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Outgoing Virgin Australia CEO Jayne Hrdlicka warned of impending turmoil as the company reported $2.8 billion in sales for the six months ending 31 December, an increase of $300 million compared to the same period last year, and a profit of $236 million.
Hrdlicka praised the company’s overall success and warned that the second half of the year will be challenging due to competitive pricing in the market and significant capacity expansion. She emphasised that Virgin must remain focused on executing its strategy.
The announcement comes after Hrdlicka’s recent statement that she will step down as CEO. She cited the timing as the reason, stating that the company will undergo a significant transition culminating in an initial public offering (IPO).
Owners Bain Capital have long discussed the IPO. Initially expected in the second half of 2023, it has since been delayed and is now more likely to happen in 2024, according to reports from last year.
According to reports, Bain Capital has been dissatisfied with Hrdlicka’s performance for the past twelve months. The equity fund reportedly thinks Hrdlicka was “clearly not capable of executing” strategies to take advantage of Qantas’s challenges throughout 2023.
A full-year profit of $129 million (or 5% of competitor Qantas’ $2.45 billion in the same period) and cancellation and delay rates that put Virgin in second place behind Jetstar are significant points of complaint.
According to a recent client note from JPMorgan, Qantas’ domestic yields were 7% lower in December, while Virgin’s were 15% lower.
According to reports, Jayne Hrdlicka will hold off on leaving until a successor is named, though no official timeline has been announced.
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