John Borghetti to step down as Virgin Australia CEO
Written on the 12 June 2018 by Ben Hall
Virgin Australia (ASX: VAH) chief executive John Borghetti will not renew his contract after 2020, ending a decade-long tenure leading the low cost carrier.
The airline says the announcement has been made to allow for "ample time" to find a successor and allow for a transition and it has already begun a global search for its new CEO.
"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," Virgin chair Elizabeth Bryan says.
"I would like to acknowledge John's enormous contribution to the Virgin Australia Group to date and thank him for his continued dedication."
Borghetti, an industry veteran of 45 years, has made no secret of the fact that he wants to step down and former Tigerair boss and Virgin's head of Australian operations, Rob Sharp, has been named as a potential replacement along with current Tigerair CEO Merren McArthur.
Two years ago he hired John Thomas as a potential successor but he left after just four months.
Borghetti joined the airline in 2010, when it was called Virgin Blue, and has established Virgin Australia as the second largest carrier in Australia by market share.
Prior to joining Virgin, Borghetti was executive general manager of Qantas, where he had spent 36 years in a career that began with him working in the mail room in 1973.
Under his leadership, Virgin has added routes and purchased rival low-cost airline Tigerair Australia but has struggled to turn a profit, mostly because of an ongoing price war with main competitor Qantas and below-par performance with its Velocity frequent flyer program.
The company reported a $224.7 million loss in 2016 and $185.8 million loss in 2017.
Earlier this year, it failed in an attempt to become a private company because none of its combination of majority shareholders wanted to buy the others out.
Very few of its shares are publicly traded as most of them are held by Etihad Airways, HNA Aviation Group, Nanshan Group, Singapore Airlines and Virgin Group.
Business News Australia
Author: Ben Hall