As for the £1 we paid them for our half a billion pounds’ worth of shares? Brian McBride framed the coin and put it on his office wall at T-Mobile.
CHAPTER 8
The World Turned Upside Down
Holly was just three years old when she first told us she wanted to be a doctor. Joan was driving to Kidlington from London, on a glorious spring day in the Oxfordshire countryside, when Holly made the bold announcement. I suspected the influence of our lovely London neighbor Dr. Peter Emerson, whom Holly had always adored, behind her plans.
“That’s lovely, darling.” Joan turned round to look at our daughter. “But to be a doctor takes a lot of training. You’ll have to study for a long time.”
“I don’t mind,” Holly said.
“Plus you’ll have to leave home to do it.”
At this, I could see Holly’s face fall in the rearview mirror.
“Oh,” she said. “I don’t want to leave you and Dad!”
“Just wait until you’re older,” Joan laughed. “By the time you have to leave home you’ll be happy to!”
A decade and a half later and I found myself driving Holly and the family. This time, there was slightly less room in the vehicle: my three-year-old daughter was now nineteen, and the car was packed full of all her essential belongings. We were on our way from Oxford to London, where Holly had a place at University College London to study medicine.
It was an emotional time for us, preparing to say good-bye to our little girl, even though she wouldn’t be too far away. Considering my own struggles with education—I dropped out of school at fifteen—I was incredibly proud of Holly for having done so well at school. I have always thought that Holly and Sam have been fortunate to inherit the best features of both of their parents, and not take on some of my own flaws (obviously my darling wife does not have any flaws!).
As Holly was growing up it was clear to Joan and me that she was very single-minded and bright, just like her mum. She was also independent and adventurous, but perhaps a little more grounded than I had been at her tender age—or any age for that matter. She excelled at schoolwork and had a real talent for science and math, subjects I’ve never really got to grips with.
The drive into London came at the end of one of those summers when everything seemed to feel in a good place. We’d spent it together as a family on Necker, and I’d enjoyed quality time playing with the kids and catching up with my parents. Having finished school the year before, Holly had been away on her gap year in Canada, learning to be a ski instructor, and it was great to have all the family back together for those summer months. I knew that things would be different come the autumn, and was determined to make the most of that precious time.
As well as the family, the business was also in a good place. I took the opportunity of the summer break to take stock and go through the books. We had agreed on a more methodical strategy for investing in new businesses, acting as a branded venture capital company and investing in areas that truly suited us. While not every move worked, the likes of Virgin Mobile and Virgin Blue were off to incredible starts as our fastest-growing companies ever. Virgin Active had risen quickly to become the world’s third-largest health chain. What’s more, in 2001 Virgin Atlantic was the only profitable airline flying across the North Atlantic. I concluded that the Virgin Group was the healthiest it had ever been and felt unusually content.
I felt slightly less pleased when we got to Holly’s new student digs—Ramsey Hall, right on Tottenham Court Road. The problem was the difficulty I had in trying to build the desk I’d bought Holly from IKEA the day before. I couldn’t make head or tail of the instructions, and soon everyone was chipping in with an opinion on how it should be put together.
“I told you we should have got a MALM desk,” was Joan’s unhelpful comment as we looked at the pile of wooden parts and metal screws in front of us.
“I thought we had.”
“This is a GALANT.”
“What’s the difference?” I obviously didn’t speak IKEA.
“I’m not sure, but it looked a bit easier to put together.”
“Just pass me that Allen key,” I said, trying to sound as though I knew what I was doing, even though I had no idea.
With Holly trying to help and Sam wisely keeping well away from the chaos, I carried on, to no avail. In the end, we decided to go out for dinner, and return to the construction conundrum on a full stomach. That seemed to do the trick, and we were able to leave Holly with her desk up and in more or less one piece.
Right from the start, Holly settled in well at university. She immediately fell in love with her course, and met new people who would become lifelong friends. She was a diligent daughter, too, in phoning home regularly and coming back to Oxford for weekends. I would often find her and Sam upstairs playing computer games on the Nintendo just as they had always done, especially Holly’s favorite, Donkey Kong Country. But she understandably came on fewer family trips, and, as parents, we had to adjust to her new life.
Sadly, it wasn’t going to be the only change I had to get used to that month.
—
On Tuesday 11 September 2001, I caught the Eurostar to Brussels for what I expected to be a relatively humdrum day giving a speech to Members of the European Parliament about the need for pro-competitive legislation in the automobile industry.
I had just started my speech when I noticed an assistant pass a note to the committee chairman. I’ll never forget the look on his face as he read the note. I immediately knew something was wrong and paused as he stood up to relay the news to the room.
“Terrorists have attacked New York,” he announced to the shock of everyone present. “A number of aircraft are involved.” As everyone in the room started exchanging worried glances, murmuring to each other and reaching for their phones, the chairman continued. “This building could be a target for another attack. If anybody wants to leave, you are of course welcome to.”
I watched as the murmuring grew louder and a number of people got up and walked out. The vast majority, though, stayed.
“What do you think, Richard?” the chairman asked me. “Are you happy to proceed?”
Like everyone else gathered, I had no idea how serious the situation really was. Given the number of people who had decided to remain, I felt I had to continue. Somehow I struggled through my speech as quickly as possible; all the while my mind was thousands of miles away. Were any of our planes involved? I didn’t have any details, but knew instinctively we had a crisis on our hands. Within the hour, I was on the Eurostar back to London, desperately trying to get through to my team on the phone.
Will Whitehorn was the first to call. “It looks like terrorists have taken over four aircraft,” he told me as the train sped away from Paris. “The Twin Towers have just come down and there could be over 10,000 dead. Reports are also coming in of other aircraft being hijacked. They’ve closed US airspace. In your absence, we turned Virgin’s planes back. Only three had passed the point of no return. Since then they’ve shut US airspace. I suggest we talk in more detail once you’re back and gather tomorrow morning first thing at Holland Park.”
My instant reaction was utter horror at the sheer scale of the attack and immediate concern for everyone in New York. A woman in the seat next to me cried while frantically trying to get through to friends and family in the US on her phone. As I did what little I could to comfort her, I began mentally listing the people I knew in the city. Hoping against hope that they were OK, tears were soon streaming down my face at the magnitude of what was taking place.
When I got back to the office, I watched the horrific footage of the planes hitting the Twin Towers for the first time. Images of people jumping out of the buildings soon followed. At that moment, all my businesses and the fact I had an airline to run faded into insignificance. Nothing else mattered much after seeing that.
Instea
d, I went home to see my wife and kids and check they were OK. Joan had been in Oxford having lunch with friends when Holly had called with the news.
“Get to the television now!” she’d told her.
Joan described how she had viewed the attacks in horror in a little clothes shop next door to the restaurant.
“It felt like watching a computer game,” she told me, as we huddled together on the sofa. “It didn’t seem real.”
I thought once again how lucky I was to have my family. And how short and precious life can be.
—
The following morning, as heavy as my heart was I knew that business had to go on. Virgin Atlantic’s management team, led by Steve Ridgway, had already initiated emergency protocol by the time Will, Richard Bowker, Patrick McCall, Mark Poole, Simon Wright and I gathered in my living room for a dawn crisis meeting.
As well as the terrible human and emotional loss, there were severe business implications and many thousands of jobs at stake. The decision by the team to turn our aircraft around had been a wise one, and we saved lots of money by having the planes grounded in the UK. The situation would also have been even worse if our deal to sell 49 percent of the business to Singapore Airlines hadn’t gone through the year before. But even so, the overall picture was potentially precipitous. We estimated canceled US flights and customer drop-off meant our airline would lose £1.5 million per day. Within a few months, we could be looking at losses of hundreds of millions of pounds.
I began making calls. Firstly, I spoke to our bankers to assure them our cash position remained solid. Then I called our rivals at British Airways and other airlines to discuss a commonsense approach to the crisis. BA head Rod Eddington was helpful as we suggested working together to urge the government to support all UK airlines once US airspace reopened.
“Good on ya, mate!” he agreed, confiding that BA were expecting an £8 million daily loss.
Going straight in to bat, I called Transport Secretary Stephen Byers to implore the government to stand up for UK airlines’ interests. I knew that our competitors in the States were already getting huge support and cash handouts from the US government. They also had the luxury of going into Chapter 11 administration if necessary. This would mean they could declare bankruptcy while continuing to operate, only partially paying back debts and effectively wiping the slate clean. This was never an option for us in the UK. I told Stephen that we needed decisive action from government if we were going to get through this.
That one day was to change our business instantaneously. Difficult decisions had to be made internally. In the coming days we had to renegotiate our bank lending and aircraft contracts and restructure. Over the next few months, capacity to the US was cut by one-third, and we began expanding into markets such as India, China and Nigeria. We flew larger planes, such as 747-400s, on busier routes to Africa and shifted the smaller aircraft like airbuses to North Atlantic flights.
But the ramifications didn’t stop there. To keep the business afloat, we were forced to make more than 1,200 people at Virgin Atlantic redundant—the first mass redundancy I’d ever had to authorize. Handwriting many of the redundancy letters with Steve, and speaking personally to as many of our people as possible, was one of the hardest and most painful things I’ve ever done. I was devastated so many people had to suffer such hardship.
At the same time, I knew there was little choice. In extreme situations like this, you have to move quickly. If we didn’t lose the few, we could have lost everybody. It was that serious. To their eternal credit, the team took the bad news with remarkable class and professionalism. Lots of older and part-time employees offered to make way voluntarily, while we offered unpaid leave and gave part-time work where we could. We promised those who lost their jobs they would be the first we’d rehire when the airline recovered—and thankfully most did return in the next couple of years.
Ensuring Virgin Atlantic’s survival was paramount—if the company went bankrupt, the heart of the Virgin Group would be ripped out. As a result, anything not bolted down was up for sale. Selling one thing to pay for another and juggling assets with cash reminded me of playing Monopoly: we could have done with collecting £200 every time we passed Go! Instead, we ended up selling some small hotels in the UK, including Raymond Blanc’s Le Manoir aux Quat’Saisons in Oxford. Most agonizingly for my family, we were forced to sell our favorite holiday escape, La Residencia in Deia, Mallorca. All the while, I kept thinking of the famous quip Evel Knievel once told me: “made $60 million in my lifetime, spent $61 million.”
As 2001 became 2002, my upbeat mood of the previous summer had vanished completely. I felt low, upset at having to sell businesses and lose people, and demoralized as the world appeared to be heading toward war in the wake of 11 September. I tried to spend lots of quality time with my family and made an effort to be cheerful and visible around our staff. They, I have to say, were fantastic. It would have been understandable if morale had dropped, but everyone pulled together and worked harder than ever.
Even during these direst of times, we continued to attempt to innovate and improve things for those flying with us. We became the first airline to install bullet-proof doors in our cockpits. The Kevlar doors meant our passengers knew they were that little bit safer on our planes: it was a policy that was soon adopted by other airlines. At the same time, I tried to do what I could to those affected by 9/11: we offered complimentary flight tickets to New York for dozens of grieving relatives of those lost on that terrible day.
Throughout, I tried to lead by example. As soon as US airspace reopened I flew to see New York mayor Rudy Giuliani, and encouraged others to resume flying to the Big Apple. The mayor handled the crisis with grace and I offered to throw a party for him at the Roof Gardens in London to raise further funds to support New York. On 13 February 2002, Sir Paul McCartney graciously agreed to perform to help raise money for the recovery efforts. As Paul, Rudy and our guests gathered around the piano for a singalong of “Let It Be,” for the first time in a long while there was a hint of optimism in the air.
Tensions within the business were still running high, however. In the months that followed, we continued to adapt Virgin Atlantic’s business model still further and began a big push into the Caribbean markets. Such was the continuing pressure that when one of our executives questioned this strategy, I was uncharacteristically short with him.
“We’ve got to send the planes somewhere!” I snapped at him.
The tough aviation conditions had little impact in Australia. With Ansett in voluntary administration, we seized the opportunity and were able to expand rapidly, taking over their terminals and slots. We had 3,000 wonderful staff, forty-one Boeing 737s flying millions of satisfied customers and more than 30 percent of the market. On 8 December 2003 we floated Virgin Blue on the stock market for A$2.3 billion. A$2.3 billion! This, the same airline we’d started with A$10 million only four years earlier, and had rejected a A$250 million offer only two years previously.
The Australian aviation landscape was changing, and I pressed ahead with getting the British rights to fly to Australia with Virgin Atlantic, expanding our reach in the country. All sorts of so-called airline experts came out of the woodwork, claiming our plans were a “lot of hot air.” I knew they were being planted by Qantas, so I wrote to the Australian and challenged their CEO Geoff Dixon. If Virgin Atlantic was flying to Australia within eighteen months, he would have to serve as cabin crew on our inaugural flight. If we didn’t enter the market, I would wear a Qantas outfit on their plane from London to Australia. To top it off, we Photoshopped a picture of Geoff’s head onto the body of a beautiful lady in a Virgin uniform.
“We’re running an airline,” Geoff wrote back to me, “not a circus.”
I didn’t mind a jot—Qantas shares dropped by 3 percent and Virgin Atlantic began flying to Australia in December 2004—just in time to win the bet, though I’ve yet to
see Geoff in drag!
For Virgin Atlantic’s core business, meanwhile, the new strategy was working. To our relief, the markets began to settle down. I remained very hands-on because I loved working with the airline team and felt personally responsible for it. I wanted to do everything I could to generate more jobs and re-hire more people. I carried on writing and sending handwritten letters to staff, and continued to lobby ministers to secure additional slots for us at Heathrow. I made sure I was on every inaugural flight to get our routes off to the best possible start, and stayed in the same hotels as the staff to keep my ear to the ground on how things were really going.
Throughout, I liaised regularly with Steve Ridgway. He is a personal friend, whom I had met when we took on the Virgin Atlantic Challenger expeditions, breaking world records together. He was incredibly creative, quickly moved through the ranks to become chief executive and coped brilliantly with the 9/11 crisis. He was smart enough to surround himself with top-quality people, such as Julie Southern, who took on lots of hard negotiations with the likes of Boeing and Airbus.
—
Aviation has never been the same since that September day. Looking back, I think we coped as well as we could have done. I am proud of the way both Virgin and also the airline industry more generally pulled together.
Back in Holland Park in the aftermath of the attacks, the September sunshine gave way to gloomy skies that matched our moods. Such was the dizzying pace of events that I had completely forgotten a photographer had an appointment that evening to take some pictures of Will and me for a National Portrait Gallery exhibition, “Managing Partners.” I half hoped they might have forgotten, too, but they turned up, and we trudged outside to a bench to have our photo taken. Will and I were both feeling very bleak and preoccupied, hadn’t slept in two days, and looked extremely bleary-eyed. I’ve still got the photo that went up in the gallery, and it captures all too well our overwhelming feelings, shared by so many, of those dark days: of uncertainty, of sheer exhaustion and, most of all, of sadness.
Finding My Virginity: The New Autobiography Page 7