Word: virgination
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...like an adventurer's litany of near misses and narrow escapes from hot-air balloon crashes, storms at sea and unruly lovers. But Branson the accountant is unmistakable. He is methodical about risk and rigorously applies that principle to the diciest of industries, airlines. That's why, for example, Virgin America does not plan to have more than 100 planes--limiting itself in the first five years to the 30 largest U.S. cities, those that attract both business and leisure travelers, particularly the young creative types who identify with the Virgin brand. Don't expect Virgin on the Pittsburgh-Indianapolis...
...market (too much competition, too many restrictive ownership rules). And it allows him to do things that, on the surface, appear extraordinarily risky. His pledge to devote all the profits from his transportation businesses to fighting global warming, for example, is actually just a decision to channel some of Virgin Group's money, up to $3 billion over a decade, into a wide range of environmental companies, some of them as prosaic as a start-up that aims to reduce fuel costs through safer driving...
...starts small and usually shares the risk. When he wins, he wins big. Branson's initial $10 million investment in Virgin Blue, for example, earned him a payoff of an estimated $500 million when the company went public, although the stock has since declined. When he fails, he always has an exit strategy. "If it doesn't work, we'll bow out gracefully," he says of Virgin America, where his total investment is $72 million. He put $25 million into Virgin Nigeria, but problems with the Nigerian government contributed to $82 million in losses last year, considerably reducing the profits...
...matter how innovative Virgin's Airlines are, no matter how loudly Branson trumpets biofuel, every plane in the sky runs on the same stuff. The price of jet fuel has risen 69% in the past year, and Virgin's executives, like their rivals, lie under its sword. "Other than the recession and $110-a-barrel oil, I see nothing but opportunity," CEO Cush deadpans. He can't cost-cut his way out; the limits of that strategy are obvious. The big carriers have taken $15 billion in costs out since 2001 but are paying $17 billion more for fuel...
...great missed business opportunities in recent memory: there are more flights connecting the U.S. to the rest of the world than ever, but U.S. airlines are flying fewer of them. "America led the world in aviation, and they should still be No. 1," says Steve Ridgway, CEO of Virgin Atlantic. "America built the planes that made this possible...