Yahoo Finance Sir Richard Branson: I thought 'Christ, the whole lot is going to come crashing down'
With his family holed up alongside him on Necker Island for the pandemic, Sir Richard Branson let his grandchildren into a secret.
The youngsters wanted to know how their "papa" came to find himself in the Caribbean paradise. The answer was simple, Branson explained, but they were sworn to secrecy. He was a pirate and decided to build a home on the deserted island after finding it during his adventures.
Branson’s family followed him to New Mexico last July to watch the billionaire fulfill a lifetime ambition on the maiden voyage of Virgin Galactic, his space tourism venture. As he hugged them all goodbye, six-year-old Etta, twin-daughter of Holly Branson, whispered in his ear for fear of anyone hearing. Branson smiles and recalls: “She said: ‘Papa, does this mean you are going to be the first pirate in space?’”
Today, Britain’s best-known businessman and self-styled pirate is back in ebullient form, holding court in Austin, Texas, welcoming Virgin Atlantic’s inaugural flight to the state capital from Heathrow. It is the airline’s first new US route since 2017 and, Branson hopes, marks a turning point not just for the airline, but for his whole empire.
The 71-year-old has, until now, been reluctant to open up about the pandemic and how it was the most difficult time in a colourful career. That Virgin Atlantic, the airline Branson launched in 1984, was taken to the brink of collapse is well-documented. But he now reveals that financial difficulties went much deeper.
“I'd spent 50 years building a business and I suddenly thought ‘Christ. Was it really worth that 50 years?’ It looked like the whole lot was going to come crashing down,” he says.
“We were in the cruise business. In the airline business. In the fitness clubs business. In the hotels business.”
“I thought I'd been quite smart and diversifying everything. But I had to sell 85pc of my shares in Virgin Galactic to keep everything on track.”
Coming into the pandemic with more debt than its rivals, there was strong suspicion among many in the aviation industry that Virgin Atlantic would be one of Covid’s corporate casualties. Too small to access the state aid provided to its larger rivals such as British Airways; and too big to access small company financial support. The airline was left floundering in a financial no-man’s land.
Branson’s apparent attempts to save the business made him a pandemic villain in Westminster. It was all a misunderstanding, he says.
As the first wave of coronavirus swept across the UK, Virgin Atlantic’s chairman wrote to the Government, stressing the need for financial support across all the aviation sector. Branson says this was incorrectly interpreted as a billionaire asking taxpayers for a bailout.
“We weren't looking for a begging bowl for Virgin Atlantic,” he says. “They wrote a letter without me actually knowing that they've written it.”
With the crisis intensifying, and airlines grounded on a scale never seen before, Branson later offered to mortgage Necker Island in return for financial support.
“On a purely selfish basis…I should have let Virgin Atlantic go on two or three occasions in my lifetime,” he explains, with the pandemic being one of them,” he says. “But it was something that we felt, I felt, that the public would be very sad to see Virgin Atlantic go.”
The airline’s fight for survival was further complicated by, what Branson claims, interventions by its bitter rival.
Branson’s decades-long feud with British Airways is well-documented, spanning the “dirty tricks” scandal of the early nineties and betting the flag carrier’s chief Willie Walsh in 2012 that Virgin Atlantic would survive the following five years - for which Walsh pledged to take a “knee to the groin” if he was wrong.
Because of its stronger finances and bigger scale, BA’s parent company IAG received billions of pounds in state-backed loans from the UK and Spanish governments.
BA “played a blinder” during the pandemic, Branson says. “Why were there never any articles about the [money] that British Airways got from the Spanish government [and from] the British government?
“They played a really good poker hand. Behind the scenes, they were sticking the knife in. They were saying they didn't need help [and], just hoping that we would topple.”
Branson and the team at his airline were up for the fight, however. “We just battened down the hatches. And everybody worked day and night to prove people wrong.”
“I don't think anybody thought we'd survive,” he says, staring intently. “I don't think you did, reading your articles.”
Ultimately, Branson rescued Virgin Atlantic “at the expense of another baby” - namely his space tourism company: Virgin Galactic. As a listed company in the US, the entrepreneur was able to sell his shares in the business and use the proceeds to save his airline.
He says: “[It was] in the same way that when, many many years ago, BA tried to drive Virgin Atlantic out of business… I had to sell Virgin Records to keep things on track.”
The toll that the pandemic has left on Branson is plain to see. He may have been thousands of miles away in the Caribbean, but it was hard not to take the attacks personally.
A new edition of his memoir, Losing My Virginity, will be released later this year with a section that sets out the pain of those difficult months.
“I kept a diary during it. And I've written exactly how I felt about it in the book that covers the Covid time and the successful space launch at the end of it.
“I was fortunate I had my kids and grandkids on the island [Necker]. And so you realise there are other very important things.
“It was a horrible, horrible time. But from our point of view, Virgin has come out, if you look at it, our brand is now stronger than it was in 2019.”
Branson has made little secret of his opposition to Brexit. He has branded it a “multi-generational disaster” in the past. He refrains, however, from saying the UK’s current cost-of-living crisis - with soaring inflation outstripping countries on the Continent - is an ‘I told you so’ moment.
“I've made my position clear that I believe that the UK will suffer for not being part of Europe,” he says.
“I still believe that to be the case, we'll just let history decide whether that is the case or not.”
At an event in downtown Austin a day after our interview, he cannot stop himself having a pop at ministers over the impending industrial action on Britain’s railways.
After being at the vanguard of privatisation, Virgin ran its last rail service in December 2019 after its bid to run the west coast line was deemed to have breached tendering rules.
“We transformed the British rail network, the staff had loved working for Virgin,” he says, shortly after kissing the shoe of a British journalist whose bag Virgin Atlantic had lost on the inaugural flight. “I notice the staff are on the verge of having a strike… That wouldn’t have happened when Virgin was running it.”
These days, Branson is arguably most outspoken about the Russia war against Ukraine.
Earlier this month he attacked French president Emmanuel Macron for calling not to humiliate Russia. Branson hit back, branding the remarks “insensitive and wrong” on Twitter.
“I was critical of the word he [Macron] used,” he says. “I was definitely surprised that he used that word because, you know, because I think when you're in such a war situation, it's got to be everything's got to be very clear.
“If you go back to the Second World War, if he'd been living in London, as De Gaulle, it was black and white: he wanted the Germans out of France. And I think it should be black and white until the Ukrainians decide differently.
“What Putin has brought upon the world is unforgivable. It's not just Ukraine that's at risk. It's Poland, there's so many potential countries that could be at risk if we don't stand firm.”
Branson says he is in regular contact with Ukraine president Volodymyr Zelensky.
He had hoped that the ‘The Elders’, a non-governmental organisation founded by Nelson Mandela and funded by Branson, could have prevented hostilities breaking out in the first place.
“I spoke with him [Zelensky] before the invasion on a couple of occasions because we have an organisation called The Elders that attempts to stop conflicts.
“And I was just trying to see if there's, if there was anything we could do to try to help sort of bridge the gap between Ukraine and Russia.
“I spoke with him the day after the invasion. He contacted us about whether we would consider - I think at that stage he did not believe that Putin was going to go as far as he was - he wanted to know if we could throw a concert in the Donbas region. And we are now looking at doing something in Poland.”
Ukraine aside, Branson is evidently in a better place and determined to put a difficult couple of years behind him.
“It's one of the most satisfying moments of my life, having the team [at Virgin Atlantic] confound everybody,” he says.
That Virgin Atlantic, the cornerstone of Branson’s empire, is even still flying at all is something to be proud of, he suggests. Well-known brands such as Pan-Am, Trans World Airlines and British Caledonian have fallen by the wayside since the first flight took off from Gatwick all those years ago.
“If I go back 38 years to the inaugural flight of Virgin Atlantic and I just remember sitting there looking around the cabin, with my wife and my daughter Holly sitting on my lap. And thinking: ‘Can this airline in 20 or 30 years time be as special as it is today?’
“Every flight is just about as good as it was on that very first flight.”
“Yes, Virgin Atlantic and myself, we all got attacked. But we’ve all come out really really strong.”
“I think we proved any critics wrong,” he says, fixing his gaze again. Then he smiles.
