Media blitzkrieg by Cyrus Capital
Until this weekend, Cyrus Capital senior advisor Jonathan Peachey has launched a media blitzkrieg, introducing the firm (relatively unknown in Australia) and outlining their plans for Virgin Australia.
Despite previously saying little, the New York-based firm had suggested it would keep Virgin Australia running as a premium full-service airline. That has been jettisoned. Now, Cyrus Capital plans a simpler, leaner, mid-market hybrid airline.
“The business…should sit below where that very top tier of where Qantas plays so strongly in, and above and maybe overlapping slightly where Jetstar sits,” Mr Peachey told the Sydney Morning Herald.
A multi-faceted strategy back to profitability for Virgin Australia
Some might say, well, what’s new there? Despite this, Cyrus Capital believes it can have Virgin Australia back in the black within three years. It has developed a multi-faceted strategy to achieve this.
The fleet will be simplified, and the Tigerair brand will end. The Virgin brand will stay. Cyrus Capital has a history with Virgin, having previously been a partner and investor in Virgin America. Richard Branson is currently associated with both the Cyrus Capital and Bain Capital bids.
According to Mr Peachey, the bulk of Virgin Australia’s management will be retained. Included on this list is the current CEO, Paul Scurrah. The well regarded Mr Scurrah has only been CEO for 12 months. Most of the problems at Virgin Australia predate his arrival.
Culture is key
With employees making up the bulk of Virgin Australia’s creditors, Cyrus Capital is planning on making a strong pitch to them to get their support. Both bidders have said accrued entitlements will be honored. But Cyrus wants to tap into culture and the “fun” of working for the Virgin brands.
“The cultural element which Virgin brings to the table really is key,” Mr Peachey told The Australian.
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