Virgin Australia CEO Jayne Hrdlicka flies in former employer Bain
Virgin Australia boss Jayne Hrdlicka has flown in consultants from her former employer Bain & Company to support the airline with its transformation.
Around one year ago, Virgin Australia became Asia-Pacific’s first airline to fall amid the coronavirus, after it was placed into voluntary administration on April 21, with debts of $6.8 billion. The aviation group collapsed after its biggest shareholders, including Richard Branson's Virgin Group and the Federal Government, decline to inject an additional round of funding into the ailing carrier.
Fast forward four months, and US private equity giant Bain Capital, which grew out of the US strategy consultancy giant Bain & Company, snapped up Virgin Australia for $3.5 billion. Having taken the reins, Bain Capital installed the former Jetstar chief executive and former Bain & Company partner Jayne Hrdlicka as CEO.
The news led billionaire Richard Branson, who owns a 5% stake in Virgin Australia through his Virgin Group (making it the second biggest shareholder in the airline after Bain Capital), to state: “I'm delighted that Virgin Australia is ready for take-off once more, soaring out of administration, with a clear future direction to fly towards.”
This new direction builds on a number of strategic pillars, including re-positioning the airline as a mid-service carrier. In a statement, Hrdlicka said the airline will build its proposition around price-conscious corporate travellers, small to medium businesses, premium leisure travellers and holidaymakers.
“Australia already has a low-cost-carrier [Jetstar among others] and a traditional full-service airline [Qantas], and we won't be either,” Hrdlicka said. “Virgin Australia will be a mid-market carrier appealing to customers who are after a great value airfare and better service.”
Another key part of Hrdlicka’s plan is to operate a smaller all-Boeing 737 mainline fleet – the company expects to have between 30 and 60 Boeing 737s in the air by the middle of 2021, depending on demand. Meanwhile, Virgin Australia will downsize its workforce by about a third, with around 3,000 jobs expected to go.
Business transformation
To prepare for the post Covid-19-future, including re-aligning its business model, governance and operations, Virgin Australia has launched a major internal business transformation programme. Several workstreams are being supported by consultants from Bain & Company, led by the head of the firm’s Airlines practice, US-based David Emerson.
According to reports in Australian Financial Review and The Sydney Morning Herald, Bain & Company has a top-heavy team of 5-6 consultants on the job, providing advice on business transformation, procurement and technology. They are being supported by Bain’s global center of excellence for aviation.
The news comes shortly after it was revealed that Hrdlicka spent millions on hiring Bain & Company during her stint at The a2 Milk Company (she led the infant formula and milk company for 18 months). According to some reports, she spent $19 million on Bainees, however, Hrdlicka insisted that only a small portion of that spending went to Bain.
