Screw it, let’s do it, says Branson – but is he still the man to save Virgin Australia and Atlantic?

“In most countries,” he said, shaking with his right hand and holding a rock in his left, “federal governments have stepped in, in this unprecedented crisis for aviation, to help their airlines. Sadly, that has not happened in Australia.”

Then, warming to his theme, he called out Qantas: “I want to assure all of you, and our competitor, that we are determined to see Virgin Australia back up and running soon.”

It seemed an extraordinarily defiant message from a man turning 70 in a few months, and who has long since lost his title as the world’s most famous businessman. The undertone was clear – Sir Richard fancies one more scrap. But has he really got another comeback in him?

To seasoned aviation watchers, it should come as no surprise. It’s a mentality he’s always been keen to shout loudly about, as seen in his infamous 2006 business self-help book, Screw It, Let’s Do It.

“If I want to do something worthwhile – or even just for fun – I won’t let silly rules stop me,” he says. “I will find a legal way around rules and give it a go. I tell my staff, ‘If you want to do it, just do it.’ That way, we all benefit. I don’t believe that that little word ‘can’t’ should stop you.”

Possibly, but this time though, he’s finding public opinion swinging against him for the first time in his career, especially back home in the UK.

On 23 March – a week before Britain entered its lockdown – Virgin Atlantic announced its decision to cut 80 per cent of flights and to ask all staff to either accept voluntary redundancy, a six-month sabbatical or to be placed on eight weeks of government-paid stand down. It didn’t take long for politicians, rivals and reporters to ask why he wasn’t footing the bill with his personal fortune of $8 billion, instead.

Labour MP Kate Osborne branded him an “absolute disgrace”; Ryanair boss Michael O’Leary argued Sir Richard was trying to “fleece” the British public; and Conservative MP Richard Fuller even totted up the numbers in the Commons to concluded Sir Richard could pay for his staff’s wages out of his interest alone. Martin Samuel, the nation’s highest-paid columnist, wrote, “‘Screw it, let’s just do it,’ is Branson’s business motto. This time, however, it seems he has decided to screw everybody, and leave it to someone else.” Ouch.

All of which caused a floundering Sir Richard to attempt a PR fightback. In an open letter to his staff, he said it was important they know “the facts”.

“Over the last month much has been said about me and our brand,” he wrote. “I know how much you all care about your work, your companies, and most of all each other, so I thought it was important for you all to know the actual facts.”

His fortune, he said, was not cash sitting in the bank, and he’s reinvested most of it back into the business. “The challenge right now is that there is no money coming in and lots going out.”

What he needed, he argued, was a bailout from the government: “This would be in the form of a commercial loan – it wouldn’t be free money and the airline would pay it back.”

It seemingly didn’t work. As of writing, the British government, like the Australian, has stood firm on providing a relief package. So, in a final roll of the dice, he offered Necker as collateral against a potential loan, pledging to “raise as much money against the island as possible to save as many jobs as possible”.

As the Daily Mail newspaper was all too keen to point out, “Despite Branson’s protestations that Necker Island’s zero per cent personal income tax rate had nothing to do with his decision to move there, his status as a billionaire tax exile is said to be one reason why ministers are wary of bailing out the airline.”

And they’re right: the Virgin Group has its headquarters in Paddington, central London, but it’s registered in the aptly named British Virgin Islands.

Meanwhile, back in Australia, and as his Oz airline neared collapsed, he watched on helplessly as options ran low, and public opinion turned against him at the other side of the kangaroo route. Treasurer Josh Frydenberg scathed that “the government was not going to bail out five large foreign shareholders, with deep pockets, who together own 90 per cent of the airline”, while Qantas chief executive Alan Joyce – revelling in it, if we’re honest – said any bailout of Virgin Australia would see the flag carrier compete against the state.

“The government can’t pick winners and losers,” he told Sky News, forgetting Qantas’ nationalisation in 1947. “The government has to be fair to every company. Whatever aid it’s giving to one company it must give to everyone in the sector.”

To think it all started so differently. Virgin Blue launched in August 2000 with 600 staff and just two aircraft, and within a few years was worth $2 billion. Powered by an average ticket price of just $132, its fleet raced to 40 jets. It stole a march on a then-lumbering Qantas by copying the low-cost model used to such devastating effect by the UK’s EasyJet, Ireland’s Ryanair, and the US’s JetBlue.

In those early days, it worked because the business only flew one type of aircraft, the 737-700 and 800 series, and hammered down turnaround times to just 30 minutes. Less time on the ground meant more time in the air, less wastage and bigger profits. They were smart, too, in how they utilised employees: check-in staff, for instance, often doubled as cabin crew, reducing delay when people called in sick. What is commonplace now was a minor revolution back then.

Fast forward to December 2004, and Virgin Blue was confident enough to start codesharing with bigger brother Atlantic to allow flights from London to Sydney and then on to Brisbane, Melbourne and Coolangatta. Sir Richard himself made a star turn for the then distinctly un-me too launch, posing on the wing of an aircraft with two bikini-clad models waving British and Australian flags at Charles Kingsford-Smith.

“Finally, British Airways and Qantas will have competition on the London-Hong Kong-Sydney route,” he declared. “Inevitably there will be a price war.”

But as it grew, it moved further away from its non-frills strategy that fuelled that early success, as Blue morphed into Virgin Australia. Fashion darling Juli Grbac designed the uniforms, superstar chef Luke Mangan rebooted the menu, lavish premium lounges glistened and business class launched on domestic routes. The so-called ‘capacity wars’ of the last decade saw Virgin become infatuated with becoming an equal to Qantas, at the expense of profitability. Just as its rival was quietly doing the opposite.

In 2015, Virgin Australia took its share in Tigerair from 60 to 100 per cent to challenge Jetstar, but at that point, things had started to get out of hand, as the young upstart turned stodgy veteran and became set in its ways. Loss followed loss followed loss. In fact, after its administration was announced in April, Deloitte admitted debts had climbed to an eye-popping $7 billion. Far, far higher than anyone previously imagined.

And so, Sir Richard now stands with a depleted fortune, government hostility and as a coronavirus pin up for selfish greed. But he does have a few aces left to play. The Virgin brand is still strong and, mostly, there appears to be good will among the staff.

When Virgin Australia’s cabin supervisor Cassy, for instance, delivered a teary farewell speech in late March as her plane began its descent, it became a viral sensation. “Thank you so much from the bottom of my heart,” she said. “We truly hope to see you in the sky again soon.”

And it’s also noted that the business maintains an extraordinarily good reputation with union the TWU, despite mass lay-offs, including the redundancy of all Tigerair pilots.

Now in administration, suitors are lining up. On the record, 10 “very sophisticated” parties are interested, though whispers put that figure at nearer 20, while state governments have gone to war in an effort to put money forward in exchange for a bigger presence in their capital city. Queensland Minister for State Development Cameron Dick even told potential rival bidder NSW to “back right off”, before adding, “There’s nothing more dangerous than Queenslanders with their backs to the wall.”

But perhaps more importantly, as the virus begins to recede, it’s increasingly likely that domestic flights will fire up far, far quicker than international. With the Australian market forming around 80 per cent of its network, and less clunky overheads than Qantas, a revitalised Virgin has the opportunity to capitalise on a once-in-a-generation opportunity. If Sir Richard could salvage even his branding, if not shareholding, he could well find himself back in the mix quicker than he thought.

“If you don’t have the right experience to reach your goal, go in another direction, look for a different way in,” he writes in Screw It, Just Do It. “There’s always a solution to the most complex problem. If you want to fly, get down to the airfield at the age of 16 and make the tea. Keep your eyes open. Look and learn.”
It may well be that, this time, he’ll have to keep his ego grounded, to get Virgin back in the air.