Richard Branson’s Virgin empire shaken by spacecraft crash4 min read . Updated: 06 Nov 2014, 08:45 PM IST
What looked like a leaning toward the pre-eminence of the space business within Virgin a week ago dissolved with the loss of SpaceShipTwo
London: In a marquee the size of an aircraft hangar, Richard Branson politely brushed aside questions two years ago on Virgin Atlantic Airways Ltd, his best-known brand. Instead, he made clear the future lay in commercial spaceflight.
Launches with reusable craft carrying paying clients and satellites would soon become a reality, Branson, 64, told the assembled throng that included would-be space tourists and the head of the US Federal Aviation Administration. Now with the wreckage of his SpaceShipTwo strewn across the Mojave desert and a co-pilot killed in the 31 October crash, the direction for Virgin is less clear than at any time since the multi-billion dollar group was founded as a London record label in 1972.
“You can see the attraction of space travel for Richard Branson," said John Strickland, an aviation analyst at JLS Consulting who has followed his career since the foundation of Virgin Atlantic in 1984. “It’s really something that an entrepreneur can get excited about, literally a new frontier. In that sense space and aviation are very similar, except that one is undoubtedly very much more difficult than the other."
As a serial innovator with a sharp eye for the latest technology and a knack for upsetting the status quo in any industry, Branson’s business interests span casinos to banking, gyms to phone networks and retirement care to high-speed trains and book publishing. Some ventures flopped and were quietly buried, from Virgin bridal stores to Virgin Cola.
Branson, forever drawn to the next business frontier, fell for the challenge of space travel in the same way that the allure of aviation had caused him to found Virgin Atlantic in the mid-1980s, and ultimately to sell his once-beloved record label to EMI Group in order to keep the carrier afloat in 1992.
What looked like a certain leaning toward the pre-eminence of the space business within Virgin a week ago dissolved with the loss of SpaceShipTwo and the death of co-pilot Michael Alsbury in California on 1 October.
Immediately after the tragedy, a subdued Branson vowed “not to push on blindly". His space business has deposits from 800 would-be astronauts who have each paid $250,000 to travel to an altitude of 360,000 feet, experience weightlessness and view the curvature of the earth during a six-minute descent.
The revelation that the craft had not exploded but broken up, possibly due to the early deployment of a braking system as a result of pilot error, prompted Branson to come back fighting. He suggested the media had misconstrued the nature of the disaster because of an inherent scepticism about his project and suggesting a replacement craft is only months away.
“We are absolutely confident that there is no fundamental flaw," Branson said in a 3 November interview from Necker Island, the Caribbean retreat he owns.
All the same, Branson’s plan to board the first trip to the edge of space with his son next spring lies in tatters. The US National Transportation Safety Board has said it’s probe will span most of 2015, and the programme’s delay will likely be measured in years, according to Michael Blades, an aerospace and defence analyst with Frost & Sullivan in New York.
The executive told the Financial Times in an interview published on 1 November that Virgin Galactic would have a “halo" effect on the entire company. Branson now says he’s willing to reimburse any customer who no longer wants to fly into space, though no cancellations have been recorded since the accident and the group has in fact signed up more prospective astronauts, according to the billionaire.
Branson’s most prized asset remains Virgin Atlantic, founded as a self-styled underdog challenging the might of British Airways with a product that sought to restore flying glamour’s with unstuffy sophistication.
Yet after a heady two decades in which the carrier grabbed a lucrative chunk of the US-London corporate travel market while opening routes to other global hot-spots—with Branson taking centre stage at no-expense-spared inaugural parties from Las Vegas to Cape Town—the gloss faded as losses ballooned.
After selling a 49% stake in Virgin Atlantic to Singapore Airlines Ltd, Branson laid the foundations for what was to become Virgin Galactic in 2004, joining Microsoft Corp. co-founder Paul Allen in backing the SpaceShipOne air-launched rocket’s successful bid for the $10 million Ansari X prize offered to the first non-government reusable manned spacecraft.
While continuing to profess his fondness for Virgin Atlantic even as he joined with Scaled Composites in 2005 to found The Spaceship Co., producer of the ill-fated SpaceShipTwo craft, by 2008 Branson was seeking a new partner in the airline as Singapore Air indicated its willingness to exit. The search spanned more than four years until Delta Air Lines Inc. agreed to purchase the holding for $360 million late in 2012.
The Delta deal has proved transformational for Virgin Atlantic, propelling the carrier toward what chief executive officer (CEO) Craig Kreeger said on Wednesday will be a first annual profit in three years. Kreeger said he has exchanged messages with both Branson and Virgin Galactic CEO George Whitesides and offered to help in any way.
“Anybody in our industry knows that these kind of things are just dreadful and I feel the same distraughtness as I sense in those guys," he said. “I know what they’re doing now is trying to assess the cause and figuring out the game-plan for the future. I certainly wish them all the best." Bloomberg
Kari Lundgren in London and Thomas Black in Dallas contributed to this story.