Virgin Australia has started a global search for a new group executive after the sudden departure of John Thomas less than a year into his tenure.
Thomas left the airline last week and Tigerair Australia chief executive Rob Sharp has moved into the position on an acting basis while the budget carrier’s head of flight operations, Peter Wilson, takes on Sharp’s old role.
Virgin Group chief executive John Borghetti head-hunted Thomas, an Australian who worked as a high-profile consultant in the US but had not run an airline, to take on over the day-to-day operations at Virgin.
The position involved oversight of functions ranging from the Inflight and ground experience to network operations, flight operations, pricing and maintenance.
There was also conjecture he was being groomed as a potential successor for Borghetti, who has now been at the airline seven years.
Sharp was a senior Qantas executive before he joined Tigerair in 2013. He has been instrumental in reviving the flagging fortunes of the budget carrier and is seen as a strong internal candidate for the group executive job, along with Virgin Australia Regional Airlines and Virgin Australia Cargo chief executive Merren McArthur.
In a message to staff, Borghetti said Thomas had been instrumental in introducing product innovations such as inflight w-fi, and new ancillary revenue opportunities such as Economy X seating.
He had also worked on the next phase of the airline’s strategy and assisting in the delivery of the airline’s Better Business cost reduction program.
He said Sharp has overseen a “fantastic transformation’’ at Tigerair.
“Rob has a record of great results in his executive positions and extensive experience in working with large teams and managing complex operational issues,’’ he said “I am confident that Rob will deliver success in this role as he works closely with the VAA senior leadership team to roll out the recently-announced strategy for the VAA business.
“A permanent appointment to the position of Group Executive, Virgin Australia Airlines will be made in due course and I will update you as soon as possible.”
The surprise news about Sharp came as Virgin also announced that non-executive director Bruno Matheu would step down from the board and would be replaced by Etihad Aviation Group chief group support services officer Harsh Mohan.
Mohan has been with Etihad since 2011 and was previously the airline’s senior vice president audit, compliance and risk management. He also worked with Air Canada as general auditor and senior director risk manager and business transformation from 2007 to 2011.
Virgin has been working to boost its balance sheet after an audacious move to evolve into a full-service carrier that sparked a profit-sapping surge in Australian domestic capacity. It cut debt in the first three quarters of the 2016-17 financial year by a third.
However, it has been struggling to move into the black and in May revealed a net loss of $69m for the three months to March 31.
Ratings agency Standard & Poor’s recently upgraded its outlook for Virgin from negative to stable, predicting the airline’s profitability would benefit from factors such as disciplined capacity growth, lower fuel prices and restructuring.
Read: Australian airlines exp3ected to benefit from benign conditions.
Virgin on July 3 confirmed that it expected its underlying performance for the fourth quarter to improve on the same quarter in the 2016 financial year but did not give a profit guidance for 2016-17.
However, it said it expects a positive free cash flow of $A0 to $A50 million, a $A90 to $A140m improvement on the previous year and said its Velocity Frequent Flyer program hit 8 million members in June. It expected earnings at Velocity to be 10-13 per cent higher in the second half compared to the same period a year ago and up 2 to 3 per cent for the financial year
It will report its annual results on August 10.
