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Virgin Australia chief Paul Scurrah resigns

Scurrah
Former Virgin Australia CEO John Borghetti (left) with successor Paul Scurrah. Photo; Virgin

Virgin Australia chief executive Paul Scurrah has resigned effective October 31 and will be replaced by former Jetstar boss Jayne Hrdlicka.

As revealed by Airlineratings.com on Monday Mr Scurrah’s vision of the airline’s future is at odds with new owner Bain Capital, which now wants to take the airline down market.

Unions say that Bain Capital is trying to extract major concessions from staff more in line with a budget airline.

Read: Emirates warns on low fares.

Ms Hrdlicka, also a former Bain executive recently relocated to Brisbane sparking speculation that she would take over from Mr Scurrah.

The US-based funder is due to conclude the $3.50 billion Virgin Australia acquisition on October 31 but some sources in Canberra say that may not happen.

Under the original deal, Bain agreed to keep on 6000 staff, regional operations, tiered cabin classes, airport lounges and the airline’s international arm.

Virgin australia

However, there is growing evidence that many of the promises are being set aside.

Since that deal was inked in June, REX has announced it will enter the jet market between Brisbane, Sydney and Melbourne, the Victorian COVID second wave destroyed any short term recovery in air travel and international border openings are not expected till well into next year.

Bain Capital has so far not responded to requests for clarification on that issue.

In a possible portent of what is to come Virgin Australia has been forced to defend its refreshment packages after stinging criticism from business class passengers, who were served two-minute noodles and a can of coke for a $2500 fare.

In a statement to the Australia Stock Exchange, the Deed Administrators of the Virgin Australia Group (Vaughan Strawbridge, John Greig, Sal Algeri and Richard Hughes – all Deloitte Restructuring Services partners) advised that “Paul Scurrah will step down as Chief Executive Officer and Managing Director at financial close of the sale transaction to Bain Capital, being the completion of the Deeds of Company Arrangements (DOCAs).

Vaughan Strawbridge said: “Paul has done an outstanding job supporting us through this process. His exceptional leadership enabled us to stabilise the business and achieve a sale in a timely and orderly manner.

“It is a testament to his leadership that we have been able to complete this sale and the business is well positioned to play its vital role in the rebuilding of the Australian aviation industry and economy more broadly.”

“I know there has been speculation about the shape of the airline into the future, and I have reaffirmed with Bain Capital that Virgin Australia will not be repositioned as a low-cost carrier. Virgin Australia will be a ‘hybrid’ airline, offering great value to customers by delivering a distinctive Virgin experience at competitive prices. This will appeal to the full spectrum of travellers, from premium corporate through to more budget-focused customers.”

Mr Scurrah said: “Over the last 18 months, I have had the great privilege of being the CEO and Managing Director of the Virgin Australia Group. Whilst it has been the most challenging time in aviation history, I have continued to be so proud of the way my team and our entire organisation has fought to save this airline and to keep competition alive and well in Australia. We have succeeded in not just ensuring the future of the company, but also reset the business to ensure it is well placed to deliver for Bain Capital for many years to come.

“Having seen the company through COVID-19, voluntary administration, the sale to Bain Capital and the redesign of the business, I will be stepping down as CEO and Managing Director at financial close of the DOCAs. I have made this decision after some long discussions with my family. The time feels right, and I know the business will be in good hands.

“I am proud of that work that has been completed to date to transition the business and remove complexity, allowing the airline to compete effectively once demand returns.

“I want to thank all of our team members who have continued to support and work tirelessly to get the company through to this stage. I will forever be proud of what we have done here. It is the people that make this airline the great place it is and I wish them all the best. I was extremely humbled by the warmth with which I was embraced on day one and for the unwavering support afforded to me throughout this ongoing major industry crisis.

“I also want to thank Vaughan Strawbridge and his team at Deloitte as well as our legal and financial advisers for the major achievement and tireless efforts to ensure that Virgin Australia has a future. I won’t forget the support they provided me and the team.

“I have also appreciated working with Bain Capital in recent months and recognise the significant contribution they have made to Virgin Australia’s long-term future. They have demonstrated a deep understanding of aviation and our culture.

“It is the intention that Jayne Hrdlicka will be appointed by Bain Capital as CEO once the transaction is complete, in early November. Jayne has strong aviation credentials. She is very focused on seeing the business succeed and I wish Virgin Australia well under her leadership.”

Bain Capital Managing Director, Mike Murphy said: “Paul has provided the leadership to enable Virgin Australia to emerge from voluntary administration as a well-capitalised, best in class carrier. His personal commitment and determination to lead Virgin Australia through such a turbulent period is a credit to him.”

Union urges Australian PM to clarify Virgin Australia ‘s future

Virgin Australia

The Transport Workers Union has written to the Prime Minister expressing concern that Bain Capital is going to walk away from some of its commitments to keep Virgin Australia a strong second airline.

The TWU has also suspended EBA talks with Bain over reports that current Virgin Australia chief Paul Scurrah has been sacked.

TWU national secretary Michael Kane has urged Mr Morrison not to make any further public money available to Virgin Australia until there is clarification about jobs and future direction for the airline.

READ: Emirates warns of higher fares. 

In Canberra there is also concern that Bain Capital may even scrap the $3.50 billion deal to rescue Virgin Australia which is due to be finalised on October 31.

In the original deal Bain agreed to keep 6000 staff, regional operations, tiered cabin classes, airport lounges and the airline’s international arm.

However, there is growing evidence that many of the promises are being cast aside.

Emails and calls to Bain for clarification on Mr Scurrah’s role and that of the commitment to buy the airline have not resulted in a response.

Today, West Business broke the story of both Mr Scurrah’s departure and the possible appointment of ex Jetstar boss Jayne Hrdlicka as chief executive and the fact that Bain would take the airline down market.

Yesterday Virgin Australia was lashed on social media over the savage in-flight service cutbacks that see business class passengers being served up two-minute noodles.

The TWU has also written to Bain seeking an urgent meeting.

The airline landscape is far tougher than when Bain agreed the rescue in June.

The Victorian second wave fiasco, the emergence of Rex as a domestic jet competitor and new forecasts of lengthy international border closures have soured the business case.

Virgin Australia CEO in departure lounge?

Virgin australia
Virgin boss Paul Scurrah

Virgin Australia chief executive Paul Scurrah is reported to be in the departure lounge according to industry sources in Brisbane as the airline tries to defend serving an 80 cent tub of noodles to a $2500 business class passenger.

The news comes as analysts suggest that Bain Capital will take the airline further down market than expected and former Jetstar boss Jayne Hrdlicka will take over as chief executive.

Yesterday Virgin Australia was lashed on social media over the savage in-flight service cutbacks that see business class passengers being served up two-minute noodles.

It is understood that Mr Scurrah’s vision for the new Virgin Australia is at odds with that of new owners Bain Capital, which appears to now want to take the airline into the budget arena.

Ms Hrdlicka, also a former Bain executive recently relocated to Brisbane sparking speculation that she would take over from Mr Scurrah.

Bain Capital was contacted for comment but did not respond.

The US-based funder is due to conclude the A$3.50 billion Virgin Australia acquisition on October 31.

In a possible potent of what is to come Virgin Australia was yesterday forced to defend its refreshment packages after stinging criticism from business class passengers.

The airline is also out of wine and diet cola, with passengers resorting to bringing their own snacks on board as Bain wields a machete on costs.

In response to the barrage of criticism, some cabin crew are now taking days off because they are sick of the abuse.

And a staff memo also warns that even those meagre stocks are almost exhausted.

“There is limited snacks in the supply chain … and stock will be exhausted in the coming weeks,” the memo said.

It adds that wine will not be replenished.

The snacks offered are the two-minute noodles or a granola bar for business class passengers and a granola bar for economy — but only if they ask for it.

A Virgin spokesperson said the airline was taking measures to protect its passengers — including offering a limit onboard service — by minimising the risks associated with COVID.

But the spokesperson added that “as travel demand begins to increase we are exploring the possibilities for our onboard business class offering, whilst continuing to prioritise the safety and wellbeing of our guests and crew.

Qantas returned to an almost full service last month and will likely corner the business class market, especially on transcontinental flights to and from Perth

Virgin Australia slashes service levels

Virgin Australia
A 80 cent cup of noodles for a $2500 business class fare!!

Virgin Australia is out of wine, diet coke and passengers are bringing their own refreshments on board as the airline’s management, under new owners Bain Capital, cut service levels to well below those of a budget airline.

In response to a barrage of criticism, some cabin crew are taking days off because they are sick of the abuse from passengers.

Documents sighted by Airline Ratings reveal the meagre offerings being presented to passengers and there are warnings that even those stocks are almost exhausted.

The Virgin Australia staff memo says, “there is limited snacks in the supply chain …..and stock will be exhausted in the coming weeks.”

It adds that wine will not be replenished.

The snacks are two-minute noodles – which costs just 80 cents – or a Granola bar for business class and the Granola bar for economy but only if they ask for it.

The one-way transcontinental business class fare is about $2500.

Defending the offering a Virgin Australia spokesperson said “the safety and wellbeing of our guests is always our top priority and we have a variety of safety measures throughout our customer journey to minimise risks associated with COVID-19, including a limited-service onboard.

This service includes a snack and drink for all guests across both cabins and is designed to minimise contact between guests and crew.

“As travel demand begins to increase we are exploring the possibilities for our onboard Business Class offering, whilst continuing to prioritise the safety and wellbeing of our guests and crew. We look forward to providing this limited Business Class offering to our guests soon.

“We are also re-imagining what our onboard catering offer will be longer-term, and are looking forward to developing a new experience to suit customer needs.”

Qantas returned to an almost full-service last month and will likely corner the business class market, especially on transcontinental flights to and from Perth.

Emirates warns of limits on cheap fares

Emirates
An Emirates A380

Capacity constraints will limit the cheap fares that airlines can offer coming out of COVID-19 according to Emirates – the world’s largest international airline.

Emirates divisional vice president Australasia Barry Brown said: “there will be a lot less capacity than we had in the market pre-COVID, so I think there will be seats that offer a great deal for passengers but then there’ll be stepped increases to at least try and make the flights profitable for us.”

Pre COVID, Emirates had 100 flights a week into Australia, now it’s just 10 and they are all capped to uneconomic levels.

READ: New research uncovers just 44 COVID-19 cases of in-flight transmission.

Those caps have recently been lifted to as many as 62 on inbound Perth flights but that is about 300 less than the full capacity of a 777-300R used on the route. Mr Brown urges the government to speed a further easing of the caps.

“The corporate sector wants to get going again, particularly from Western Australia”.
“The mining sector – for instance – wants to get to Africa and back and it is proving a challenge,” Mr Brown said.

“Our corporate focus groups tell us that they want to get travelling again and while video conferencing is great, but you can’t beat a face to face meeting.”

“I think governments are starting to say we need the economies to start kicking over. So hopefully they can find a way that we can start operating back to where we were pre-COVID in the not too distant future,” he said.

Mr Brown denies the fare gouging tag put on airlines and says many of the airline’s passengers are in economy class.”

He says Emirates was one of the first airlines to introduce widespread refunds to passengers and also the first to introduce COVID-19 travel insurance for travellers.

And Emirates is leading the way – with Qatar Airways – in reconnecting the globe. From November 4th the airline will be flying to 99 destinations, 31 of which are in Europe.

And of those destinations, 14 will be operated by the A380 superjumbo.

Underscoring Emirates drive to reconnect the globe its Dubai – Heathrow route is now the world’s busiest international service but still well down on last year.

Putting scale to the COVID downturn the latest figures from the Official Airline Guide report that the top 20 international routes are down 64 per cent on the same time last year.

But re-starting services is a step by step process, particularly to and from Australia and New Zealand warns Mr Brown.

“It’s a bit like starting with a new airline startup. How do we approach the market? It’s just going back to the basics.”

Onboard Emirates has been at the forefront of crew and passenger health innovations.
“Passengers feel relatively safe on us, Mr Brown said.

“We’ve put another crew member on board to sanitize the lavatories every 45 minutes but we have closed our renowned onboard lounge and also our showers.”

Airbus delivers its 10,000th A320 family aircraft.

Airbus
Photo: Airbus

Airbus marked a significant milestone this week when it handed over its 10,000th A320 family aircraft to Middle East Airlines.

The A321neo with manufacturer serial number (MSN) 10,000 took MEA’s fleet to 18 aircraft and coincided with the airline’s 75th anniversary.

MEA, which also took delivery of the 5000th A320 family aircraft in 2012, was unable to celebrate the delivery of the aircraft in Beirut because of the crisis in Lebanon but chairman  Mohamad El Hout described the milestone as “a ray of light, hope and motivation to surpass our nation’s difficulties”.

READ: New research uncovers just 44 cases of inflight COVID-19 transmission.

It took Airbus 23 years of A320 family production to reach the first 5000 aircraft and just eight years to reach the next 5000.

The manufacturer attributed this to the advancement in its production capabilities as well as the popularity of the more efficient, re-engined neo members of the family.

“Delivering MSN10,000 is a milestone that demonstrates the success of the A320 Family and we thank our customers globally for their confidence in our products,” said Airbus chief commercial officer Christian Scherer.

MSN 10,000 is MEA’s third A321neo and it will be taking another six in the coming months. It comes as Airbus said its September deliveries were the highest during the pandemic as it battled to keep its factories running.  It delivered 57 jets for the month compared with 39 in August.

The plane is powered by Pratt & Whitney’s PurePower PW1100G-JM geared turbofan engines and is configured in a comfortable two-class layout with 28 seats in business and 132 seats in economy class.

It is also equipped with the latest generation in-flight entertainment system and high-speed connectivity.

Incorporating the latest engines, aerodynamic advances, and cabin innovations, the A321neo offers a reduction in fuel consumption of 20 percent as well as a 50 percent noise reduction.

 

 

Atlanta retained airport crown before the empire fell

airport
Photo: Wikipedia

Hartsfield-Jackson Atlanta International Airport remained the world’s busiest airport by passenger numbers in 2019 as a still-growing aviation industry hurtled towards disaster.

It was followed by Beijing Capital International Airport, which retained the second spot on the Airports Council International’s top 10 rankings.

Los Angeles International Airport moved ahead of Dubai to take the third spot and relegate the Gulf airport to fourth position.

READ: New research uncovers just 44 cases of COVID-19 transmission.

Tokyo Haneda (fifth), Chicago International (sixth)  and London Heathrow  (seventh) all retained their previous positions.

Up and comers were Shanghai Pudong, which moved up a ranking into the eighth spot,  and Paris Charles de Gaulle, with saw a similar rise to be ranked ninth.

The biggest promotion – five positions– was Dallas/ Fort Worth to 10th.

airport
Source: ACI World

Passenger movements in 2019 rose 3.5 percent to exceed 9.1 billion as the aviation industry basked in a decade of continued growth.

That ended with the arrival of COVID-19 and a 58.4 percent plummet in passenger numbers for the first half of 2020 compared to the same period in 2019.

International traffic was hit hardest a 64.5 percent drop while total cargo volumes handled by airports fell by 12.4 percent.

“From a period of sustained global growth in 2019, the aviation industry now faces the worst crisis we have ever confronted with huge declines in passenger traffic and revenues due to the impact of the COVID-19 pandemic,” ACI World director general Luis Felipe de Oliveira said.

“Aviation – and airports as a key focal point of the industry – will be a key driver of the global economic recovery from COVID-19 and governments need to provide assistance and coordination to help safeguard jobs, protect essential operations, and provide sensible policies to facilitate the return of air connectivity.

“We are positive about the future, but we need consistency and collaboration across the globe on key issues like testing.”

 

 

 

New research uncovers just 44 cases of inflight COVID-19 transmission

COVID-19
Image: US Food and Drug Administration.

The risk of contracting COVID-19 on an aircraft has been likened to the chances of being struck by lightning after new research uncovered as few as 44 cases of inflight transmission among 1.2 billion passengers who traveled since the start of 2020.

The tally — published by the International Air Transport Association and including confirmed, probable and potential cases — translates to one transmission for every 27 million travelers.

“Nothing is completely risk-free,’’ said IATA director general Alexandre de Juniac.

“But with just 44 published cases of potential inflight COVID-19 transmission among 1.2 billion travelers, the risk of contracting the virus on board appears to be in the same category as being struck by lightning.”

READ: COVID fails to crush travel desire.

Tracking down inflight COVID-19 transmissions is notoriously difficult and IATA medical advisor Dr David Powell recognized that the findings may underestimate the number of cases.

“But even if 90 percent of the cases were unreported, it would be one case for every 2.7 million travelers,’’ Dr Powell said.

“We think these figures are extremely reassuring.

“Furthermore, the vast majority of published cases occurred before the wearing of face coverings inflight became widespread.”

The airline lobby group pointed to a joint publication by Airbus, Boeing and Embraer of separate computational fluid dynamics (CFD) research conducted on aircraft as an explanation of why the numbers might be so low.

The manufacturers found aircraft airflow systems, High-Efficiency Particulate Air (HEPA) filters, the natural barrier of the seatback, the downward flow of air, and high rates of air exchange efficiently reduced the risk of disease transmission on board in normal times.

They concluded the addition of mask-wearing added “a further and significant extra layer of protection” which made being seated in close proximity in an aircraft cabin safer than most other indoor environments.

Specific aircraft characteristics  identified as contributing to the low incidence of inflight COVID-19 transmission included:

  • Limited face-to-face interactions as passengers face forward and move about very little
  • The effect of the seat-back acting as a physical barrier to air movement from one row to another
  • The minimization of forward-aft flow of air, with a segmented flow design which is directed generally downward from ceiling to floor
  • The high rate of fresh air coming into the cabin. Air is exchanged 20-30 times per hour on board most aircraft, which compares very favorably with the average office space (average 2-3 times per hour) or schools (average 10-15 times per hour).
  • The use of HEPA filters which have more than 99.9% bacteria/virus removal efficiency rate ensuring that the air supply entering the cabin is not a pathway for introducing microbes.

IATA  said its data collection, and the results of the separate simulations, aligned with the low numbers reported in a recently published peer-reviewed study by Freedman and Wilder-Smith in the Journal of Travel Medicine.

“ Although there is no way to establish an exact tally of possible flight-associated cases, IATA’s outreach to airlines and public health authorities combined with a thorough review of available literature has not yielded any indication that onboard transmission is in any way common or widespread,’’ it said.

“Further, the Freedman/Wilder-Smith study points to the efficacy of mask-wearing in further reducing risk.”

One of the few cases where COVID transmission has been identified is on a Qantas A330-200 carrying infected cruise ship passengers between Sydney and Perth in March.

A study by West Australian researchers and published by the US Centers for Disease Control found at least eight COVID-19 cases — and possibly as many as 11 — were contracted on board.

The flight with 38 business class and 213 economy passengers included travelers who had disembarked from cruise ships Ruby Princess, Sun Princess and Ovation of the Seas.

Eleven passengers, including nine from the Ruby Princess and one from Ovation of the Seas, were considered infectious during the flight with a coronavirus strain not previously seen in Australia.

A further 11  passengers, none of whom had traveled on the cruise ship, developed that strain of the disease between 48 hours and 14 days after the flight.

They had all been in the same cabin as the infected passengers but the researchers could not exclude the possibility that three might have been exposed before or after their journey.

Qantas medical director Ian Hosegood told Australian media that the incident was the only confirmed example of transmission on a Qantas flight and airline had not been told it was carrying cruise ship passengers.

“Had we known, they would have been stopped from traveling,” he said.

British Airways farewells the Queen of the skies.

British
One of the 747s on the tarmac ahead of the final flight from Heathrow. Photo: BA.

British Airways has waved goodbye to its last two Heathrow-based Boeing 747s, one painted in the airline’s heritage “Negus’ livery and the other in the current Chatham Dockyard colors.

More than 18,000 people flocked to the airline’s Facebook page Thursday to watch the two giant aircraft take off into a gray, drizzly London morning.

Thousands more watched the departure at the airport.

Many of them recounted memories of the long-serving 747 fleet on an accompanying feed.

READ: COVID fails to crush travel desire.

BA is among several airlines to bring forward the retirement of the planes due to COVID-19 and they have not been operated by airlines in their birthplace, the US, for some time.

The airline had planned a synchronized dual take-off on parallel runways but the weather meant they took off individually.

British
Final meeting: the last two 747s prior to take off. Photo: BA.

The Negus aircraft, G-CIVB, conducted its last passenger flight from Miami to Heathrow on Aril 6, 2020, and had operated 13,398 flights and 118, 445 hours over 59 million miles.

The Chatham plane, G-CIVY, undertook its last passenger flight from Chicago Heathrow on March 20. It had operated 11,034 flights over 90,161 hours and 45 million miles.

British

The Boeing 747 opened the world for many travelers and during its half-century of service flew 3.5 billion people to 200 global destinations.

But the fuel-hungry, four-engine aircraft could not compete with more efficient twin-engine jets such as the Boeing 787 and Airbus A350.

The 747’s last flights will be their shortest with one going to Kemble in Gloucestershire and the other to St Athan in Wales.

British Airways flew its first 747 on April 14, 1971. At the 747 fleet’s height, BA had 57 aircraft and was the world’s biggest operator of the 747-400.

BA chief executive Alex Cruz said the departure would be difficult for everyone at the airline as they paid tribute “for the incredible part they (the 747s) have played in our 100-year history”.

COVID fails to crush travel desire

travel
Photo: Wikicommons

The lust for travel remains strong with a new survey suggesting almost seven out of 10  global consumers plan to fly internationally over the next six months and 79 percent want to fly domestically.

The survey of 4000 flightview travel app users by industry data experts OAG describes fears of catching COVID-19 while flying as “tepid” with millennials and Gen-Z most keen to spread their wings.

On a 10-point scale, more than half of consumers rated concerns over catching COVID-19 while traveling less than five, with 21 percent indicating no fear.

READ: Social distancing made luxurious on new Airbus A220 bizjet.

Fears of catching the disease on a plane (40 percent of respondents) were higher than they were of contracting it at an airport (17 percent), despite widespread campaigns by airlines about the measures they are taking to combat coronavirus.

Fears of in-flight infections peaked in Europe at 45 percent and were lowest in the Asia-Pacific at 38 percent.

Between 9 and 16 percent of respondents also worried about catching the disease on public transport, with fears in this category highest in the Asia-Pacific.

The survey found millennials and Gen-Z were less apt to make travel adjustments and more eager to travel domestically compared to their worldwide counterparts.

Nearly one-third had not and did not intend to change their travel habits.

Seventy-six percent of travelers agreed mask mandates were the most effective safety measure airlines and airports could implement, followed by improved cleaning procedures.

“Most consumers, especially younger travelers, are prepared to fly under the right circumstances,” said OAG chief analyst John Grant.

“The lack of fear is certainly surprising and bodes well for the market recovery. Of course, full recovery will be driven by how well we fight the pandemic globally and when travel restrictions are safely lifted.”

The survey also found sharing real-time information remained critical for building traveler confidence, including during the booking process.

At a time there are more airline schedule changes than ever before, it said 61 percent of consumers would value real-time updates and predictions around flight and hotel capacity.

More than half would also value seeing COVID-19 transmission rates at intended destinations.

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