Dear Colleague,

Although I am no longer overseeing Virgin Atlantic on a day to day basis, as its founder I keep a watchful, and proud, eye over its progress. From one second-hand 747 twenty three years ago, it has turned into an airline that everyone working there can be truly proud of. Everyone who comes into contact with Virgin Atlantic leaves with a smile.

Having set up Virgin Atlantic I know only too well how challenging managing an airline can be. History is littered with carriers that have gone bust - Laker Airways, Dan Air, Air Europe, British Caledonian, and just last week, Maxjet, which had been in business less than 18 months. In our relatively short history, we’ve seen the demise of every airline we competed against back in 1984 (except BA). TWA, Pan Am, People’s Express, Air Florida to name but a few. Even the mighty Continental Airlines, Delta, Northwest and United all went bust only to be bailed out by the US Government with massive loans. One of the principal reasons for these airlines’ demise was internal strife.

Remarkably, Virgin Atlantic has survived against all these giants thanks largely to the attitude and hard work of its staff - by everyone working well together, by ensuring that we are the best airline flying and by having a management team who (by and large) have managed and are managing it well and who are willing to take tough - but necessary - decisions on occasion.

The only other airline to have survived across the Atlantic is British Airways. Unlike Virgin it didn’t grow from one plane with no support. It used to be the national airline and was privatised some 20 years ago with a very large silver spoon in its mouth. It was given the bulk of slots at Heathrow and Gatwick, much of the infrastructure and even Concorde, which had cost the taxpayer hundreds of millions of pounds to build, it was given for one pound.

BA also has the luxury of a short-haul network to feed its long-haul. As a result it has made - and can make - significantly larger profits than us.

Virgin Atlantic has never had any handouts and therefore to survive we have to keep our costs under control.

I’m afraid that those in the union who compare Virgin Atlantic with British Airways are being very unrealistic. It’s like comparing chalk with cheese.

Most people who joined Virgin realised that. They knew that their basic salary was usually not the same as BA’s. But they joined for the benefits that came with working for a smaller, more friendly company. (I know - and I am sure you know - quite a few crew who left Virgin for BA for better pay only to return to Virgin for those other benefits).

I have discussed at length with the senior team whether there is anything more that they can safely do to help and I believe them when they say that the final offer on the table is the best they can or should do in terms of addressing cabin crew salary packages.

There comes a time in any negotiation when a good management team has to draw a line in the sand and I agree with them that time has come. To go further would result in unacceptable risks and would set a dangerous precedent to the company as a whole. It would be irresponsible of our management and they, rightly, are not going to take that risk.

For some of you more pay than Virgin Atlantic can afford may be critical to your lifestyle and if that is the case you should consider working elsewhere. For the vast majority of you, the pay rise you were offered was the best in the industry this year, which is why the union strongly recommended it. I’d urge you not to put at risk our ability to solve this dispute by messing up our customers’ travel plans.

We all want to resolve this situation and give the best pay increase that the business can afford. The best way to achieve this is by keeping all of our planes flying and delivering what we do best - making sure that all of our passengers leave with a smile.

Thankyou and have an excellent New Year.

Richard Branson

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