Hrdlicka’s role comes into sharp focus as Virgin prepares for a relaunch
The role that the former Jetstar boss Jayne Hrdlicka will play in the operation of Virgin Australia is increasingly coming under sharp focus, with a growing number of suggestions in the market that the highly regarded executive could have a hands-on position with the soon-to-be revamped airline.
Ms Hrdlicka worked at Bain Consulting before running the Qantas budget airline offshoot Jetstar and later A2 milk.
She has been working alongside Bain Capital in its efforts to buy Virgin Australia, as first revealed by DataRoom on April 23.
Earlier, it was thought that Ms Hrdlicka would likely emerge as chairman of Virgin Australia under Bain Capital’s ownership or a director, but now the thinking is that her expertise of operating an airline to a tight budget will be more fully utilised once Bain Capital secures control of the carrier following the creditors vote on August 26.
Her non-compete agreement with A2 Milk expired at the end of June.
In May, Bain Australia boss Mike Murphy told The Australian that the private equity firm hoped to keep working with Virgin Australia boss Paul Scurrah but added it was too early to determine who would play what role.
However, the thinking now is that with the tough COVID-19 restrictions in place in Victoria, Ms Hrdlikca’s role with the airline could be more prominent.
Ms Hrdlicka is seen as shrewd when it comes to operating airlines and is known to have ruffled feathers among union representatives when she drove down costs while running Jetstar.
But Bain Capital may be taking a harder look at ways to cut costs as part of efforts to survive the current environment where international travel is suspended and domestic travel is largely off limits for those not only from Victoria but also Sydney.
The Australian reported in July that a key union in the Virgin Australia administration was believed to be pushing new owner Bain Capital to guarantee that Ms Hrdlicka would not have a key role in running the airline following the private equity’s $1.65bn deal struck with voluntary administrator Vaughan Strawbridge to take control of the carrier after it collapsed in April.
She was recently appointed to the board of Hawaiian Airlines and is also chairman of Tennis Australia so some suggest perhaps her schedule is already full.
Bain has already injected about $125m of capital into the airline, which some say has lessened its negotiating power with certain creditors.
However, most now believe that the buyout fund has the deal sewn up and it will be difficult for the airline’s disgruntled bond holders that are owed about $2bn to derail the proposal.
A dilemma for some, such as aircraft lessors, is whether to be paid out as creditors or renegotiate with Bain ahead of the creditors meeting.
Bain or Virgin Australia management are yet to disclose exact details of the business plan under private equity ownership or the amount that will be paid out to the bond holders.
But there has been talk that Bain could offer an update for its Virgin Australia plans in the coming days. Bain is due to make its formal DOCA proposal to the administrator on August 12.
But the bondholders were not set to learn how much they will get until they are given a formal report by the administrators, scheduled on August 19, ahead of their meeting days after.