Richard Branson
The Travel Industry Association this month honored Virgin Group founder and chairman Sir Richard Branson with its first Steve Fossett Innovation Award. Named after the Chicago adventurer and businessman who last September vanished while piloting a plane over the Nevada desert, the annual award is to be presented to a "worldwide travel industry leader who has broken new ground, pushed boundaries and revolutionized the travel industry, leaving a legacy of long-lasting beneficial change," according to TIA. Adventurers and friends Branson and Fossett frequently teamed to break records in ballooning, sailing and flying. Branson in 2005 sponsored Fossett's solo nonstop flight around the world in the Virgin Atlantic GlobalFlyer. TravelCom co-chair and Forrester Research vice president Henry Harteveldt interviewed Branson about his friend Fossett, innovation, biofuels and open skies. An excerpt follows.
What drove Steve to be an innovator?
Steve was quite the most remarkable adventurer ever to have lived. He retired at age 55 without any world records, and between 55 and 65 decided to try to become the best in the world at 20 different sports. He was just somebody who decided, "I'm not going to sit in front of the television, I'm going to challenge myself." He died, in typical style, looking for a site where he could break a land-speed [record] and go over 1,000 miles per hour. The record he was most proud of was the Virgin GlobalFlyer. We built a plane with him which was made of composite materials. The important thing for the industry was it was pioneering composite materials. The [Boeing] 787, when it's finally delivered, will be made largely out of composite materials--much lighter planes, much more fuel efficient planes, much less damage to the environment. With world records often come breakthroughs that will be useful to you and me.
Entertainment is obviously a big part of Virgin, but how does entertainment factor into service?
When we announced we were going into the airline business, the head of American Airlines said, "How on earth can somebody from the entertainment world possibly consider running an airline?" I think that was the mistake that big carriers had: They did not realize that people who were stuck in a seat for seven or eight hours, or 14 hours, actually want to be entertained. You want to be entertained by every little thing being right: the attitude of the crew, the quality of the food, the quality of the entertainment system. We put seat-back videos in our economy class cabins about seven years before anybody else did. Once a kid sat in a Virgin plane, they weren't going to fly on a plane that didn't entertain them. So I think coming from an entertainment background has really helped us. I think all aspects of business should be trying to entertain people.
Why is innovation so lacking at different airlines in different parts of the world.
I hate to say this to an American audience, but American-run airlines are the worst in the world. If you go to the Far East, you've got airlines like Emirates and Singapore--there are good quality airlines in the world. But in America, what seems to have happened is the carriers have gotten far too big. They go into this thing called Chapter 11 in America, which is bizarre. In Europe, if a tree dies, it's dead and it makes room for another tree to come up and take its place. In America, if an airline dies, it comes back to life again with all the same problems that it had before. Generally speaking, it dies again and it's incredible it keeps on coming back to life. What should happen in business is when a business fails, it closes. That makes room for innovative new companies. It would be quite good for America to consider changing the Chapter 11 situation so when a company fails, let it fail and leave room for other people.
Should foreign carriers be allowed to invest in U.S. airlines?
Of course. What is so precious about the airline industry? I can set up a bank in America, I can set up a shop in America, I can own Disneyland. I can do anything I want in America. In 1939 in order to stop Hitler from running an airline, they decided to introduce a law to stop foreigners owning airlines. Basically the American carriers have used it as a protectionist way to stop foreign ownership. What should happen is that there should be open skies throughout the world. American carriers should be able to set up in Europe and European carriers should be able to set up in America. Imagine Singapore Airlines or Emirates buying into American or United--the improvement in quality would be dramatic.
A few weeks ago, Virgin Atlantic did a test with biofuels on a Boeing 747 between London Heathrow and Amsterdam. Is that geared more toward the environment or a way of looking at how Virgin Atlantic reduces it's fuel costs?
About three years ago, Al Gore came to my home and gave me the "Inconvenient Truth" lecture before the film came out. The inconvenient truth to me, being an airline owner, [is that] it was clear we were contributing to destroying this beautiful world we live in--not in a major way, maybe 3 percent. So I decided that we had to do something about it. First of all, we pledged 100 percent of the earnings that we made from our six airlines over the next 10 years we'd invest in trying to come up with clean fuels. As a result of that pledge, we're now trying to come up with a fuel that planes, cars, buses and lorries could use that will have no carbon output whatsoever. First we had to prove that a 747 or a jet engine could fly on a clean fuel, and our flight between London and Amsterdam proved that. Most people were very skeptical; they said it would be impossible because biofuels freeze at 15,000 feet. Now we have to come up with a fuel that won't damage the food supply--something like an algae. It will be tough, but we're working extremely hard. The end result will be that we in the industry will be able to fly our planes without feeling guilt or hurting our children or grandchildren. Hopefully, we'll also add a competitor to the oil industry which has a stranglehold on the price of fuel that has resulted in four airlines going bankrupt in the last five days--three in America, one in Hong Kong--and the likelihood of others topping over soon. We're running out of oil, so we do need an alternative source.