Virgin Australia boss Jayne Hrdlicka has spoken publicly about her controversial departure from The a2 Milk Company for the first time, saying the $6 billion baby formula exporter did not handle her exit well.
The former Jetstar CEO was installed as the head of Virgin in November by its new private equity owner Bain Capital, which took control after the COVID-19 pandemic pushed the airline into administration last April.
Virgin Australia CEO Jayne Hrdlicka says some of the stories about her time at a2 were “BS”. Credit:Attila Csaszar
Ms Hrdlicka has told Good Weekend her departure from a2 – which was shrouded in speculation at the time – came immediately after doctors identified a “huge tumour” on her husband’s kidney in late November 2019.
The executive, who also chairs Tennis Australia, said it was clear she could not lead the ASX-listed baby formula exporter at a time when it was undergoing massive growth in the Chinese market.
“We just said: ‘we’ve got a massive problem on our hands, we don’t know exactly how it’s going to play out. I can’t look shareholders in the eye and say I can do this job in Australia’,” she says in the interview. “So I left. And I don’t think a2 handled that particularly well.”
At the time, Ms Hrdlicka said only that she was leaving a2 due to “unforeseen changes in my personal circumstances”, leading to speculation that her departure had more to do with her having “ruffled a few feathers” at the company and a split with company chairman David Hearn.
Ms Hrdlicka’s husband has since had surgery and treatment for his cancer, and “is positive and in good form”, she says.
Ms Hrdlicka says reports at the time that she had spent $19 million on consultants from Bain & Company – where she had been a partner before joining the Qantas Group – were “BS” and that only a small portion of that went to her former employer.
The large spending on IT experts, strategy consultants in China, and analysts was necessary, she says, to quickly modernise a2 after it had failed to keep pace with its enormous revenue and distribution growth.
“We didn’t have an IT person in the company when I arrived… not a single IT person,” Ms Hrdlicka says. “Supply chain, the ERP (enterprise resource planning) system, everything was super fine for a company that’s turning over $50 million in revenue, but not one who’s on its way to a billion.”
“So of course you have to spend to get people who know what they’re doing, because you don’t have anybody inside the company who does.“
Ms Hrdlicka said she appreciated that Geoff Babidge – A2’s previous CEO, who returned temporarily after she left abruptly in late 2019 – later publicly endorsed the work she commissioned as “high quality” and “very valid”.
Virgin has shed around 3000 employees – or a third of its workforce – in the past year and Ms Hrdlicka previously warned more jobs could go when the JobKeeper wage subsidy program ends on March 28.
But Virgin said this week the federal package to prop up the airline industry by paying for 800,000 half-price air tickets should be enough to stave off further redundancies, provided state borders remain open and demand recovers as expected.
Virgin is currently flying at around 50 per cent of its pre-COVID domestic capacity, while Qantas and Jetstar are at 60 per cent and targeting 80 per cent by mid-year.
The half-price airfare scheme’s announcement on Thursday triggered a 78 per cent jump in flight searches on Virgin’s website and a 40 per cent jump in bookings, the airline said on Friday, prompting it to launch a two-hour, half-price sale on Friday. Jetstar quickly matched that by offering fares as low as $25.
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