News: VAH UPDATE 1-Virgin Australia CEO negotiating terms of exit with new owner Bain -sources

• CEO had wanted to maintain more premium offering-sources
• Bain plans to keep business class, lounges-source
• Unions concerned about possibility of CEO exit

(Adds comments from union leader, Virgin Group)

Virgin Australia Holdings Ltd (VAH) Chief Executive Paul Scurrah is negotiating the terms of his exit with the airline's new owner Bain Capital, two people familiar with the matter told Reuters.

Scurrah had clashed with Bain about the strategy for Australia's second-biggest airline and wanted to maintain a more premium offering than desired by the U.S. private equity firm, said the people, who were not authorised to speak with media.

They added Scurrah's exit was expected to be announced within days.

Bain still plans to keep Virgin's lounges and business-class offering in contrast to reports that it would become a budget carrier, though not as premium a level as that desired by Scurrah, one of the people said.

The Sydney Morning Herald on Wednesday evening first reported the exit talks.

Virgin and Bain declined to comment. Reuters was not immediately able to reach Scurrah for comment. He said on Wednesday he was not in the habit of commenting on speculation when asked about rumours he would be replaced, according to The Australian Financial Review.

Unions representing Virgin employees said they were concerned about the possibility of Scurrah's exit and potential plans to move the full-service carrier downmarket.

Employees represented the largest number of creditors after the airline fell into voluntary administration owing nearly A$7 billion ($5 billion) in April. They voted overwhelmingly in favour of the Bain purchase after being told it would remain a full-service competitor to Qantas Airways Ltd (QAN) .

Scurrah, who took over from long-serving boss John Borghetti in March 2019, is highly regarded by staff despite having announced plans to cut one-third of the workforce due to the pandemic.

"He delivers good news and bad in clear terms. There is no lip service," Steve Purvinas, the federal secretary of the Australian Licensed Aircraft Engineers' Association said. "He has the full support of our Association."

Virgin Group spokesman Nick Fox said his company could not comment on speculation about Scurrah's exit but it remained in talks with Bain about investing in the revamped airline and extending its trade mark licence.

($1 = 1.4004 Australian dollars)

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Virgin Australia union suspends talks, seeking clarity over 

CEO's future

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