The Australian
September 7, 2023
Former Virgin boss Paul Scurrah has revealed that as a teenager growing up in Melbourne’s suburbs he believed that one day he would be the chief executive of Qantas.
Scurrah, who has worked in aviation, tourism and is now the boss of the nation’s biggest freight hauler Pacific National, says he didn’t overthink his version of success but had an ambition to run an airline. He was speaking during an extended interview on the Blenheim Partners’ No Limitations podcast.
“I actually told people back in the late 1990s that I would be CEO of Qantas,” Scurrah says.
“I certainly wasn’t cocky about it, but people who I was close enough to confide in when they’d say so where do you want to end up? I would say I see myself running (it)”.
While the podcast was recorded earlier last month but published Thursday, the comments put a focus on the top-level turmoil at his one-time rival. It comes amid the surprise retirement of long serving chief Alan Joyce this week with rising reputational damage at the airline.
The former Virgin boss notes the Qantas brand “is so powerful and strong” that the airline will continue to demand a premium, although he acknowledges it had been tarnished in recent months.
Scurrah started his career in aviation working with Qantas and then Ansett, and helped establish Regional Express or REX. He moved from running Australian operations of stevedore DP Ports to become CEO of the ASX-listed Virgin Australia.
He was appointed to the role in 2019, with a mandate to improve the carrier’s earnings and drive a longer term international expansion. However, the forced groundings of passenger planes during the early days of the Covid pandemic resulted in the collapse of Virgin. The airline was later acquired from administration by private equity firm Bain and Co and is now on track for a stock market listing either later this year or early next year. Scurrah saw the airline through the administration but left when Bain took charge and later joined Pacific National. Former top Qantas executive Jayne Hrdlicka now heads up Virgin.
He tells the podcast getting named Virgin CEO was a dream that came true and before the pandemic hit he knew exactly where he needed to take the airline.
“Virgin had a great people culture and a really good frontline work ethic and attitude and it still does a really, really good job.
“They had invested heavily in the product, chased after Qantas and going into the corporate market, which in isolation is a good thing to do. That’s where all the money’s made – not all – but most of the money is based on your revenues in the corporate market.
“But it was an expensive pursuit. And so honouring that investment was for me to then simplify it a bit to bring profit back into the discussion with the shareholders or financial strength into the discussion with our people. And I certainly was very open with the market when I got the job to say we need to get us back to a strong profitable position.”
He tells the podcast Virgin was not going to try and be the same as Qantas, but to be different to them and get people to like the difference.
“The ambition to get to the same sort of route economics as Qantas was probably a leap too far,” he says. But that meant Virgin would need to be rational on pricing to close the gap and its offering, keeping the product simple and lowering the cost base to win over customers that aren’t “stuck in the Qantas system”.
And while Qantas is currently under fire for losing sight of customers, Scurrah says it’s important in running a company – including an airline – to accept that you can’t keep everyone happy. However it is important to get the balance right.
“Customers want to be happy; shareholders want to be happy; your people want to be happy – so I simplify the purpose of the companies I run to say ‘my purpose is happy people, happy customers, happy shareholders’.
“But they can’t all be blissfully happy all the time. So my job is to keep them mostly happy most of the time because if you don’t, the equilibrium is killed. You lose the balance,” Scurrah says.
“And I can say this with Virgin frankly, very happy people, very happy customers, very unhappy shareholders. And so if you lose the balance, there are extreme consequences.”
He says in talks with unions over the years from aviation to waterfront workers, Scurrah says the discussion was to make sure people were happy “but there was a limit”.
While the notion of profit gets demonised by unions, Scurrah says he tries to explain why it’s important for companies to be financially strong. By being strong this allows a company to employ more people, invest in new equipment and invest in safety as well.
Scurrah tells the podcast that success “comes through a series of very small steps over a very long period of time”.
“Everyone who’s an overnight success in the world’s eyes will tell you this is not something that just happened overnight,” he says.
Article by Eric Johnson, Associate Editor
Source: https://www.theaustralian.com.au/business/aviation/i-saw-myself-as-ceo-of-qantas-says-former-virgin-boss-paul-scurrah/news-story/1bda6028f9a32a2740599a1388a1e37c