Virgin Australia CEO Paul Scurrah will exit the airline as it prepares to hand ownership over to Bain Capital.

Administrators Deloitte confirmed Mr Scurrah’s departure will take place once the sale of the airline has been completed.

It is believed Mr Scurrah had clashed with Bain about the strategy for Australia’s second-biggest airline and wanted to maintain a more premium offering than desired by the US private equity firm.

“Whilst it has been the most challenging time in aviation history, I have continued to be so proud of the way my team and our entire organisation has fought to save this airline and to keep competition alive and well in Australia,” Mr Scurrah said.

“We have succeeded in not just ensuring the future of the company, but also reset the business to ensure it is well placed to deliver for Bain Capital for many years to come.

“I have made this decision after some long discussions with my family. The time feels right, and I know the business will be in good hands.”

Bain still plans to keep Virgin’s lounges and business-class offering, in contrast to suggestions it would become a budget carrier, but is not likely to keep operations at a level desired by Mr Scurrah, one of the people said.

Unions representing Virgin employees are concerned about the possibility of Mr Scurrah’s exit and potential plans to move the full-service carrier downmarket.

The airline fell into voluntary administration owing nearly $7 billion in April.

It was later bought by Bain and staff were told at the time it would remain a full-service competitor to Qantas.

Mr Scurrah, who took over from long-serving boss John Borghetti in March 2019, is highly regarded by staff despite having announced plans to cut one-third of the workforce due to the coronavirus pandemic.

“He delivers good news and bad in clear terms. There is no lip service,” Steve Purvinas, federal secretary of the Australian Licensed Aircraft Engineers’ Association, said.

“He has the full support of our association.”

-with AAP