Virgin Australia boss John Borghetti to retire by 2020
Virgin Australia's group chief executive and managing director, John Borghetti, will leave the airline by the end of next year.
The industry veteran had told Virgin's board he would not renew his contract after January 1, 2020, the company announced on Tuesday morning.
"The board will now commence a global search for a successor while John will remain focused on leading the group," chairman Elizabeth Bryan said in a statement. “I would like to acknowledge John’s enormous contribution to the Virgin Australia Group to date and thank him for his continued dedication."
Mr Borghetti signalled his desire to leave the group early to allow time for the group to recruit a new CEO and allow for an "appropriate transition", the company said.
Mr Borghetti joined Virgin as CEO in 2010 following a 38-year career at Qantas, during which he rose to the ranks of its senior executives, but lost out to Alan Joyce for the position of Qantas CEO.
At Virgin, he has overseen the airline’s transformation from the low-cost carrier Virgin Blue to the full-service carrier it is today.
But the company has run up heavy losses in the process, delivering only one full-year net profit since 2010 amid a string of bottom-line losses.
Virgin's total rate of return to shareholders - including dividends and share-price gains - during Mr Borghetti's tenure sits at -55 per cent. That compares to +35 per cent for the ASX200 and +140 per cent at rival Qantas.
“It is a privilege to serve as CEO of the Virgin Australia Group and to lead a wonderful
team of 10,000 people," Mr Borghetti said in a statement.
"By notifying the board of my intentions now, it provides them with appropriate time to conduct a thorough recruitment process and for me to support the transition.
“In the interim, I look forward to continuing in the role of CEO and I remain focused on delivering the goals of the Virgin Australia Group."
Virgin is 90 per cent owned by five major investors: Etihad Airways, Singapore Airlines, the Chinese conglomerates HNA and Nanshan, which each own 20 per cent, and Richard Branson's Virgin Group, which owns a further 10 per cent.
With less than 10 per cent of airline's shares in free float, the board has considered privatising the company and delisting it from the ASX. But it decided against that move in February.
More to come