Bain Capital has so successfully eroded trust that a series of private phone calls between Virgin’s new chief executive Jayne Hrdlicka and Qantas CEO Alan Joyce are now raising questions.

“We were deceived into encouraging workers to vote for Bain’s proposal,” said Association of Virgin Australia Group Pilots president John Lyons. “Bain’s credibility is in doubt, and they’ve destroyed what little trust the workers had in them.”
A rival private equity investor said Bain’s spectacular backflip would have ramifications for the industry, and much more.
“Unfortunately there will be collateral damage across the whole private equity industry. I have never seen anything like this anywhere in the world: to go out so aggressively with a public campaign, to the unions, to aggresssively back the chief executive and then sack him before the transaction closes,” he said.
“It’s unprecedented.”
ACCC chairman Rod Sims said the telephone conversations between the two competitors were unusual.
“The ACCC is always concerned if there are multiple conversations between senior executives in closely competing entities, and Virgin and Qantas are each others’ closest competitors,” ACCC chief Rod Sims told AFR Weekend, adding that he was unaware of the conversations until contacted by the paper.
“I think if there’s multiple conversations it becomes more of an issue…one on one conversations between chief executives of closely competing entities in my experience, normally that would not happen.”
Any conversation about aviation, particularly capacity and price, would be a “fine line to walk”, a competition expert said.
A Qantas spokesman said while it was relatively common for airline executives to talk to one another, Mr Joyce was very aware of the competition laws and would ensure no conversation breached them.
Alan has known Jayne for 20 years and naturally enough they have spoken as friends off and on over that time. As far as executives at rival airlines talking to each other goes, it happens often given shared industry issues that youd expect them to discuss,” he said.
“Arguably, with COVID, its more important than ever, especially around passenger safety and government mandates. Competition law is very well understood and respected, and no conversation we have, personal or professional, would cross that line.
An industry source concerned by the lack of clarity around Ms Hrdlicka’s role at Virgin – which Bain consistently refused to clarify during the competitive bidding process, other than to say she was a consultant – said that made the calls more of a grey area.
A Bain Capital spokesman said any conversations between Ms Hrdlicka and Mr Joyce to date had been purely personal.
“Both Jayne Hrdlicka and Bain Capital are mindful of their obligations under competition law and take them very seriously,” he said.
“They speak from time to time about personal matters. All conversations between Mr Joyce and Ms Hrdlicka to date have been of a personal nature.”
Bain Capital’s Mike Murphy had called Mr Joyce once, after Bain was named as preferred bidder by the administrators.
Unions, including The Transport Workers Union – which suspended negotiations over fears Mr Scurrah was leaving this week – will meet with Bain Capital on Monday afternoon at 4.30pm.
Unions are negotiating with Virgin Australia which wants pay to be reduced – by as much as 40 per cent for pilots and 30 per cent for baggage handlers – if it is to achieve a true low-cost model.
Jayne Hrdlicka has been installed as Virgin chief executive, after months of Bain Capital throwing its public support behind Paul Scurrah.  Chris McKeen
In addition to convincing the unions to take pay cuts to improve the airline’s profitability and future performance, Bain and Ms Hrdlicka must also build a strong executive team.
Former Qantas international chief Tino La Spina this week joined Boral, which industry watchers said was a major loss for Bain.
Increasing angst within the unions is the parachuting of Bain principal Charles Lawson into Virgin’s head office in recent weeks. Mr Lawson arrived in Brisbane, where Virgin has its headquarters, at a similar time to Ms Hrdlicka, and Bain vice president Rachel Yap is also said to be heavily involved with the airline at the moment.
The pilots union president Mr Lyons said the government should also be held to account.
“If the federal government had come to the party with a properly construction aviation support package at the beginning of the pandemic, this whole situation could have been avoided,” Mr Lyons said.