia and the US?
- The F100 replacement. I don’t know the specifics but given the engine issues and the limited parts availability for the F100 in general, I can’t imagine these will be around for too much longer. I guess the Alliance flying could also fall under this bracket, as I would assume that if QF ever got a majority stake in QQ, then VA would surely terminate this arrangement. But the question would be who would pick up the not insignificant amount of flying QQ does for VA at the moment. Could it be VARA in QLD too with its own 100 seat jet?
- The 73 Max order - will he exercise the options the company has on additional aircraft? What models will he get - The 73-8 or the -10? If he gets the Max10 - does he be bold and put lie flat seats in it and run those between East Coast and PH (and other longer sectors - say DPS or Pacific) where you could offer a very good J class produc, but not have the significant costs associated with running WBs on 4 hour sectors?
- Is it really worth the bother of running an ATR operation with 6 aircraft?
- Will he give TT fleet replacement the nudge it needs? Will TT expand and take on JQ on the Trans Tasman stuff it does?
- Do the systems in place at VA behind the scenes actually do an adequate job? It seems as though the ability to recover from disrupt at the moment isn’t great.
If you make some of these decisions correctly, you could save the company a fortune. Make that same decision but it turns out incorrectly - then the financial position of the Company could be really hurt. And how does he increase revenue in a very tight market? His time at QR saw customer satisfaction sky rocket - perhaps that is part of the parcel.
Some significant decisions definitely need to be made!
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