OZ777: I'll rise up to your challenge:
Clear skies in 6 months: Branson
Tycoon expects the airline industry to turn around by April next year; rules out further job cuts by Virgin Atlantic
By Nicholas Fang
BRITISH tycoon Richard Branson arrived in Singapore last night brimming with confidence for the crisis-hit global airline industry - predicting a turnaround in as little as six months.
Outrageous celebrations will be put on hold when Sir Richard launches Virgin Mobile on Friday. -- STEPHANIE YEOW
The high-profile entrepreneur said that based on the experiences of the Gulf War in 1991, airlines would suffer a marked downturn owing to the outbreak of war in Afghanistan but could see a recovery by April next year.
And Sir Richard is putting his money where his mouth is by stating firmly that there would be no more staff cuts at Virgin Atlantic, which is 49 per cent owned by Singapore Airlines (SIA).
Indeed, he hopes to rehire those already laid off by next year.
Airlines around the world, already hit by the global economic slowdown, were battered further by the Sept 11 terrorist attacks on the United States and this week's military retaliation.
Speaking exclusively to The Straits Times at Changi Airport last night, Sir Richard said of his Virgin Atlantic carrier: 'Obviously, load factors have been affected, particularly across the Atlantic.
'But we had a similar situation in the Gulf War, and we are hopeful that there will be something like a six-month downturn and then things will be back to normal.
'We have already cut back on three routes and tightened our belts. Several airlines have also cut back on capacity so while there are fewer passengers, there are also fewer seats to fill.'
Virgin Atlantic was one of the first carriers to announce layoffs and cost-cutting measures. They included a 20 per cent reduction in capacity and the cutting of 1,200 jobs, or some 13 per cent of its workforce.
When asked if any more cost-cutting measures were on the way, he said: 'I think we have done everything that needs to be done.
'There will be no more layoffs. In the Gulf War, we did something similar, and in six months, we had taken back everyone we had laid off. We hope the same thing will happen this time.'
Sir Richard flew in from Dubai in the Middle East where he had officiated at the opening of a chain of Virgin Megastore shopping centres in the region.
In Singapore, where he will stay for three days, he will launch Virgin Mobile, the country's fourth mobile operator, and a new line of soft drinks called Virgin Colours.
He will also call on SIA chief executive officer Cheong Choong Kong to discuss Virgin Atlantic's operations.
Sir Richard quashed speculation that Virgin Atlantic and SIA were considering a joint bid for embattled Australian carrier Ansett, dismissing the talk as 'rumours'.
I can imagine what all of you will say about the next article....
SIA's investment in Virgin could 'double in two years'
SINGAPORE Airlines' (SIA's) returns on its £600 million (S$1.59 billion) investment in Virgin Atlantic could double in two to three years' time, Virgin Atlantic boss Richard Branson told The Straits Times in a phone interview yesterday.
SIA had taken a 49 per cent stake in the British-based carrier at the end of 1999 at a price that many analysts had said was high at the time.
Asked when SIA would see returns on its investment in the London-based carrier, Sir Richard said: 'Your investment only pays off when you sell your shares.
'But if anyone sells their shares today in the airline business, these shares would be worth a lot less than they would have been a year or two ago.
'However, in two or three years' time, I very much hope that Virgin Atlantic's market capitalisation is double of what Singapore paid for it.'
He was quick to point out that Virgin Atlantic has been profitable 'almost every single year' of its operations, ever since it began flying in 1984.
'However, it will be miracle for any airline to be profitable this year given the events of the past six weeks,' he said, alluding to the terrorist attacks in the United States and the superpower's retaliation.
Exceptions to that, he said, would be airlines in Australia, which have seen demand for flights increase after embattled carrier Ansett ceased operations last month.
Sir Richard said he also recognised the challenges that face airlines following the Sept 11 attacks in the US and the subsequent retaliation.
'We will have to work hard to overcome this particular upheaval in the airline business and get it back on track again.
'We want to make sure that SIA gets the return on their money that they deserve for their commitment in us.'
He had said in an earlier interview that he expected the airline industry to be hit hard in the first six months following the attacks in the US.
But he added that he believed they could stage a recovery soon after that.--Nicholas Fang
SIA, Virgin Blue can 'renew rivalry'
The airlines can once again compete in Australia if SIA takes on a managerial role in the new Ansett, says Sir Richard
By Nicholas Fang
SINGAPORE Airlines (SIA) and Virgin Blue could renew 'gentlemanly competition' in Australia should SIA decide to take on a managerial role in a revamped version of Ansett, said Virgin Blue owner Richard Branson.
Sir Richard, in Singapore to launch a mobile communications venture, told The Straits Times yesterday that there had been friendly airline rivalry between SIA - which has an indirect stake in former Australian No 2 carrier Ansett - and his low-cost Virgin Blue airline.
'It is a distinctly unique situation in Australia because we are in competition with SIA there, but friends everywhere else,' he said in a telephone interview.
His wholly owned Virgin Blue carrier and SIA have been on a collision course ever since the former said in July that it was considering moving across the Tasman - something which did not sit well with SIA chief executive Cheong Choong Kong.
After all, such a move would have put Virgin Blue in direct competition with SIA associate Air New Zealand (Air NZ).
To make matters worse, Virgin Blue said later it would sell shares in Australia to help fund a fleet expansion and intensify its challenge to Qantas and Air NZ's Ansett.
SIA owns 49 per cent of Sir Richard's London-based Virgin Atlantic carrier.
Virgin Blue is not affiliated to Virgin Atlantic.
'There was the potential for conflict with SIA when Ansett was still operating as SIA had a 25 per cent share in Ansett's former parent Air New Zealand,' said the flamboyant entrepreneur.
'However, this competition went away following the demise of Ansett.'
Embattled Ansett was put under voluntary administration last month after Air NZ, itself facing financial difficulties, cut the Australian airline adrift.
That put 16,000 jobs on the line.
Since then, Ansett administrators Andersen have been busy hammering out a rescue plan for the ailing carrier.
It approached SIA recently about the possibility of providing managerial assistance to a revamped Ansett, dubbed Ansett Mark II, and possibly taking an equity stake in the carrier at a later date.
Although the talks are still ongoing and no agreement has been signed, Sir Richard said that if SIA does decide to play a role in the new Ansett, then SIA will become 'friendly competitors again' with Virgin Blue.
He added that he will be meeting SIA executives later this week to discuss Virgin Atlantic's operations as part of a schedule of monthly meetings between the two companies.
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