Virgin is ready to take on high street banks

Marion Dakers
AIRLINE owners are known for being colourful characters. They have to be, given the lengths they go to make money from air travel amid surging costs, awkward regulations and fears about damaging the planet.

In the current climate, the same could be said about bank owners. But Sir Richard Branson is excited at the prospect. He warns rivals that Virgin Money’s current account, created on the back of the firm’s Northern Rock acquisition in January, will give a scare to “discredited” retail banks when it launches in the autumn.

Virgin Money is going down a storm. We’ve had about 400,000 people switch over in the last four or five months and I think when the current account comes out in about three months’ time the amount of business is really going to explode,” the Virgin founder tells City A.M. during his airline’s inaugural trip to Cancun.

Adding that “our products generally, they’re not the absolute best, but as a package they’re very good value”, Branson says Virgin Money will “be making moves that will impress people over the next six months”.

“The bigger banks are discredited, or a lot of them are, so I think people seem to want to change.”

But Branson was still saddened to see Barclays chief executive Bob Diamond step down after the bank’s Libor rigging, though “it’s good that people still do that at a company”.

He confesses to not closely following the scandal engulfing Barclays and his other soon-to-be competitors. Branson is also unfamiliar with fellow airline tycoon Sir Stelios Haji-Ioannou’s attempts to follow in Virgin’s ill-fated footsteps by setting up a new airline in Africa. He jokes, however, that he would be “very happy to have a discussion with him, tell him what to watch out for”.

Virgin Atlantic chief executive Steve Ridgway, on the other hand, has the details of his firm’s doomed attempts to crack the Nigerian market in the 2000s at his fingertips.

“We put together a very good airline – the first airline in west Africa that was ever IOSA [IATA Operational Safety Audit] accredited – but unfortunately it got tied down in the politics.”

Ridgway, who has led the airline for 11 years, is at his most talkative when railing against politicians, watchdogs and rivals. Like Virgin Money, the airline started life as an underdog to long-established players.

His latest ire is directed at nemesis British Airways’ takeover of smaller carrier BMI, resulting in the sale of 12 coveted landing slots at Heathrow at the behest of competition bodies.

“It would be a gift to BA, wouldn’t it, to find that the miserable number of slots gets divided up among a number of carriers,” Ridgway says, urging regulators to allow Virgin to buy the slots.

A long-standing critic of Britain’s meandering aviation policy, Ridgway hopes the current review marks “a seminal moment” for Britain. “To believe you can just put the whole of aviation back in the box is just crazy, at a time when the government’s desperate for growth, to create jobs.

“We’ve still got some great companies in this country and we need to make sure that it’s very easy to fly in and out of the UK, it’s very easy to set up headquarters, it’s very easy to keep your headquarters in the UK.”

With fights in so many corners, the 61-year-old rolls his eyes when asked about his rumoured plans to retire at 60. “I don’t know, I guess you always set yourself targets and they’re always blown off course by events, but I try to keep myself young and agile. I’m not too decrepit yet, am I?”