Business

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Richard Branson's Entrepreneurial Airline
By [unknown placeholder $article.author$]
15 Sep. 2005 - 9:56:00 PM

An Entrepreneurial Airline

A classic example of the entrepreneurial approach is the way that Richard Branson established Virgin Atlantic in 1984, two years after the collapse of Laker Airways.  When Randolph Fields approached Branson for financial help in setting up a possible new airline Branson made two calls, the first to the reservations number of People Express, then the only low-cost carrier on the North Atlantic and secondly to Boeing to find how if he could do a lease and return deal on a Jumbo. People Express’s number was always engaged, indicating that his potential competition was either poorly managed or just very busy, Branson said, “It was that continual engaged tone on my telephone throughout Saturday more than anything else which triggered my belief that we could set up and run an airline.”[1] 

Virgin Atlantic made its first flight on the 16^th June 1984, Branson having first considered the idea in February of that year, in that time he concluded negotiations with Boeing the UK Civil Aviation Authority, with a reservations system, and arranged numerous other deals relating to engineering support, staffing and accommodation in the US and UK. Branson noted that, “Boeing were rather surprised at our tenacity: ‘It is easier to sell a fleet of jumbos to an American airline than just one to Virgin,’ admitted their negotiator after we had finished;”[2] the negotiations lasted two months.  Branson moved very quickly to put a deal together, but the lengthy negotiations on the details actually took some time, which seems to be a common pattern for creative deal-makers. However the start-up of Virgin Atlantic must still hold the all-comers record for the speed with which a new international airline became operational.

[Extract from “Framing the Outcome” – Andrew Palmer]