Virgin Australia will search for their third ever CEO in its near 20-year history by the start of 2020.
– Jordan Chong
Current boss John Borghetti announcing his intention to step down some time in the next 18 months.
Borghetti has “advised the board he will not renew his contract post 1 January 2020”. Virgin Australia said in a statement to the Australian Securities Exchange (ASX) on Tuesday.
“Mr Borghetti has signalled his desire to depart by this date to enable the Group ample time to recruit an incoming CEO and allow for an appropriate transition,” the Virgin Australia statement said.
Virgin Australia chairman Elizabeth Bryan said the board would commence a global search for a successor.
“The board and I are grateful to John for providing a generous period of time for the search for the CEO and an appropriate transition of leadership,” Bryan said in the statement.
“I would like to acknowledge John’s enormous contribution to the Virgin Australia Group to date and thank him for his continued dedication.”
Borghetti said it was a privilege to serve as the chief executive of the Virgin Australia group and lead a “wonderful team of 10,000 people”.
“By notifying the board of my intentions now, it provides them with an appropriate time to conduct a thorough recruitment process and for me to support the transition,” Borghetti said.
“In the interim, I look forward to continuing in the role of CEO and remain focused on delivering the goals of the Virgin Australia Group.”
The veteran aviation executive has spent more than four decades in aviation, having worked at Qantas for 37 years where he rose to executive general manager. He left the Flying Kangaroo in 2009, after Alan Joyce was named chief executive.
Borghetti has been Virgin Australia chief executive for a little over eight years, having succeeded Brett Godfrey in May 2010. He is just the second chief executive in the airline’s history.
Under his leadership, the airline has been transformed from a low-cost carrier into an airline group with a full service (Virgin Australia) and low-cost-carrier (Tigerair Australia) arm, as well as regional and cargo operations and a frequent flyer program nudging nine million members.
However, what has eluded Virgin Australia under Borghetti has been consistent profitability, with the airline group racking up losses in excess of $1 billion over the past five financial years.
Air New Zealand partners with Virgin Australia’s main competitor
Virgin Australia’s codeshare alliance will end in October. As Air New Zealand moves to an alliance with Virgin Australia’s main competitor, Qantas. This has put Virgin Australia in a tough situation, as they have no partnerships with any local New Zealand airlines, to connect the tough Trans-Tasman market to regional/domestic New Zealand destinations. The new CEO will have to bring new ideas into the airline, so they are able to compete in this tough market.