SYDNEY (Reuters) - A major employee union said on Wednesday it had suspended bargaining talks with Virgin Australia Holdings Ltd (AX:VAH), pending clarification from new owner Bain Capital about the status of Chief Executive Paul Scurrah.
Local media reports said Scurrah had clashed with Bain about the strategy for Australia's second-biggest airline and was trying to steer it away from becoming a budget carrier.
Scurrah said on Wednesday he was not in the habit of commenting on speculation when asked about rumours he would be replaced, according to The Australian Financial Review.
A Virgin spokesman said the airline was not in a position to comment. Bain did not respond immediately to a request for comment.
Transport Workers' Union national secretary Michael Kaine said in a statement that the lack of clarity over Scurrah's position was a "serious and worrying development."
Creditors last month voted in favour of the U.S. private equity group's purchase of Virgin, a move that will allow it to exit voluntary administration.
Virgin entered administration in April owing A$7 billion (3.9 billion pounds) to creditors after suffering from a sharp plunge in demand because of the coronavirus pandemic.
Before the pandemic, Virgin had spent a decade transforming itself from a low-cost carrier to a full-service rival to Qantas competing for corporate travellers. But that came at the cost of years of losses.
Under Bain's business plan, Virgin plans to cut a third of its workforce as part of an overhaul that will focus on being a domestic and short-haul international Boeing Co (N:BA) 737 operator.
Scurrah had indicated the airline planned to position itself as a more value-focused option than Qantas but to retain a premium offering to Qantas' budget offshoot Jetstar.