Branson Sees Brexit Britain in Doldrums as He Talks Up Texas
It’s not easy to wipe the trademark grin off Richard Branson’s face, but one way is to ask the British billionaire about the challenges facing his home country.
Speaking in Texas about Virgin Atlantic Airways Ltd.’s bid to tap Austin’s tech boom with its first flights to the state, Branson’s ebullience fades when the conversation switches to the economic squeeze and travel chaos in the UK.
“I don’t want to get drawn into the British economy and politics or else I’ll end up on Brexit and heaven knows what,” the entrepreneur says in an interview at Austin–Bergstrom International Airport.
Branson, 71, was one of the most prominent business voices of the campaign to keep Britain inside the European Union, telling now-Prime Minister Boris Johnson the plan would be a “disaster.” With UK flights in turmoil amid a labor crunch that’s been linked to Brexit, the Virgin Group founder says his fears are being borne out.
“I made my thoughts clear on Brexit,” he says. “I don’t change one word. And sadly quite a few of the things that I’ve said in the past may be coming about.”
Wrangling with the EU over the terms of the UK’s departure continues, with the status of Northern Ireland a lingering flash-point. The Organisation for Economic Co-operation and Development forecasts the UK will be the worst-performing economy in the developed world apart from heavily sanctioned Russia in 2023, with zero growth in gross domestic product.
The war in Ukraine has had a knock-on effect on the economy, sending fuel bills to record highs and inflation to a forecast 10%. But Britain is also in the grip of a labor crisis that’s been blamed partly on the loss of EU workers after Brexit, as well as the upheaval of the Covid-19 pandemic.
Airlines and airports have seen a particularly severe crunch, suffering flight cancellations and hours-long delays as they struggle to fill vital roles in security and baggage handling.
Virgin Atlantic has so far avoided the worst of the disruption thanks to a system of rapidly rehiring staff let go during the pandemic, though Chief Executive Officer Shai Weiss this week warned that pessimists risk talking down the travel recovery before it’s really begun.
Branson says Virgin Atlantic can ride out any slump, and that a further weakening of sterling could be withstood by the airline thanks to its strong US profile.
“If the pound goes down further we’ll get more people coming into the UK from America,” he said. “And if it stays where it is or goes up a bit we’ll get more people going from the UK into the States. It’s a reasonable balance.”
The new Austin route is a case in point, with 75% of traffic expected to come from Americans visiting Britain. Branson is enthusiastic about the fast-growing US city, praising its liberal culture and commitment to innovation.
The entrepreneur says he’s happy to remain Virgin Atlantic’s majority owner, with Delta Air Lines Inc. a shareholder, having opted not to sell part of his stake to Air France-KLM prior to the pandemic. That compelled him to bail out the carrier when Covid hit, after Johnson’s government rejected appeals for state aid.
“I’m very pleased to own 51% of the company, despite having to put my hand very, very deep in my pocket to make sure that it came out the other side,” he said.
Fuel prices will remain “painful for every person and every company,” especially airlines, Branson said. How they track will depend on whether the Ukraine conflict “drags out for years or is short-lived,” and “how fast other countries can ratchet up energy output,” he said.
Governments must take every action to wean themselves off Russian oil, however difficult that might be, according to Branson. The invasion of Ukraine could even have the positive consequence of accelerating a “clean-energy revolution.” Any recourse to coal and oil will likely be a temporary “sticking plaster” with billions set to be invested in solar, wind and sustainable aviation fuel.
“Most of the problems in the world can be resolved by entrepreneurs and optimistic people who get out there to solve them,” he says.