Virgin Australia Announces New CEO

Last year I wrote about my frustrations with Virgin Australia as a long time, very loyal customer. I suggested that the current CEO, John Borghetti, had done as much as he could with the airline, and it was time for someone new to come in and take his place.

Sure enough, not long after, John Borghetti announced he was stepping down in 2020.

Virgin Australia has been on a global search for a new leader since the announcement. The position is a challenging one, partly because of Virgin Australia’s complicated foreign ownership structure. This means that different shareholders have different interests, which I imagine would make it very difficult for a CEO to obtain the approvals necessary to execute their vision!

Virgin Australia has just announced that Paul Scurrah has been appointed as the carrier’s new CEO and Managing Director, to commence in the role from March 25, 2019, which will be the same day that current CEO John Borghetti steps down, nine months earlier than originally planned.

Paul is not currently part of Virgin Australia, so what is his background?

  • He has worked for eight years for various Australian airlines, including Qantas, Ansett Australia (RIP!) and helped establish Regional Express (REX)
  • He also has experience in the tourism industry at both Tourism Queensland, Flight Centre and AOT Holidays
  • More recently he has worked in Australian (non aviation) transport and logistics roles in Aurizon and DP World Australia

So where to for Virgin Australia from here?

I’ve been a strong supporter of Virgin Australia for a long time.

In all of my travels, they remain the airline I have flown the most, and their Velocity frequent flyer program is the program I have (without buying) earned and redeemed the most points in — I’m talking million and millions of points.

But ever since joining OMAAT I’ve argued that Virgin Australia has been at a real crossroads for some time, and that only a new leader with a new vision could implement some of the changes I would like to see in moving the airline forward and out of the rut they are in.

The current and existing issues I see with Virgin Australia include:

  • Their continued refusal to join a global alliance has led to a very complicated structure for lounge access, earning and redeeming points and status acknowledgement
  • Their long haul fleet size remains tiny and they have no new long haul aircraft on order
  • They seem conflicted with their limited A330 fleet between remaining competitive with Qantas on domestic routes between Perth and the East Coast, and growing their new(ish) Hong Kong services
  • They have not announced any concrete plans for the 40 Boeing 737 MAX variants they have on order, the first of which they should start to receive this year
  • The airline made a small profit in the last financial year, while its biggest competitor Qantas is now one of the world’s most profitable airlines
  • Their Velocity frequent flyer program continues to erode value and benefits — a Velocity point is worth a lot less today than it was worth a year ago

I hope Mr. Scurrah promptly reviews and hopefully implements improvements to the above issues.

I recognise it will take some time for someone new to the company to fully understand how it operates. I guess the most pressing issue to commence his tenure with is with regards to the new 737MAX aircraft and how these will both be configured and which routes they will operate.

I am hoping to see a really innovative fully flat business class seat on this aircraft, like what FlyDubai has done with theirs. This would allow them to use this aircraft on services between Perth and the East Coast, freeing up their small A330 fleet to increase Hong Kong operations.

This would bridge the gap in the huge product variation between Virgin’s A330 and 737 (non MAX) business class products.

FlyDubai new business class

An aircraft configured this way may also open up new route options to Southeast Asia (which might not have otherwise warranted an A330 or 777 service) and this aircraft should be great for their sizable Pacific island network.

Bottom line

I respect that John Borghetti did a lot in his time leading Virgin Australia. I’m excited to see what Paul Scurrah can do with a fresh perspective in the airline.

He faces a lot of challenges, but hopefully he has the vision and tenacity to take Virgin Australia to the next level.

Where would you like to see Virgin Australia going in future?

(Tip of the hat to AusBT)

Comments

  1. Excellent Article, I would love to see Virgin Australia make some changes, growth and whatever else it need to bring the brand back especially to compete more with Qantas

  2. Thank you James for this excellent VA coverage! I think this is spot on–like many, I imagine, I shifted my Australian flying to VA once they went full service under John Borghetti. As a kid, the first lounge I ever accessed was the Blue Room Adelaide, just before it became the Virgin Australia Lounge. I’ve been a WP for some years, but the past few have been rough–JB had vision, but he also de-prioritized international network, didn’t stick up for Velocity elites on partner airlines, and put the airline in a bit of a rut operationally. New leadership is just what the airline needs, and my fingers are crossed that Paul can make the changes that need to be made.

  3. James – the potential developments that you suggest Virgin could take up under the new CEO Paul Scurrah are good suggestions.

    I have also done well out of redeeming points for Virgin Business Class to the USA, quite a few times – although these days, availability is soooo crap, you would be hard pressed to find a way to use your points on Virgin Australia metal.

    I attended the press conference via phone, and unfortunately, he really had nothing to announce, not even a general view about the future direction of the airline. At least John Borghetti had a joke about what he would do post-Virgin. Very disappointing. I will monitor Paul’s reign as CEO with much interest, ‘cos he will need to pull a few rabbits out of hats. https://www.2paxfly.com/2019/02/06/john-borghetti-leaves-the-plane-paul-scurrah-announced-as-new-ceo-and-md-of-virgin-australia-group/

  4. Annecdotedly, I’ll begin training to be a flight attendant at Virgin in March as well. Mr Scurrah and myself are both starting at the same time!

  5. VA have significantly bigger problems than confusing lounge access options. There are underlying structural issues they need to address, including how to operate profitably.

    As for the 737 Max – it’s just a new version of the 737. It will fly around their current network. It’s not the Concorde or an A380…

  6. I want them to install seat back entertainment on their 737’s and hopefully they do on their new 737 MAX as Qantas does which to me is a huge advantage especially on Perth – East Coast routes and is just downright lazy and cheap and something that sometimes sways me from VA to QF their own international branded lounges wouldn’t be bad either

  7. James, how do you rate Velocity as a program versus KrisFlyer nowadays? I have a 100k Amex bonus to transfer before the devaluation in April.

  8. @Josh – KrisFlyer is far superior. Many more options including flights in Suites class (if that’s important) as well as on VA. I don’t believe Velocity members can book Suites. On top of that you have a ton of *A options with KrisFlyer that you don’t with Velocity.

  9. I’d rather the new CEO fixes up the inefficiencies within the offices of VA, boosting morale within staff, then followed by sorting out the international networks. The Domestic division of VA is making a profit, however the TigerAir LCC and Short Haul International network are still making losses. Long Haul International is barely breaking even (Long Haul Int’l had a profit downturn due to starting HKG).

    Getting the International Lounge situation in Australia sorted by partnering with No1 Lounges to take over the old EY spaces is a good start, however an Alliance (still very likely to be SkyTeam – the wounds from the NZ bust-up and subsequent agreement with QF is still too fresh) would be likely down the bottom of the new CEO’s priorities.

  10. Let’s be honest. You got lucky earning millions and millions of points because of an error. Your Amex referral link got shared in a newsletter to AFF readers. Nothing to do with you, just dumb luck. So stop showing off about it.

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