Ready or Not, China: Here Comes Richard Branson's Virgin
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Illustration for TIME by Tom Dunne
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By STEPHEN SHORT
Love him or hate him, Richard Branson has a knack for out-maneuvering the corporate Big Boys and raising an irreverent finger their way in the process. The battle between his 15-year-old upstart Virgin Atlantic and giant British Airways reflects the David and Goliath tussle he has taken to every playing field. Galling it will be for BA, which Virgin beat for the twice-weekly route from London to Shanghai, when Branson and his entourage step out of a Virgin A-340 in triumph on the tarmac at Shanghai's Hongqiao airport after the inaugural flight May 22. For good measure, Branson plans eventually to equip Virgin's planes with the Union Jack livery that BA has given up.
"No ordinary airline," goes Virgin Atlantic's slogan. Indeed not. No other airline also dabbles in music, movies, beverages, financial services, cosmetics, book publishing, trains, hotels--or has its CEO dress in bridal wear for publicity stunts or appear in American TV sitcoms. And at a time when many airlines are reducing capacity or canceling plane orders, Virgin's aggressive expansion is raising eyebrows. Having won the Shanghai route, Branson is discussing a possible link with China Eastern Airlines for connecting flights to other mainland cities and Hong Kong. Overall, the Virgin Travel Group plans to add 2,000 new employees over the next 12 months.
The brash, 48-year-old Branson is sharpening his focus on Asia. He has helped push talks between British and Indian officials to increase routes between the two countries, even as United Airlines recently decided to pull the plug on its daily London-to-Delhi service.
Japan is another priority. Virgin already operates seven weekly flights from London to Tokyo and has set up 24 Virgin stores across the country. In May Branson plans to open a 14-screen cinema in Hisayama with two more to follow in the Tokyo and Nagoya areas before year-end. And Virgin will open its first pub-club, the Barge Inn, in Narita City.
As Virgin expands, flyers in Asia can expect the same level of service that has won the airline many devoted customers. In 2002 Virgin Atlantic will be the launch customer for 18 A-340 600s, a stretch version of the current A-340 capable of carrying 125 more passengers. Branson plans to install first-class facilities, including gyms, showers, bedrooms and double beds in the cargo hold, Internet access and a button on the armrest that will allow passengers to inform the inflight staff when they want their meals.
The only market that is proving tough to crack is the United States. Virgin recently shelved plans to start a U.S. domestic carrier, due to tough American laws that restrict foreign ownership to no more than 25%. Still, the group is on a roll. Indeed, the airline is a platform for Virgin's other products. The entourage that will accompany Branson to Shanghai won't be along just for the ride. A team of executives will explore the potential for expanding other group companies in China, including Virgin Megastores, Virgin Cinemas and Virgin Cola. The group's Vie cosmetics are already manufactured in Shanghai, as are the airline's inflight toiletry kits.
Virgin does have its detractors. Critics charge that, as it expands, the group is in danger of mirroring the mega-corporations Branson has spent a career attacking. Indeed, some argue, he has diversified the group so broadly that brand recognition is weakening. But Branson's style remains inimitable. He now says he may ground his airline at the millennium, to guard against a potential Y2K disaster. After all, it wouldn't do for a cyber-Goliath to rewrite David's story.
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April 12, 1999
Hot Deals
The Grand Hyatt Shanghai--tallest hotel on the planet--is now open for business
Web Crawling
For a company so obsessed with branding and image, the Virgin Atlantic website is a fairly amateur presentation
Short Cuts
The next few months will bring some of the world's top dancers and musicians to Asia
Detour
The Boathouse Hotel in Phuket could almost be considered a restaurant with rooms
Main Feature
Love him or hate him, Richard Branson has a knack for out-maneuvering the corporate Big Boys and raising an irreverent finger their way in the process
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