‘The man who knew too much’: Virgin’s loyalty boss on the airline’s battle with Qantas

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Despite gruelling court cases in two countries, threats of jail time, being convicted of contempt of court and slapped with a $25,000 fine, Nick Rohrlach doesn’t regret defecting from Qantas to Virgin two years ago.

The executive dubbed “the man who knew too much” in the press does not enjoy talking about that 10-month saga. But when pressed he recalls the moment Virgin chief executive Jayne Hrdlicka asked him to run her airline’s loyalty division in 2020 after more than a decade at its bitter rival. The chaos that followed was “totally worth it,” he says.

Virgin Velocity chief Nick Rohrlach. Credit:Peter Rae

“I have my dream job, and I’ve found a new, more human part of this industry,” he says.

It may have been a bumpy road but Rohrlach is now charged with leading one of Virgin’s most important divisions ahead of a highly anticipated float on the ASX as soon as next year.

Loyalty programs have quickly evolved into one of the most lucrative arms of airlines. Qantas’s loyalty division generates more than $1 billion in revenue from its 12 million members each year and is the most profitable arm of the carrier by far. Rohrlach could be forgiven for feeling the pressure. Instead, he says it’s motivating.

“There’s no pressure but there are a lot of expectations,” he says. Velocity celebrates reaching 11 million members this weekend with 20 to 30 thousand members joining every week.

Hrdlicka had to ring a couple of times before getting through to Rohrlach to offer him the job in late 2020. He’d been skiing in Japan, one of the many perks of his former role as the country’s Jetstar boss. When they finally connected a week or so later, there was just one problem. Rohrlach had already accepted a senior role in Qantas’s loyalty program. It would later fuel allegations he’d accessed sensitive commercial information about one of Qantas’s most profitable divisions while leading its biggest rival.

“I’m lucky. I’m a points’ nerd who gets to be in charge of points”.

Nick Rohrlach

Qantas at the time described Rohrlach’s defection as an “inglorious sequence of events”. Both airlines viewed Rohrlach’s personal passion for points hunting as the perfect fit for their loyalty division. He even won an award when he worked at consulting firm BCG for collecting the most frequent flyer points in a year at the onset of his career. “I’m lucky. I’m a points’ nerd who gets to be in charge of points”, he says.

When Rohrlach told Qantas of his intentions to leave, the airline sought a ten-month non compete contract in addition to six-months of gardening leave. The airline giants battled it out in Singapore – where Rohrlach’s Qantas’s contract was signed-with Virgin alleging the ten-month non compete was unlawful.

In the end, Qantas won an injunction which delayed Rohrlach’s start but the saga continued when Qantas uncovered a series of texts between Rohrlach and Hrdlicka which revealed they were discussing Velocity, a contravention of the injunction.

Rohrlach was convicted of contempt of court and fined $27,000 but Qantas sought the maximum penalty for the offence: his imprisonment. The airlines called a truce in September last year and Rohrlach began his new role. Despite the legal hard-ball, he’s quick to dismiss the impact of his near brush with jail.

“Last year was a crazy year for everyone. I had my own thing, but everyone had their own thing with the pandemic last year. It’s a year no one will forget for various reasons,” he said.

Rohrlach’s husband, Terry, says the decision to accept the Virgin role was not an easy one. Nor was seeing the countless headlines during the airline tug-a-war. “He really wanted it but respected me a lot in the process and knew it would uproot our lives. We make these decisions together. I didn’t expect his name to be framed that way in the media but of course I’ll always be on his side.”

“At the end of the day, Nick needs to be challenged. If he’s not challenged by a role he gets bored easily, so I think he made the right decision,” Terry said.

Nick Rohrlach was asked to run Virgin Australia’s loyalty division in 2020.

Relentless optimist

One former associate described Rohrlach of having the kind of relentless optimism that could be construed as annoying if it were not so genuine. Rohrlach says he’s always been wired that way.

“It’s probably why I entered consulting. I’m a big picture, positive forward thinker”.

Like many aviation executives, Rohrlach’s a quintessential plane spotter. From about the age of two he would accompany his mother to farewell his father at Sydney Airport on business trips, and spend the rest of the day watching planes take off from the window before being dragged home to Wollongong.

Rohrlach’s first boss at consulting firm BCG, James Goth, remembers him as a wide-eyed 20-something who could rattle off every plane type. Goth says while Rohrlach was clearly in awe of working in a big city, he wasn’t trepidatious but hungry. The pair have remained close, Rohrlach recently took Goth’s 10-year-old son to watch the first A380 arrive at Sydney Airport after the COVID-19 induced grounding.

Virgin Velocity’s chief executive Nick Rohrlach tries to ignore the buzz surrounding the company’s looming initial public offering. Credit:Peter Rae

Rohrlach credits the Virgin ethos for the way it has risen from the ashes and would like to see the program back to where it was before the airline collapsed into administration at the height of the COVID-19 crisis. In 2019, the Velocity division pulled in revenue of $411 million.

“Flying’s back to pre-COVID-19 levels. We’re very much on our way to back to where we were at in 2019 and I’m pretty convinced we could do better,” Rohrlach said.

Hrdlicka says she’s never regretted choosing Rohrlach to head up Velocity, “I needed a leader who understood aviation and could reimagine what a great loyalty business looks like.”

Virgin’s challenges

Virgin was plucked out of administration by US private equity Bain Capital in 2020. Rohrlach watched it unfold from Qantas, where he was running Jetstar Japan. Aviation is a notoriously siloed industry with little movement between airlines.

His experience at Qantas, Virgin’s biggest rival, is a relatively rare trait shared by a few other Virgin executives including Hrdlicka herself and chief customer officer Paul Jones. But Rohrlach says it’s unhelpful to concentrate on the other side too much and he chooses to instead focus on what Virgin does differently.

Rohrlach says he’s seen a more relaxed, happier side to the aviation industry since joining Virgin, and praises the airline’s workplace culture which has been criticised in the Bain era. (Hrdlicka was accused of bullying by a former pilot last year. Virgin is defending the claims in court and denies any wrongdoing).

“I needed a leader who understood aviation and could reimagine what a great loyalty business looked like”.

Jayne Hrdlicka

Last month, the carrier had one of its famous hangar parties, with Hrdlicka hitting the dance floor among a throng of her employees. “I’ve seen the likes of Jayne so much happier and more herself. It’s the Richard Branson ethos,” Rohrlach said.

Still, the airline has its fair share of challenges. It’s yet to establish an international presence beyond a handful of short-haul flights to Bali and other surrounding countries. This may be about to change with industry rumours swirling about a much-anticipated route to Japan launching as soon as January. Virgin recently signed code share agreements with United Airlines and Qatar Airways, bringing its total number of partnerships to 14. Qantas’s frequent flyer program boasts 45.

Like other airlines around the world, it has struggled to cope with the rampant demand for travel due to staff shortages, increased cost of fuel and supply-chain issues since emerging from COVID-19 induced border closures.

Virgin’s on time performance slipped in recent months while its competitors have improved, according to government BITRE data.

More than one third of Virgin flights were delayed in October and the number of cancellations doubled on the month prior due to staff sickness, single runway restrictions at Sydney Airport and a bout of bad weather.

Yet while Qantas has been a lightning rod for consumer anger this year Virgin has been relatively unscathed.

“It’s easy to write that it’s been all doom and gloom, you’ll get more clicks, and it has been really tough, but I think airline people are naturally optimistic. Airline people will tell you the thing they love in the darkest time,” Rohrlach said.

“Everyone’s a flyer so they’re all instant experts on everything aviation… People in this business are in the service business and despite everything Virgin has been through, the employees still really want to do this job and those people make all the difference.”

Aviation battlefield

Like his boss Hrdlicka, Rohrlach is a workaholic. From learning Spanish on Duolingo to completing the New York Times’s Wordle puzzle daily, most of his hobbies away from the airline still pertain to learning or self-improvement. Before COVID-19, he travelled with his husband around the world to complete the “Spartan Race”- an endurance event that claims to “help humans become UNBREAKABLE”- every year.

When Hrdlicka met Rohrlach in 2012 he’d been charged with what she deemed a “near impossible” task; launching Jetstar Hong Kong in the face of fierce opposition from local carriers.

“He doesn’t have rose-coloured glasses, it’s calculated, infectious optimism.”

Edward Lau

Former colleague Edward Lau remembers Rohrlach’s commitment, cross-cultural understanding and trademark optimism but says his one weakness is knowing when to take a break.

“We were working as hard as we could to get it off the ground and it was a high-energy environment but I remember having to say ‘hey Nick, I worry about your health when you’re always on overdrive’, Lau says.

Lau says he knew Rohrlach was exactly the right fit for the Hrdlicka-helmed Virgin, “When I saw Virgin’s new leadership I shouldn’t have been surprised, some of them have gone through the aviation battlefield multiple times. He has the same consulting background and has the same growth-orientated mindset… He doesn’t have rose-coloured glasses, it’s calculated, infectious optimism”.

Hrdlicka told The Australian in June that Bain may be ready to float the airline on the ASX as early as next year, just two years after it was plucked out of administration. The speed of the return has surprised many in the industry.

Rohrlach says he’s in the dark about any IPO plans. He says he tries to ignore the intrigue because the airline already runs to public company standards. “It’s not in our control, so why bother thinking about it? I find [that mindset] quite freeing.”

Still, he concedes it’s all anyone’s thinking about in and outside of the tent.

“It’s always the question that gets asked at town halls [internal staff meetings] but the Bain Capital guys have been pretty clear. They’re not going to suddenly wake up and say ‘okay, we’re going to sell it’. They’re on board for the long run so what’s really going to change?”

“I want to focus to make this business better, we want to thrive and succeed. Who the shareholders are and whether it’s listed or not is kind of just a detail”.

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