The biggest union representing Virgin Australia workers has walked away from negotiations with the stricken airline following reports its chief executive, Paul Scurrah, is leaving the company.
The Transport Workers Union national secretary, Michael Kaine, said Scurrah’s exit raised concerns that Virgin Australia’s new owners, Bain Capital, would backslide on commitments to run a full-service airline.
Running Virgin Australia as a budget airline would likely result in even more job cuts at the company, which has already sacked more than 3,000 workers, and limit competition with bigger rival Qantas, potentially increasing airfares.
“The ink is not yet dry on the sale of Virgin and it appears that private equity firm Bain Equity are behaving as we feared: ripping out the heart of Virgin and reneging on promises to the Australian people,” Kaine said on Wednesday.
“We are suspending negotiations on enterprise agreements while we seek clarification on these developments. For our part, we are engaged in talks in good faith. If the plan and scope of the airline as outlined in August by Bain Capital has already been scrapped then this is a serious betrayal that must be addressed.”
The West Australian reported on Wednesday that Scurrah, who was a champion of running a full-service airline, had fallen out with Bain Capital and would be replaced by Jayne Hrdlicka, who was CEO at Qantas budget arm Jetstar and is disliked by unions.
Industry sources told Guardian Australia that Scurrah was set to leave Virgin Australia within weeks but had agreed not to speak about his departure.
Scurrah did not answer directly when asked about the West Australian’s report at a conference held by the Australian Financial Review on Wednesday.
“There’s been ongoing speculation for some and I’ve never been in the habit of commenting on speculation,” he said. A Bain Capital spokesman would not confirm or deny Scurrah’s exit.
Kaine said he wrote to Bain Capital on Wednesday seeking urgent clarification of Scurrah’s position and whether the company would stand by commitments it made in August that include keeping on 6,000 workers.
He said he also wrote to the prime minister, Scott Morrison, asking him to “make any further public money conditional on receiving commitments about jobs and the future direction of Virgin”.
“We want answers from the federal government also on these developments and how it expects to save jobs at Virgin,” Kaine said. “If confirmed it shows how the federal government has stood by and allowed a private equity firm to take over one of Australia’s most valuable assets and renege on commitments.”
Bain Capital declined to comment on Kaine’s allegations.
