Love him or loathe him, the brazen outburst by Sir Richard Branson at the delivery ceremony for VAustralia’s first Boeing 777-300ER drew gasps of surprise, even if he was speaking publicly about what many airlines have been talking about privately – Boeing, 787, delays and the recent machinists strike.
“If union leaders and management can’t get their act together to avoid strikes, we’re not going to come back here again. We’re already thinking, ‘Would we ever risk putting another order with Boeing?’ It’s that serious.“
Image courtesy of Boeing
“The strike hurt hundreds of thousands of our passengers,” said Branson.
“It messed up Virgin Atlantic, it messed up Virgin Blue in Australia, it ruined people’s Christmas holidays. It was absolutely and utterly ghastly.”
“We’re already thinking there’s another lot of planes we want to order. Do we give it to Boeing or should we go to Airbus, which doesn’t go on strike?“
“We have a choice. Do we have to come back to Boeing? If there’s a danger of ever having another strike, we won’t,” Branson said in the Seattle Times.
Cry us a river, Mr. Branson – you’re not the only guy who was affected by the strike – bigger and better run airlines managed to cope and the tirade of criticism at Boeing is typical of him- playing to the limelight of the media bandwagon having been out of it for almost a year.
Virgin Blue still has around 19 737′s yet to be delivered while Virgin Atlantic just has 787-9′s on order. Admittedly, the IAM strike set back many deliveries, yet Virgin Atlantic cannot have been disadvantaged since its 787′s are not due till at least the 2012-3 timeframe. Rather melodramatic, n’est-ce pas?
Even more laughable is Branson’s claim of passenger angst.
“We had to buy tickets on other airlines and scramble to get seats which weren’t available. The financial damage in an industry where the margins are minute is catastrophic,” he bemoaned.
Well, lets have a look at what CEO Brett Godfrey revealed upon landing in Los Angeles with the new 777-300ER.
Godfrey stated that forward bookings for VAustralia from launch through to July 2009 had load factors of around 40%. Now, if the bosses at Virgin cannot facilitate such low passenger figures from launch, coupled with the fact that it knew Boeing couldn’t give specific delivery dates due to the ongoing IAM strike last year, then that is a fault of Branson and his staff, not Boeing’s.
Branson was not the only airline boss awaiting delivery of airplanes, no matter how he crowed in front of the media to make out his poorly acted stint as “the victim”.
Regarding his threat about buying from Boeing in the future, perhaps he can explain his rationale for wanting damages from Airbus because the A340-600 suffered from “fuselage flex” as well as having a higher fuel burn due to the heavier seats, forcing the airplane to burn more fuel in cruise as it kept its nose higher in flight to counter a nose-down attitude.
If he doesn’t want to buy from Boeing, he could go all Airbus, or maybe the Japanese, Chinese or Brazilians can build him some 777′s instead of the A340′s he deferred indefinitely?
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When Airbus announced delays in the A380 programme, Branson did not use the same language – in fact, he was quite diplomatic about it and did not throw a tantrum threatening to go one maunfacturer over another.
“The depth of the delay has serious implications,” is what Virgin said back in late 2006 when the A380 faced delivery delays. Hardly threatening, I’m sure you’d agree and the funny side emerges when the airline decided to defer its A380 order until 2013.
About the only “success” Branson has had is how to play the media to his tune. Virgin America is a franchise bleeding money, questions over Virgin Blue’s finances have forced CEO Brett Godfrey into claiming there was no fund raising activity on the horizon, while most embarrasing of all is that a 49% stake in Virgin Atlantic held by Singapore Airlines has been on the market so long, no one cares – not least because the credit crises across the globe has forced everyone to hoard, not spend cash.
So while Branson ranted about Boeing so disparagingly, it’s hypocritical that he didn’t do the same over the A380.
And as for his claim that Airbus “doesn’t go on strike”, well, that too is pretty [insert word(s) of choice here].
The Power8 project to restructure Airbus expanded an already rocky relationship rift with Germany and the Force Ouvrière union that threatened to block some A320 work from moving to Hamburg. Granted, the Airbus strike was not as lengthy, but it blows a hole in Bransons blinkered assessment that the EADS’ offshoot doesn’t have its share of industrial strife. That’s also part of the reason why Airbus’ plans to spinoff factories led to such revolt, quashed only when EADS conveniently didn’t find buyers for various plants on sale.
By far the biggest mistake Branson made?
Ostracising himself from one plane maker and leaving himself at the mercy of another.
Branson takes great pride in showing how much “class” his airlines have – by coming to Seattle to collect a new airplane, enjoying the ceremonial spread put on by Boeing for him and his staff and to then use that opportunity to launch his tirade of ill-thought statements, desperately thin on substance proves how little class he has himself.
Between now and 2013, his 747-400′s will likely need replacing – don’t expect Boeing to give him preferential slots for any 747-8′s or 777′s just because he has a bunch of 787′s on order.
This may be one bridge too many that Branson has burnt and it’s inevitable it’ll come back and haunt him.
That point was highlighted aptly by Arran Aerospace’s MD, Doug McVitie.
“Sir Richard’s ingratiatingly biased pro-Airbus comments and his selective memory regarding the numerous Airbus France and Germany strikes last year smacks of posturing — a dangerous game to play in a duopoly. Boeing’s relationship with British Airways, the world’s largest operator of 747′s, will always be stronger than anything going on between Virgin and the US manufacturer, whether or not Sir Richard realises this.
He’s worried about late 787′s? Well, Virgin could always hang on until 2015 for Airbus A350XWB’s, by which time BA’s 787s should be firmly established on all competitive BA-Virgin routes.
A dangerous game indeed,” says McVitie.
And how right McVitie is…
The Bearded Dick makes ingratiatingly biased pro Airbus comments, this site takes an ingratiatingly biased pro Boeing position.
The world, as it so often does, evens out in front of our very eyes.
Rob, get a sense of perspective.
Dicks actions equate to biting the hand that feeds you.
The guy is a complete tool.
I think Branson parading those poor women wearing next to no clothes on such a cold day was the biggest crime!
Richard B has a much better press then Boeing these days and he is the customer.
Customers and the Dod pay all salaries / mortages at Boeing.
He is right with wath he says, so don’t be nice to him *& hope he orders some aircraft in the future.
A low risk batch of A330s next year, combined with A350 XWB later on, are around the corner, as Boeing found out repeatedly during the last few yrs.
http://www.flickr.com/photos/terenceli/3210938522/sizes/o/
And that is reality.
It would seem that Branson might not have gotten enough oxygen during all those high altitude balloon trips he made with Steve Fossett.
I have no idea what his problem is and from a business standpoint he’s screwed himself publicly.
Maybe he should be looking more inward than outward for the source of his current business problems.
B~
In spite of his taking an inopportune opportunity, he may have said the right thing at the wrong time.
Strikes are no way to manage an operation and both management and labour must find another way to continue in business over the long term. Any company that makes the same mistakes time and time again is doomed….and labour should play its part as well.
Limp Dick Branson is a media loving drama queen.
Oh well…I don’t really have a problem with what he says as long as he keeps on purchasing planes.
Money talks…everything else is trivial.
That being said, I do agree he’s putting himself into a corner by stating he would only purchase a plane form one manufacturer….
Also, it’s not really Branson himself who makes a lot of decisions when it comes to fleet purchasing…there are a lot of people who do the “grunt” work when it comes to purchasing planes.
Finally, he does have a lot of praise for the B787…which is after all, replacing the older A340′s in the fleet.
Sense of persepctive?
Hmm, maybe that encapsulates the key problem with this industry, we simply don’t recognise the customer chain and think that the customers owe for offering them services. We need to recognise that just as airlines should offer their passengers outstanding customer service thos of us who supply airlines should offer them a similar level of excellence.
The Bearded Git may be just that but he has a valid point. Both Boeing and Airbus have overpromised and underdelivered and neither seems to be able to own up and honestly admit the mistakes and give a genuine answer to genuine customer enquiries. And that leads to stunts like Branson’s, although it should be noted many other CEOs have said similar things.
“Dicks actions equate to biting the hand that feeds you.”
How? He’s buying planes from Boeing. His hand is feeding Boeing, not v.v.
“Sir Richard’s ingratiatingly biased pro-Airbus comments “
As opposed to McVities ingratiatingly biased anti-Airbus comments?
“The guy is a complete tool.”
I’d be willing to bet that “tool” has already spent more money than you’ll ever see in your entire life. I’m sure he cares deeply about your opinion of him.
Steve: “Dicks actions equate to biting the hand that feeds you.”
How? He’s buying planes from Boeing. His hand is feeding Boeing, not v.v.”
Spot on. Boeing broke its promise damaging a high profile customer & now they get the bill.
Branson being humble and happy for being allowed to buy aircraft from the great honorable Boeing.
Hilarious.
There is no point to argue with your customer, whoever pays to buy is always the king.
If you do not listen to the customer, the company will soon become history, with no exceptions.
Even if the king is currently in bad shape, you’ll only be worse if he becomes history.
So Boeing and Union, please listen.
Keesje said:
“A low risk batch of A330s next year, combined with A350 XWB later on, are around the corner,”
It really doesn’t matter what airplanes Sir Dicky buys, if he cannot put buts in the seats.
Sir Dicky has a long and proud history of not letting little things like facts distort his perception.
Gary said:
“There is no point to argue with your customer, whoever pays to buy is always the king.”
While I agree there was no point in Boeing arguing with Sir Dicky (they wisely kept quite), it is not true that the customer is always right. Sometimes you have to sell something to in idiot.