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INTERVIEW


HOW RICHARD BRANSON LAUNCHED VIRGIN ATLANTIC — AND MADE FLYING FUN




THE AIRLINE IS CELEBRATING 40 YEARS OF DISRUPTING BA’S FLIGHT PATH. BUT WITH
PROFITS ELUSIVE IN RECENT YEARS, IS IT DESTINED FOR A MIDLIFE CRISIS?

The face fits: launching flights to Sydney, 2002
REUTERS
John Arlidge

Saturday June 08 2024, 6.00pm BST, The Sunday Times

On June 22, 1984, a second-hand jumbo jet called Maiden Voyager tore down the
runway at Gatwick airport en route to New York and disappeared into an ashen
sky. On board were celebrities including Phil Collins, Holly Johnson — and
Christopher Biggins — and media titans, notably Sir David Frost. Welcoming them
at the jet’s door, dressed as a pilot, was a buccaneering entrepreneur who had
made millions by signing the Sex Pistols to his Virgin record label — Richard
Branson.

Virgin Atlantic VS1 turned into the greatest party in the sky. Butlers served
beluga caviar and Dover sole with 1982 Chassagne-Montrachet to guests in all
cabins. The in-flight entertainment was the classical cellist Julian Lloyd
Webber, brother of Andrew, performing live. So thick were the cigarette and
alcohol fumes that billowed out of the door of the 747 after it landed in
Newark, goes the tale, the ground staff almost fainted on the air jetty.

Few people, including most Virgin executives, thought the airline would survive.
Yet tomorrow, Branson — now Sir Richard — will host another sky-high party to
mark its 40th birthday. Two Virgin jets, one from London and one from
Manchester, will fly to Las Vegas for a “Love at first flight” pool party at the
city’s Virgin hotel. They will be packed with the airline’s longest-serving
staff, some of whom were on that first flight, plus a few famous faces.

Toasting Virgin’s first flight in June 1984
ALAMY

“We’ll celebrate the spirit of Virgin, which is so similar today to what it was
on that inaugural flight,” says Branson, 73, as he takes a seat in his private
apartment atop the Virgin hotel in New York and orders his umpteenth cup of tea
of the day. He looks at his decaffeinated milky brew and adds: “I’ve avoided
getting drunk for quite a while — but I’ll let myself go at the party.”

It’s a moment to savour but there’s no time to sit back. After four decades of
“surviving against the odds”, Branson once again finds himself fighting to keep
Virgin Atlantic aloft. His arch-rival, British Airways, is investing tens of
billions of pounds to improve service after a wretched few years. The snazzy
Gulf carriers, such as Emirates, are stealing his best ideas, adding bars and
showers to their planes and spas to their lounges. While most other airlines are
racking up record profits thanks to the post-pandemic travel boom, Virgin
recorded a pre-tax loss of £139 million last year. The last time it made a
profit was 2016.


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To convince travellers he still flies higher, Branson is introducing new perks
for economy and business-class passengers, including “a seat that is better than
British Airways first class”. He also plans to return to Gatwick airport after
pulling out during Covid. Of all the businesses he has started — music, trains,
gyms, a bank, cola, vodka, weddings, hotels — the airline is his favourite and
“I’ll fight tooth and nail to keep it going”, he says.

An encounter with Zulus in South Africa, 1996
ALAMY

It’s not hard to understand why. Branson transformed aviation from a high-price,
low-quality chicken-or-beef form of travel — “Everyone hated it!” — into an
experience you looked forward to. Virgin was cheaper than its rivals. You could
get a London to New York economy return in the 1980s for about £200, half what
most of the big airlines charged at the time. Yet it was — gasp! — fun. Sporting
trademark lipstick-red uniforms with matching shoes and handbags, its trolley
dollies (it was the 1980s) served ice cream in the cheap seats. From 1991, for
the first time, there were seatback TV screens in all cabins. They were “the
most expensive TVs in the world”, Branson jokes. A tech outfit quoted $10
million to install them, “so I rang up Boeing and said, ‘If I order ten
brand-new 747s, will you include the price of the seatback videos?’ They
agreed.” The price? Two billion dollars.

Those jumbos, which soon started flying from Heathrow and Gatwick to the
Caribbean, Africa and Asia as well as the US, had names that harked back to the
golden age of the New York and Los Angeles jet set: Uptown Girl, Leading Lady.
Branson put the big seats on the upper deck and called business class Upper
Class, a name that has endured long after Virgin axed its 747s. (Mercifully his
plan to call economy class Riff Raff was jettisoned.)

Virgin used nudge-nudge, wink-wink ads and other “cheeky” marketing methods to
attract attention — but Branson won’t celebrate in Vegas tomorrow by turning
Kate Moss or Pamela Anderson upside down on the wing of one of his aircraft, as
he used to when marking a milestone or launching a route. “I’ve lived long
enough to know times change,” he says.

The Virgin boss carries the supermodel Kate Moss along the wing of a 747 to mark
his airline’s 25th anniversary, 2009
PA

It was a more simple advertisement that got Virgin started. Forty-three years
ago Branson’s American Airlines’ flight from Puerto Rico to the British Virgin
Islands was abruptly cancelled. Anxious to get back to his home on Necker
Island, he chartered a small Caribbean Airlines propeller plane, grabbed a
blackboard and used a chalk crayon to write: “Virgin Airlines to the BVI. One
way $35!” His fellow disgruntled passengers paid up and “I made a profit of
$39”, he recalls. The next day he phoned Boeing and asked to lease a second-hand
jumbo jet to start Virgin Atlantic. Boeing agreed — but warned that no one would
ever fly on an airline called Virgin.


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Whether or not you like Branson’s style, he has proved his doubters wrong. He
was the first person to break the stranglehold that British Airways, Pan Am and
TWA had on flights across the Pond.

When Sir Freddie Laker tried it with Skytrain in 1977, the big carriers, whose
combined fleet totalled about a thousand jets, reduced their fares to drive the
upstart into bankruptcy — and, once it was eliminated, put fares back up.
Branson had studied Skytrain, learnt from Laker’s mistakes and thought he had a
chance. He kept costs down by initially leasing rather than buying aircraft, as
Laker had. He had a lucrative business-class cabin — not simply economy class,
which was all Laker had offered. Crucially he decided to give the airline a face
— his own — and cast himself as David versus Goliath.

Tucking up on a sleeper seat, 1999
JEREMY YOUNG

His timing was perfect. The Conservative government, led by Margaret Thatcher,
hailed Branson as the kind of never-say-die entrepreneur Britain needed to shake
it out of its corporate torpor. To this day Britain remains the only European
country to have two “flag carriers”. There is no national long-haul alternative
to Air France, Iberia in Spain or KLM in the Netherlands. Passengers backed the
plucky Brit with their wallets. One frequent flyer gave the airline a PR boost
Branson could only have dreamt of: Princess Diana wore a sweatshirt with a “Fly
Virgin Atlantic” logo.

Yet survival remained a struggle. BA, after failing to see off Virgin by
slashing fares, tried a new tactic. In the early 1990s BA staff, working in
secret, gained access to Virgin’s booking system. BA employees then impersonated
Virgin Atlantic staff and telephoned Virgin customers to tell them their flights
had been delayed or cancelled and encouraged them to switch to BA. Smear stories
about Virgin Atlantic were planted in newspapers. When Lord King, then BA
chairman, denied wrongdoing and dismissed Virgin’s claims of “dirty tricks” as
yet another publicity stunt, Branson sued BA for libel. BA countersued but the
court found in Virgin’s favour, ordering BA to apologise and to pay £3.5 million
in compensation and costs, which Branson distributed to his staff as a “BA
Christmas bonus”.

Virgin’s salt and pepper shakers are frequently ‘borrowed’
ALAMY

Emboldened by the victory, Branson began to attack BA — mainly using humour. He
proclaimed “BA doesn’t give a shiatsu” to promote Virgin’s free on-board
massages for Upper Class passengers. When the BA-sponsored London Eye ferris
wheel had not been erected in time for the millennium, Branson flew a blimp over
it carrying a banner that read “BA can’t get it up”.


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By targeting BA directly, Branson pulled off perhaps his greatest coup. He
convinced consumers that Virgin Atlantic was a global rival to BA, offering all
the routes, comfort and reliability of a giant carrier. In fact it has only 44
planes and carries 5.3 million passengers a year on a handful of key long-haul
routes, compared with BA’s 276-strong long and short-haul fleet, which carries
43 million passengers all over the world. “The Virgin Atlantic brand punches way
above its weight,” says the branding analyst Rita Clifton.

Branson, David Frost and Christopher Biggins board Virgin Atlantic’s maiden
flight from Gatwick to New York, 1984
RICHARD YOUNG


The dirty tricks scandal was the first in a series of storms that Virgin
Atlantic has weathered: the Gulf war, the 9/11 terror attacks in New York, the
global financial crisis, and then Covid. Survival has come at a steep cost.
Branson sold a 49 per cent stake in the airline to Singapore Airlines in 1999,
which was later bought by the US behemoth Delta, with which Virgin now works
closely. Virgin Group, the holding company for all Branson’s ventures, retains
control with 51 per cent. After controversially asking for a state-backed loan
from his sunlounger at his Caribbean home during Covid and being publicly
rebuffed, Branson was forced to sell £550 million worth of shares in his space
flight operator, Virgin Galactic, as part of a £1.2 billion rescue package,
which later rose to £1.5 billion.

Virgin Atlantic celebrates its 25th anniversary

What has seen the airline through so many crises? Innovation and joy, Branson
says. “Lord King once said about me, ‘Why on earth is somebody from the
entertainment business going into the airline business?’ That summed up the
difference between Virgin and other airlines. I’ve always thought that people —
passengers and crew — want to be entertained, surprised, delighted. They want
originality and a smile.”

It’s true that Virgin pioneered many of the things passengers take for granted
today. As well as being first to introduce seat-back TVs, it was the first big
carrier to introduce premium economy; the first international airline to create
a bar with stools on board its jets; the first to offer customers a dedicated
security line at Heathrow; and the first to provide a limousine airport transfer
service and drive-in check-in. Lately it has introduced economy seats with extra
legroom, creating a new class of travel optimistically named Economy Delight.

The airline was the first international carrier to offer flyers a sit-up bar

It is also true that Virgin staff, 2,500 of whom Branson will welcome to another
40th birthday party in London later this month, act differently from employees
of other carriers. Branson gives them “the freedom to joke with passengers or
throw a line back at them”. He recalls an email he received shortly after he
started operations in Australia to illustrate his point. “A customer wrote to
tell me a story about an obnoxious guy who would not wait in the check-in queue
for a Virgin flight at Sydney airport, despite being repeatedly politely asked
to do so. The guy eventually marched up to the nearest Virgin check-in desk and
shouted ‘F*** you!’ at one of the female staff. Without hesitating she replied,
‘I’m afraid you’ll have to get in the queue for that too.’ ”


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Less liberal, until recently, was the dress code — red skirts for female
employees, burgundy trousers for male. Since September 2022 Virgin’s cabin crew,
pilots and ground staff have been allowed to choose whichever of the Vivienne
Westwood-designed uniforms they feel most comfortable in, regardless of gender.

Virgin Atlantic’s 25th anniversary TV ad

Virgin Atlantic may be the great survivor but there are dark clouds on the
horizon. After almost two decades of penny pinching that reduced what was once
the world’s favourite airline to the butt of jokes (“I’m flying Abba — anyone
but British Airways”), BA’s new CEO, Sean Doyle, has brought back free water and
snacks in short-haul economy and improved the food in all cabins on long-haul
flights. Its jets have plush new business-class and premium economy cabins and a
new first class is on the way.

Emirates, Qatar Airways and Etihad offer stiff competition on routes to Asia,
the Gulf and Africa, which is one reason why Virgin’s services to Tokyo, Hong
Kong and Sydney have all been axed and flights to Dubai are now only in winter,
and then just four times a week. The “Gulfies” have stolen Virgin’s clothes.
Each has a bar on board its largest aircraft. Virgin dumped the bar on its new
planes in 2019 in favour of a “loft”, which is a glorified bench between Upper
Class and premium economy. The Gulfies offer chauffeur services for business and
first-class passengers and have also introduced spas at their hub airports.
Virgin passengers have to pay for limousine transfers and the airline has closed
its spas.

Some Virgin staff say its tie-up with Atlanta-based Delta has diluted its USP —
its distinctiveness. They point out the new Upper Class suite is a Delta seat,
tarted up with some Virgin trim. Some even now call Virgin “Virgin Atlanta”.
Analysts agree. “Virgin may have been the first to do a lot of things, but it
hasn’t been a leader for at least 15 years,” says Henry Harteveldt of Atmosphere
Research Group.

Promoting Virgin’s new route to Toronto at Niagara Falls in 2001
ALAMY

Does Virgin Atlantic need to rediscover its innovative spirit to survive and
thrive again? Yes, says Branson without hesitation — starting with the bar. The
decision to replace the bar with the loft on new aircraft “was a dreadful
mistake. We’ll be bringing back the bar as soon as we possibly can.” Why was the
error made? Branson won’t be drawn — perhaps because he does not want to concede
what many at the airline suggest: Delta nixed it because it meant removing up to
four lucrative Upper Class seats. Branson simply repeats: “If we make a mistake,
let’s own up to it quickly and sort it. That’s what we’ll do.”


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He also promises “ridiculously good” new seats in Upper Class “better than BA
first class”, based on the vast two-person Retreat Suite on Virgin’s
hangar-fresh Airbus A330 jets. New routes to North America and beyond will be
announced soon, some of which will eventually be from Gatwick. The airline
withdrew from the airport during Covid but retained ownership of its take-off
and landing slots, leasing them to easyJet, and Branson says it will return. “It
matters — it’s where we started. I will twist arms.”

Is he worried that BA is getting its mojo back and will threaten Virgin? “No —
as long as we never slip up. That’s up to the team,” he says, glancing over at
Shai Weiss, the chief executive of Virgin Atlantic, who has joined his boss in
the Virgin hotel’s private apartment.

Charming locals as the airline launches flights to Mumbai in 2005
ALAMY

“Every decade we’ve had people talking about the Virgin Atlantic brand
disappearing,” Branson says. “It will outlive myself and, hopefully, outlive my
children and grandchildren as well.” And he can now reveal his succession plan.
He wants his children, Sam, 39, and Holly, 42, to take over the airline. “I plan
to keep it in the family and they plan to keep it in the family.” Holly is on
the board of Virgin Group and serves as its chief purpose and vision officer;
Sam works as an informal adviser to Virgin Group.

Looming over every airline is the giant carbon footprint of every flight.
Branson recently completed a transatlantic trip from Heathrow to New York’s JFK
on a Virgin Boeing 787 Dreamliner powered entirely by sustainable aviation fuel
(SAF). Critics dismissed it as a “Richard come lately” stunt, pointing out that
other airlines had run SAF flights before. Can Virgin Atlantic really be carbon
neutral by 2050, as he aims to be? “The point of the flight was to prove that
current engines can take biofuels and that it is safe. We did that. Now it’s up
to the fuel companies to supply the SAF. We have 25 years. It can be done.”

None of these questions will be on Branson’s mind when he jets into Las Vegas
from his home on Necker to cut Virgin Atlantic’s 40th birthday cake. “I couldn’t
be more proud of what everybody at Virgin Atlantic has achieved,” he will tell
guests at his pool party.

He has spent the past week finalising the guest list. Has he invited Willie
Walsh, the former boss of BA who in 2012 bet him that Virgin would not exist in
five years’ time? He needs no reminding of the stake: a kick in the balls. “He’s
very welcome to come,” Branson says. “We can toast the fact that Virgin Atlantic
is still here.” Will he claim his painful prize? “I think we’ve moved on from
that.”

Over to you, Willie. There’s still time to get to Sin City.



 1. Life & Style


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