Hrdlicka to leave VA
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Imagine signing up or creating a burner account just to post this rubbish. Spoiler alert: "woke" doesn't mean what you think it means.
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While I think your Private Equity owners are a little smarter than picking these fools, once they depart, I can guarantee you some names of the past will make an appearance again. Be very afraid the day that happens. This business will continue on its merry go round journey for decades yet. Many still want to get their hands on it, for a second for third time.
So she has now run two airlines into the ground.
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It is an interesting question. Are the best CEOs those that have come up through the ranks having done the hard yards in the business, gaining operational experience along the way and who actually know what matters? Or is it better to select a CEO with vast experience in business, able to examine with fresh eyes to see that "we've always done it that way" is a euphemism for the inability to adapt, evolve and improve? I don't think there is a correct answer, it all comes down to the personality, which makes the selection process fraught with danger.
Why Bain Capital dumped Jayne Hrdlicka as Virgin Australia CEO
Outgoing Virgin Australia CEO Jayne Hrdlicka: the last four years had been ‘heavy lifting across the organisation during the toughest of times’. Picture: NCA NewsWire / Sarah Marshall[img]data:image/gif;base64,R0lGODlhAQABAIAAAAAAAP///yH5BAEAAAAALAAAAAABAAEAAAIBRAA7[/img]
By ROBYN IRONSIDE
- 8:00PM FEBRUARY 23, 2024
Sources close to the 61-year-old have revealed what transpired on Tuesday, and why even direct reports to the CEO were shocked by the announcement she was set to leave.
Virgin employees remain in the dark about the reasons, but it’s understood Bain Capital had been unhappy with her performance for as long as a year.
Late on Monday, the Boston firm that had paid $3.5bn for Virgin in 2020 and installed Ms Hrdlicka as CEO, told her she was out.
“She was shocked, the blood drained from her face and she cried,” said a high-level source.
“She did not see it coming at all, and nor did those around her.”
Former tennis great Andre Agassi with Jayne Hrdlicka at the Australian Open in January. Picture: Tennis Australia/Fiona Hamilton Staff were informed by email, followed by an “eight minute town hall” with Ms Hrdlicka. Virgin Australia chair Ryan Cotton, a Bain Capital partner, could only muster a 60-second video in response to the announcement, where employees noted he “sounded like an AI plant”. Virgin and Bain declined to comment on Friday.
Miami recruitment firm Korn Ferry is in talks with Virgin to find a replacement, suggesting Bain Capital is preparing to recruit from overseas for the job. Ms Hrdlicka only finalised the sale of her Melbourne home last year, after relocating to Brisbane, where Virgin Australia was based.
Bain may now opt for a trade sale, with the IPO widely seen as scuppered. “An IPO was never going to happen,” said a high-level source. “The market conditions weren’t right and Virgin’s figures weren’t close to good enough. Bain will be looking at other options now, such as a trade sale. Private equity firms don’t usually hang around for too long.”
Another source said the worst problem was that Virgin Australia had had a prime opportunity to benefit from Qantas’s recent woes but “was clearly not capable of executing”.
Some continue to point to Ms Hrdlicka’s high profile at the Australian Open in her capacity as Tennis Australia chair as a bugbear for Bain and a distraction from her day job.
Virgin Australia CEO Jayne Hrdlicka at a Senate inquiry in Canberra last year. Picture: NCA NewsWire/Martin Ollman For two weeks, Bain watched as their pick to rebuild Virgin Australia schmoozed with celebrities and politicians at the tennis tournament in Melbourne.Ms Hrdlicka even treated her entire executive leadership team to a night at the Open, as Virgin Australia’s operational and financial performance floundered.
For months, Virgin Australia had trailed even Jetstar in on-time performance, with high cancellation rates and frequent flight delays. Data for January released this week show Virgin Australia falling further behind the Qantas Group, with almost a third of flights arriving late and 5.4 per cent cancelled.
No half-year results were made public after a modest full-year profit of $129m, which amounted to a mere 5 per cent of rival Qantas’s $2.45bn result.
And JPMorgan research delivered a further blow, highlighting that Virgin Australia’s yield on the important Melbourne-Sydney route had gone backwards since the pandemic, after the airline saw 45 of its top 50 corporate accounts jump ship to Qantas.
Sources said it all contributed to a loss of confidence in Ms Hrdlicka by Bain, which dominate the airline’s board.
Adding to the challenges facing the airline was the imminent start of negotiations for a new pilots’ agreement, with the union expected to demand substantial pay rises, after a 15 per cent salary cut post-administration.
A Virgin Australia statement said Ms Hrdlicka would remain in the job until a replacement was found but no one was willing to suggest a time frame.
Jayne Hrdlicka with Anthony Albanese at the Australian Open tennis. Picture: Tennis Australia/Fiona Hamilton On Tuesday, the outgoing CEO said the last four years had been “heavy lifting across the organisation during the toughest of times” and said she had “mixed emotions” about the *decision. It is expected that after leaving Virgin, Ms Hrdlicka will focus on her Tennis Australia role, which is up for renewal next year.
The 61-year-old who previously worked for Qantas, Jetstar and the A2 Milk Company, has two adult sons.
After losing husband Jason Gaudin to cancer last year, Ms Hrdlicka seemed to take a lower profile at Virgin Australia, rarely speaking in public or doing media interviews.
But a senate committee hearing in September provided some insight into the challenges Virgin Australia was experiencing as Qantas’s main rival.
“It is very difficult. Many times there is characterisation of the Australian aviation market as a duopoly. We don’t see it that way,” Ms Hrdlicka told the committee examining the decision to deny Qatar Airways more flights into Australia. “We are a minority player against the 800-pound gorilla in our industry (Qantas). The industry functions more as a monopoly.”
At Thursday’s results, Qantas CEO Vanessa Hudson said she wished Ms Hrdlicka well.
The latest ACCC report on airlines shows Virgin Australia held 31.2 per cent of the domestic market. Qantas and Jetstar held a combined 61.8 per cent.
He announced a restructuring program, to cut costs, and cull heads, how did that go again? Sorry, didn’t costs actually go UP? And barely anyone actually left? Well, you could say he fit in perfect then, much of the same same circus just rolled on.
Preferably they need someone that can just execute and perhaps understand a balance sheet. Male or Female. Koala or Frog. Who cares. Just execute. The opportunity to jump on your competitors weakness has sadly past, dollars on the table, but too distracted to even bother going for it. Could be the Southwest of Oz, but too busy picking fights with employees and customers. Perhaps time to go back to the Red Jets and khaki pants.
I think it would be fair to say, that everyone, be it employees, suppliers, customers, whoever, are getting a bit tiresome of the merry go round turnaround adventure to nowhere. Will Virgin ever make it off the horse? It’s been 15 years and still going in circles.
Last edited by nomess; 23rd Feb 2024 at 09:47.
Live by the sword die by the sword. The place is as toxic and polluted as it has ever been. It’s been a swamp of mediocrity for years.
Message to the board, FIND A LEADER and a true leader that leads by example not just a vain self-absorbed CEO who talks talk but forgets to walk the walk. I know for Virgin it’s a novel idea as it’s something that almost every manager over the last 15 years seems to have missed the point on.
On Scurrah, his run was cut short and there were some issues that didn’t go to plan but the quagmire he inherited stunk like a sewer not to mention the duds he had managing the place. I doubt Bain was his or anyone’s for that matter first choice (except Vaughan's), and what is happening is exactly why.
Respect is a higher value currency than Cash but if the balance tilts to far one way you ALWAYS have problems.
Message to the board, FIND A LEADER and a true leader that leads by example not just a vain self-absorbed CEO who talks talk but forgets to walk the walk. I know for Virgin it’s a novel idea as it’s something that almost every manager over the last 15 years seems to have missed the point on.
On Scurrah, his run was cut short and there were some issues that didn’t go to plan but the quagmire he inherited stunk like a sewer not to mention the duds he had managing the place. I doubt Bain was his or anyone’s for that matter first choice (except Vaughan's), and what is happening is exactly why.
Respect is a higher value currency than Cash but if the balance tilts to far one way you ALWAYS have problems.
PAUL SCURRAH: I think what became obvious to me is that the balance sheet wasn't as strong as it should be. It was something that was vulnerable I think to a black swan event. We often talked about our plans addressing that balance sheet to get us into a stronger position, should something like COVID come along.
He decided that he would pay $700 million for the 35 percent of Velocity that had been sold five years earlier for $355 million, and that he would fund that transaction entirely by raising debt; a $750 million notes issue at 8 percent interest (the notes holders all subsequently took a bath on that). In just that single transaction he managed to send that balance sheet he was so worried about underwater to the tune of over $100 million.
His other "accomplishments" included:
- Overseeing a headcount increase in the course of a 'rightsizing' program that should have been decreasing it.
- Knocking nearly 40 percent off the profitability of the domestic operation.
- Managing to spend $2.70 for every $1.00 of extra revenue gained.
- Delivering VA's worst half-year result since the GFC; that included a 42 percent reduction in EBIT margin
And that was all pre-pandemic, mind you.
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Livvie Worth won't be popping into Jayne's chair.
"Former Qantas loyalty boss Olivia Wirth has spectacularly emerged as Myer’s new executive chairman, as part of a major board shake-up of the nation’s largest department store."
"Former Qantas loyalty boss Olivia Wirth has spectacularly emerged as Myer’s new executive chairman, as part of a major board shake-up of the nation’s largest department store."
