Virgin Australia disappears from view after Bain Capital acquisition

Update 18.1.21: Virgin eyes ‘former glory after major c-suite appointments

Challenging times for Virgin Australia and its new owners, Bain Capital, which paid $3.5 billion for the broke and battling airline several months ago, but has given the carrier no voice or profile during Australia’s peak summer holiday season. 

All the talk has been left to Alan Joyce from rival Qantas, a polarising CEO who knows the value of a headline, even when what he says is debatable. Case in point, Qantas announcing it is now taking bookings for international flights from July 1, much earlier than initially forecast.

The announcement drew the ire of consumer advocate Choice over cancellation policies and the Australian Government, which effectively declared: “we decide when borders are open”. 

That may be so, but Joyce rides with the punches and is out there aggressively pushing the fact that Qantas is flying passengers and open for business.

His counterpart at Virgin, Jayne Hrdlicka is doing nothing of the sort. The former CEO of low cost carrier Jetstar, owned by the Qantas Group, has stayed mute. She’s said nothing for a few weeks, nor has the airline. 

To this observer its profile is close to an all-time low with the PR, Product and Marketing departments unwilling or unable to create positive noise for the carrier.

Admittedly this continues a longer term trend at Virgin Australia, which never seems to be ahead of the game. For example the last time Virgin Australia posted a press release on its main website media page was September 2018. That’s more than 16 months ago. It’s a really bad look and so easily rectified.

Disturbing to see that this sloppiness has not been addressed under Bain Capital or that the new owners and management don’t want to put their stamp on the operation.

Details matter in every business, no more so than their airline game, and so does cash flow in an industry which operates on wafer-thin margins during the good times and is bleeding cash at the moment.

Bain Capital understand that better than anyone, so it’s hard to decipher their current lack of urgency to drive brand awareness and sales.

The most likely explanation is that they’ve shut everything down ahead of major – and most likely controversial – announcements concerning staffing, market positioning and fleet deployment over the next few months. Early messaging indicates the new Virgin Australia will be a hybrid carrier carrier attempting to service both the budget leisure and business travel markets.

Whatever approach they take, major challenges, the scope of which Bain Capital probably didn’t anticipate when it took control in September, lie ahead. As one high-ranking aviation executive, who has spent time at Virgin, put it in an email:

“It would be logical to think that COVID developments in the last few weeks might give Bain some worries about their purchase of VA. No doubt the deal would have been sold internally within their organisation on a moderate-to-optimistic view of the future (at the time), but the actual experience since the deal was done has been far worse, with a high volume of rapid border closures.

No green shoots in sight, in fact it just gets worse. I have absolutely no knowledge of their internal view but I feel sure they must be worried.

If you are Bain, you only buy airlines like VA in the expectation of selling them again…just the way things work. As it stands, a sale in 2021 is now almost out of the question in my view, so their holding costs will go up.”

“They have a few other options, but none are all that good.”

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