Our columnist Frank Kane interviews Sir Richard Branson once again. How have Sir Richard's priorities changed since those hectic days when Virgin was growing at a prodigious rate?
Sir Richard Branson’s last big challenge
Sir Richard Branson is looking well, even mellow. After the strain of an overnight flight from New York, the Virgin boss is relaxing on the terrace of the Mina a’Salam hotel in Dubai’s Madinat Jumeirah, topping up the perma-tan, and fidgeting with an iPad, an assistant by his side.
I am rather nervous. Apart from a few words and a man-hug in a frozen street in Davos a few weeks back (which led to the Madinat meeting being set up), it must have been five years since I last spoke to him, and then only fleetingly when he visited Dubai to launch his radio station in the emirate.
When I get his attention away from the iPad, there is the big smile, firm handshake, and some pleasantries. I show him pictures of my children, he tells me about the fire at his Caribbean home on Necker Island, which destroyed all his carefully preserved handwritten notebooks. I remember the notebooks.
For a decade or so from the early 1990s, he and I had regular contact, and not always on the best of terms. As a journalist in the British business press, I covered the corporate affairs of Virgin closely.
I would like to think I reported rigorously but fairly on the fast-changing Virgin empire in those days; he did not agree, and his reservations, even accusations, were recorded in the notebooks.
But that was a long time ago, and we had buried the hatchet several times since.
What I want to know now is this: how have his priorities changed since those hectic days when Virgin was growing at a prodigious rate, when he had a finger in every corporate pie in the United Kingdom and elsewhere?
In short, what does an entrepreneurial businessman, with a “cool” reputation and a youth-oriented brand, do when he is approaching his mid-60s?
“Back then, most of my energy went into building new businesses. Now my personal time is spent more on the not-for-profit side,” he says, listing the names of a host of worthy causes, dealing with such pressing current issues as the environment, illegal drug use, governance and the like, mostly gathered under the Virgin Unite charitable umbrella.
On drugs, his message is the “war” on the illegal trade has been lost, and a new, less criminally oriented approach, like that of Portugal, is needed.
On the environment, he is busy organising the Carbon War Room, an organisation that is urging business and industry to dramatically reduce carbon emissions.
He has managed to get 10 Caribbean governments to sign up to a formula to make the region a carbon neutral zone.
He singles out Abu Dhabi for praise in the environmental sphere. “They have had the foresight to realise that there is only a limited amount of energy out there, and they have got one of the biggest plans in the world for clean energy. I’m impressed by what Abu Dhabi and the UAE are doing on the environment,” he says, dropping in that he is a judge on the Zayed Future Energy Prize.
That is what he says motivates him now: tackling big global problems with the same energy he used to build Virgin into a top global brand. “I’ve made as much money as I’m ever going to need, and I find this more satisfying.”
But there is one big challenge left, which he hopes could also be a successful commercial enterprise: space travel.
For the past decade, he has been pursuing the latest in a series of aerial passions, after aviation and ballooning. His Virgin Galactic company (in which the Abu Dhabi investment vehicle Aabar Investments has a US$300 million stake) has suffered setbacks and delays, notably an explosion three years ago at its American headquarters.
“We’re finally there on space. We have a launch date this summer, or at least I hope we have a date. By September, I hope to have gone to space. It has taken longer than we thought, but what people forget is that it is rocket science. It is complicated. But now every box has been ticked and we’re nearly there,” he says.
The 10 years of waiting has not dampened his enthusiasm. “It’s exciting in many different ways. We can put people in space, we can put satellites in space. We can put a whole array of satellites around the world, which would have a big effect on telecommunications [another of his businesses].
“Ultimately we aim to provide supersonic sub-orbital travel between cities. We’re still dreaming, but we’re nearly there.”
Then he goes back to an earlier passion, civil aviation. Probably the most enduring of the brands in the Branson portfolio is Virgin Atlantic, the airline he founded 30 years ago, round about the same time Emirates Airline was being hatched in Dubai.
“It’s remarkable what the Middle East has achieved, it would be a different market if it wasn’t for them. Abu Dhabi and Dubai would appear much smaller on the global map if it wasn’t for Emirates and Etihad. You have to take your hat off, and they’ve done it with great style and panache.”
Sir Richard contrasts the UAE aviation experience with his own. “In 30 years, Virgin has still only got 3.5 per cent of the slots at Heathrow. We came to a full stop because the UK government didn’t have the courage to expand at Heathrow. That’s the difference between Britain and, for example, Dubai – entrepreneurial drive.
“There is a danger the “Great” in Great Britain will be superfluous unless the government makes some brave decisions.”
On the recent decision to halt Virgin flights to Australia, he says it was an entirely commercial decision. “We were losing a tonne of money on it, US$8 million a year. An independent airline has got to be pragmatic, and focus on the routes where you can make money.”
In the 1990s, he sold Virgin’s first big money-spinner, the eponymous record label, to focus on aviation. He insists now that he would never sell the Virgin Atlantic business, in which he owns 51 per cent, with the rest held by the American airline Delta.
“It’s very unlikely we would ever go below the current shareholding level. We did it [the deal with Delta] because British Airways had joined up with American Airlines, and we felt we needed a big brother in Delta. But we’ll see the benefit of it this year. It represents real competition to BA and an enormous advantage to the bottom line.”
BA, of course, is the old adversary. The legal battle with the UK airline over “dirty tricks” in the 1990s was a baptism of fire for him and for the Virgin brand (and also a source of much of the content regarding myself in the notebooks).
“We’re still competitive, because the travelling public needs competition. But it’s not as intense now. They’re not trying to push us over a cliff now, and I’m not going to waste energy and time on them.”
One of his hallmarks over the years has been his mastery of the public relations arena where much of the brand-building of Virgin has been done. But recently there has been a crop of negative coverage in the UK media about him and his businesses, questioning their long-term sustainability, and his own personal motivations.
“I’ve got no complaints about my press coverage over the years, as 99 per cent of it has been positive. I’m not going to dignify the recent stuff with any comment,” he says, referring specifically to one robust British critic.
“Virgin is as strong as it ever has been, and I don’t need to bother myself responding to ridiculous claims.”
On his decision to live full time on Necker, he is adamant it has nothing to do with wanting to avoid paying UK tax.
“I bought the island 28 years ago and just want to spend more time there. I’ve got plenty of money, I don’t need to go and live somewhere else to get away from tax. My companies all pay tax, and I give a lot of money to charity,” he insists.
And, after a few words about the pleasures of tide surfing, swimming and playing tennis with Roger Federer on Necker, that is that. We exchange farewells, shake hands and part, he off with a photographer for another photoshoot, I off to write about him.
It has not been the strained, tetchy interview I had feared. He was as open as most businessmen, and on the whole explanatory, rather than defensive.
As I jump in a taxi outside the Madinat, I realise there are still some questions unasked, or unanswered: the rationale for seeking backing from Abu Dhabi for his Virgin Money business; details of the big deal in the leisure sector he is negotiating with UAE investors.
But my only real regret was about the notebooks. Now I’ll never get to actually see what he wrote about me.