Virgin Galactic: Richard Branson's Space Tourism Company Virgin Galactic: Richard Branson's Space Tourism Company By Elizabeth Howell, Space.com Contributor | February 17, 2016 01:13pm ET MORE Virgin Galactic is a company that aims to offer suborbital flights into space to paying customers in the next few years. It is run by Richard Branson, a British aerospace and music entrepreneur. The start date for flights has been pushed back several times. Branson originally predicted that Virgin Galactic would be flying customers into space by 2007. Development headaches, a 2007 fatal explosion during a ground test and a tragic test-flight crash in October 2014 are some of the things that have delayed work. The Virgin Galactic Press Event Tent at the Farnborough International Airshow and Launcher One press conference in Hampshire, England. The image was taken July 11, 2012. Credit: Mark Chivers Virgin plans to operate its flights out of the Spaceport America complex in New Mexico, but it has also signed an agreement to develop a spaceport in Abu Dhabi. The company has more than 700 customers who have made deposits for spaceflights.

The biggest known name on the list is actor Ashton Kutcher , although rumor has it that actors Angelina Jolie, Tom Hanks, Brad Pitt and Katy Perry have signed on as well. A few people reportedly backed out after the October 2014 crash. Born from an X-Prize bid Richard Branson has a portfolio of companies under the "Virgin" brand, including a music company and an airline. Virgin Galactic was registered as a company in 1999, three years after the Ansari X Prize was announced. The X Prize was intended to award $10 million to the first non-government organization that flew people into space, using a reusable spacecraft, twice in a two-week span. Branson had been interested in spaceflight since the 1960s, and sponsored Burt Rutan's Scaled Composites' bid to get the prize. Scaled Composites safely made it to space twice in September and October 2004 using SpaceShipOne and won the X Prize . That same year, Virgin pledged to bring ordinary people into space with Scaled Composites technology, for the reported low price of $200,000 per seat.

"We hope to create thousands of astronauts over the next few years and bring alive their dream of seeing the majestic beauty of our planet from above, the stars in all their glory and the amazing sensation of weightlessness," Branson said in September 2004. "The development will also allow every country in the world to have their own astronauts rather than the privileged few." Building a base A replica of the Virgin Galactic Spaceship Two sits at the Farnborough International Airshow, Hampshire, England. The image was taken July 9, 2012. Credit: Mark Chivers In July 2005, Branson and Rutan announced a joint venture between Virgin Galactic and Scaled Composites to get spaceflights going. The SpaceShip Company would manufacture SpaceShipTwo , a new generation of spacecraft that built on SpaceShipOne's technology, as well as a launching aircraft called WhiteKnightTwo. SpaceShipTwo would carry six passengers and two pilots into space, Virgin promised , with enough space "to allow for an out-of-seat zero gravity experience as well as plenty of large windows for the amazing views back to Earth." With a spacecraft in hand, the next step was finding a launching area.

In December 2005, the state of New Mexico officially offered Virgin Galactic a taxpayer-funded $225 million facility, SpacePort America, where the company could put its world headquarters and send flights into space. Construction and development occupied Virgin's attention in the coming years. A fatal explosion at Scaled Composites occurred in July 2007 during a routine test, delaying development of the rocket engine as the company searched for the cause. The next major flight milestone came in July 2008, when the company showed off the first WhiteKnightTwo air launch vehicle — "Eve" — to customers and the media. Eve began test flights in December that year. 'Longer and ... more difficult' Developing the prototype spacecraft took quite a while longer. It wasn't until December 2009 that VSS Enterprise, the first SpaceShipTwo, was shown off to the world. "I want to say that this program has been, at this point, harder than we thought it would be. It's taken longer and is more difficult," Rutan said at the launch event in New Mexico. "This is an enormous milestone today in unveiling the first commercial manned spacecraft.

I look forward to moving into the test program." Virgin Galactic's first crewed test flight came in July 2010, when VSS Enterprise spent more than six hours in the air. Meanwhile, the company was busily working to find paying customers for the upcoming spaceflights. In addition to the suborbital joyrides, Virgin Galactic signed an agreement in 2011 with NASA to do research flights. The company also brokered a deal with the Southwest Research Institute to fly the institute's scientists and experiments into space . Waiting for suborbit Some customers pulled out following the lengthy delay in Virgin Galactic's first spaceflight, but most have said they understand that the company is trying to put safety first. "Remember, this is pioneering technology," said passenger Jackie Maw in a 2011 email to Space.com. "We are all focused on the safety of the flights, and I daresay most of the future astronauts are happy to wait [until] Scaled and Virgin Galactic are 100 percent satisfied with the flights." While testing continues on SpaceShipTwo, Virgin Galactic has been working to diversify the business.

In July 2012, Branson announced the company would offer commercial satellite launches beginning in 2016. He also announced the development of LauncherOne, an expendable liquid-fueled rocket. "It will unlock new technologies and will help fast-track the potential of space as a positive force for powerful change," Branson said during the unveiling. The first rocket-powered flight test of SpaceShipTwo took place in April 2013; another followed in September 2013, then another in January 2014. Each flight went well, with Enterprise zooming high in the sky faster than the speed of sound. But tragedy struck during the fourth powered flight, on Oct. 31, 2014, when the vehicle broke apart , killing copilot Michael Alsbury and injuring pilot Peter Siebold. An investigation by the National Transportation Safety Board determined that the accident was caused by SpaceShipTwo's "feathering" re-entry system deploying too early, as a result of an error by Alsbury. The next version of SpaceShipTwo, which Virgin Galactic will unveil and name during a ceremony on Feb.

19, 2016, includes safeguards that will prevent this scenario from happening again, company representatives have said. Activities after the crash While Virgin has not committed to a flight date now for its first astronauts — the company had projected 2015 before the crash — Virgin has expressed commitment to continuing its test program, despite the tragedy. In February 2015, a media report concerning CEO George Whitesides indicated that the company plans to resume testing later this year. Virgin is also building another spacecraft — it was two-thirds finished at the time of the report — and is still planning to use Spaceport America in New Mexico for its flights. "I really think we're turning the corner," Whitesides told the Associated Press . "We've gone through one of the toughest things a company can go through and we're still standing, and now we're really moving forward with pace." The article pointed out that New Mexico government taxpayers have spent nearly $250 million on the facility so far, but Whitesides added that the company is “still committed” to using the facility.

Separately, a blog post from Branson in early January 2015 said he briefly had doubts about continuing after the crash — but his commitment was renewed when he visited Mojave. "In short — was Virgin Galactic , and everything it has stood for and dreamt of achieving, really worth it?” Branson wrote. “I got a very firm answer to that question immediately when I landed in Mojave. From the designers, the builders, the engineers, the pilots and the whole community who passionately believed — and still believe — that truly opening space and making it accessible and safe is of vital importance to all our futures." Additional resources Virgin Entrepreneur | SUCCESS Magazine | Richard Branson Mary Vinnedge May 31, 2009 The 20-something Richard Branson racked up a résumé that would impress no one: high-school dropout with poor reading and math skills. Failed get-rich-quick schemes. Long-haired, barefooted hippie. Struggling business that led to two arrests and a night in jail on suspicion of tax evasion. But as he turns 59 in July, Branson’s life seems as golden as his locks.

Worth about $4.4 billion, he ranked as the 236th richest person in 2008, according to Forbes. Branson has put his Virgin brand on independent businesses in the airline, hospitality, space travel and financial industries, to name a few. He has made headlines as a humanitarian, environmentalist and adventurer. In 2000, he was knighted for his services to entrepreneurship. Perseverance, imagination and courage sustained his transformation. His family nurtured his independence and entrepreneurial spirit; however, many of his strengths were born out of struggles. Dyslexia, for instance, made reading and understanding some concepts painfully difficult. Even today, he says he doesn’t trust numbers. “I don’t complicate my life with financial reports,” he says, laughing. But he compensated for what he lacked by exceeding in other areas, developing extraordinary people skills and learning to trust his instincts. “I do a lot by gut feeling and a lot by personal experience,” Branson says. “I mean, if I relied on accountants to make decisions, I most certainly would have never gone into the airline business.

I most certainly would not have gone into the space business, and I certainly wouldn’t have gone into most of the businesses that I’m in. So, in hindsight, it seems to have worked pretty well to my advantage.” "The challenge is to follow through on a great idea." As entrepreneurs struggle in today’s economy to throw off the negativity and rekindle the bold spirit that fueled their passion in the first place, Branson has this advice: “Obstacles and challenges are healthy for everyone, not just entrepreneurs. They force you to think outside the box, so to speak—to be creative. “The challenge is to follow through on a great idea. I think if [you’ve] got a great idea, you need to just give it a try,” he tells SUCCESS. “And if you fall fl at on your face, pick yourself up and try again. Learn from your mistakes. And, remember, you’ve got to go make a real difference in people’s lives if you’re going to be successful.” Breaking the Rules Branson’s own challenges did not stop with his dyslexia. Though famous for his business risks and daredevil adventures, like record-setting attempts by balloon and boat, he’s also seen his share of calamities.

Branson took lessons from those experiences, but was never unnerved. In many cases, his failures led to innovation and greater success. In his early years, his Virgin records shop continually experienced cash-flow problems, even despite its brisk sales. To pay off an overdraft, 20-year-old Branson pretended to buy records for export to escape an excise tax on sales within Britain. He was arrested and jailed for a night, released only after his mother secured his bail by pledging her home as collateral. Branson’s plea bargain called for him to pay £60,000 or face rearrest, trial and a criminal record. He had previously been arrested after founding his Student magazine for violating laws dating from 1889 and 1917 that banned publishing advice about remedies for veneral disease. But he was able to avert imprisonment with help from a good lawyer and was fined just £7. He emerged emboldened and vindicated. But with charges of tax evasion, the law was clearly not on his side. “Avoiding prison was the most persuasive incentive I’ve ever had,” and the next two years were a crash course in money management.

After that incident, Branson realized there were some rules he would heed in the future. “I vowed to myself that I would never again do anything that would cause me to be imprisoned or, indeed, do any kind of business deal that would embarrass me,” he writes in Losing My Virginity. “My parents had always drummed into me that all you have in life is your reputation: You may be very rich, but if you lose your good name, then you’ll never be happy.” He paid the fine and, looking back, realizes that failure to do so would have ruined his life. “It is unlikely, not to say impossible, that someone with a criminal record would have been allowed to set up an airline.” Taking Flight Indeed, the airline business was fraught with plenty of other challenges. Branson was aware of some of the obstacles related to starting Virgin Atlantic Airways, which was the clear underdog in the British Airways-dominated transatlantic market. He thought the big airlines weren’t in touch with customers’ needs and believed he could be successful by offering a more affordable and enjoyable flying experience. To minimize financial risk, Virgin Atlantic started out in 1984 with a jumbo jet leased for a year.

But during the government certification flight, the unexpected happened: Birds flew into an uninsured engine, which exploded. Insurance on the plane was dependent on the certification, and certification was dependent on a fully functional plane. A new engine cost £600,000 (more than $1 million). Virgin’s bank balked at the tab, so Branson pulled cash from overseas record subsidiaries to ease the crunch. Then Branson brought in financial specialists to restructure the company and find new banking backers. Despite the setbacks, Virgin Atlantic was ready for takeoff a couple days after the engine failure, just in time for an inaugural flight filled with journalists. Virgin Atlantic’s competition with British Airways was perpetually difficult and financially draining. Branson even waged a lengthy court battle claiming British Airways had played dirty tricks to steal Virgin Atlantic’s passengers. Branson agreed to a settlement in 1993 calling for a £500,000 payment to him and £100,000 to Virgin. But amidst the competition, rising fuel prices and global economic woes in the early 1990s, the price to keep Virgin Atlantic flying was too great. To appease impatient bankers, Branson faced one of his most difficult decisions ever.

Against the advice of his wife, Joan, he sold Virgin Music Group in 1992 to Thorn EMI. Ironically, Virgin had just contracted to record the Rolling Stones, a lifelong dream Branson would never realize. Yet, the influx of cash from the sale—almost $1 billion—allowed him to pay off loans on Virgin Atlantic and own it outright. The sale of the beloved music company also gave him new incentive to avoid the crippling indebtedness that put him at lenders’ mercy. A New Approach Out of what had been a chaotic and heartbreaking experience came a new business strategy: “branded venture capitalism,” as Branson calls it, which gives him control over a large number of companies with minimal financial risk. Today, the Virgin Group is an eclectic empire of more than 200 diverse companies that run independently with different shareholders and boards, yet share the brand, as well as the resources and collective knowledge and experience of others at Virgin. Branson believes in empowering talent to flourish, providing freedom and minimizing bureaucracy to foster creativity. “Every business… operates according to its own rules. There are many ways to run a successful company. What works once may never work again,” Branson writes in Business Stripped Bare. “There are no rules.

You don’t learn to walk by following rules. You learn by doing.” In addition to Virgin Atlantic, Branson’s airlines include Virgin Blue and V Australia in Australia, and Virgin America. He expects to fly even higher with Virgin Galactic, which plans to offer space tourism beginning in 2011 or 2012 (f lights are $200,000 per ticket, and the group has already secured almost $40 million in bookings). Interested passengers include designer Philippe Starck, actress Sigourney Weaver, astrophysicist Stephen Hawking and, of course, Branson and his family. In a new venture to encourage entrepreneurship, Branson launched PitchTV in March as part of Virgin Atlantic’s 25th anniversary celebrations. The show will air the video pitches of wannabe entrepreneurs onboard and online. Virgin Atlantic’s business travelers, many of them executives, will see the pitches, and each year Branson will select a favorite with a yet-undisclosed prize for the winner. Branson remains mindful of his own entrepreneurial beginnings, as well as the fact that great ideas from up-and-comers help fuel the Virgin Group today.

He tells SUCCESS that one key to entrepreneurial success is to “get a great group of people around you who believe in your idea.” Just as he had his family’s support from his childhood to his earliest business ventures to his space flights today, Branson aims to provide encouragement and inspiration for other entrepreneurs. But, he says, the ultimate reward for an entrepreneur is individual and personal. “Entrepreneurship is business’s beating heart. Entrepreneurship isn’t about capital; it’s about ideas. Entrepreneurship is also about excellence. Not excellence measured in awards or other people’s approval, but the sort that one achieves for oneself by exploring what the world has to offer.” Originally published in 2009. The Virgin Galactic Accident Won't Be A Disaster For Virgin-Branded Airlines The Virgin Galactic Accident Won't Be A Disaster For Virgin-Branded Airlines 11/03/14 AT 4:48 PM Close The fatal test-flight crash of a Virgin Galactic passenger spaceship over the Mojave Desert in California on Friday has raised questions about whether the Virgin-branded airlines -- Virgin Atlantic, Virgin America and Virgin Australia -- will suffer from a lack of public confidence due to the crash.

But don’t expect the airlines to suffer a major hit from the commercial space travel’s disaster, analysts say. The perceptions of an airline are crucial to its business -- see Malaysia Airlines, for example, which has suffered huge financial losses in the wake of two separate aircraft disasters earlier this year. If an airline is perceived as unsafe, customers stay away. “The Virgin Galactic crash is certainly not a positive for the Virgin brand,” said Tim Calkins, a professor of marketing at the Kellogg School of Management. “The challenge for Virgin is that the brand is in so many categories, there’s always the risk that a negative event will spill into other areas.” A Virgin America Airbus A320 aptly named, 'My Other Ride is a Spaceship', is positioned beside the first commercial space flight system Virgin Galactic's WhiteKnightTwo and SpaceShipTwo at San Francisco International Airpor tAirport on April 6, 2011 in San Francisco. Photo: Bob Riha, Jr./Virgin America Airlines via Getty Images In the days since the crash, Virgin Group founder Richard Branson has been vocal about responding to the commercial space travel disaster.

He has been praised for responding quickly to the crash, traveling to the scene and setting a tone that indicates he’s serious about finding the cause of the crash. “The fact that he responded so well will help the Virgin brand weather this setback,” Calkins said. Virgin America, which is on its way to an initial public offering, plans to offer more than 13 million shares between $21 and $24 each, the company stated in its SEC filings . In the paperwork, it also noted that “negative publicity related to the Virgin brand name could materially adversely affect our business.” But most industry analysts agree that it’s unlikely Virgin America, along with counterparts Virgin Atlantic and Virgin Australia, will suffer. Data from online travel agency Orbitz shows that there is no significant difference in bookings of Virgin flights since Friday's crash. Related Stories How Malaysia Airlines Can Save Itself, Or Not “I don’t sense any market confusion between the scheduled airline and sub-orbital or space tourism brands,” said aviation industry analyst Robert Mann. Shashank Nigam, CEO of aviation marketing firm SimpliFlying, agrees.

“While the Virgin Galactic incident is a setback to the space exploration program, we don’t believe it will have a direct impact on the airline side of the business,” Nigam said. “Each of the Virgin airlines have strong brands in their own home markets that should be resilient enough to absorb the impact of this incident.” That’s because most consumer put space travel in a very different mental category from routine airline trips, Calkins said. “I don’t think there is a huge risk that people will have doubts about the safety of Virgin America or Virgin Atlantic because they had a crash in the Virgin space program,” he said. But, added Calkins, things could change. “If it turns out the crash was due to some egregious maintenance problem, it could become an issue,” Calkins said. “For now, people are able to disconnect these two things. That’s why I think Virgin will end up being fine.” Virgin group: Brand it like Branson Virgin group: Brand it like Branson After the Virgin Galactic spacecraft crash, attention turns to its potential impact on the group by: Sarah Gordon Sir Richard Branson is a mass of contradictions. A man who often appears shy, yet has built a brand around his charisma.

Someone who vaunts his social conscience, but who lives as a tax exile on Necker island. A fervent environmentalist, who wants to send wealthy travellers into space. One of the biggest inconsistencies is that his public persona – that of an entrepreneur running a multifarious business empire – does not reflect reality. In fact, Sir Richard manages very little. His Virgin Group owns stakes – few of them majority ones – in a vast range of businesses, but as an investor rather than a manager. Indeed it most resembles a huge “family office” with a portfolio run by professional investment managers and the profits channelled – via a number of trusts and a network of holding companies – to the Branson family. The crash of the Virgin Galactic spacecraft on Friday and the death of one of its pilots strike at the heart of the contradictions of the Virgin empire, contradictions which show that it is less robust than it might appear. “Richard is interested in what is happening in the investment portfolio, but doesn’t run any of the businesses in it,” says Josh Bayliss, chief executive of Virgin Group Holdings, which manages Sir Richard’s investment portfolio and the Virgin brand.

“His attention on a day-to-day basis is not on the operational aspects of the businesses.” Of the about 80 businesses which bear the Virgin name, spanning sectors from travel, transport, leisure, entertainment, telecoms and media, less than half have direct stakes held by Virgin Group. Virgin companies made £15bn in revenues in the past financial year, but these bear little relation to the value or performance of the holding company. VGH owns 27 per cent of the 12 largest Virgin companies by revenues. And those group companies are not even the most significant holdings in its investment portfolio. Virgin Money, which is only the 12th largest Virgin company by revenue, accounts for 15 per cent of the portfolio, with Virgin America at 10 per cent, followed by Virgin Active, Virgin Atlantic and Virgin Mobile France. VGH makes a significant amount of its money not from cash flows from its investments – particularly since a number of large Virgin businesses do not turn a profit – but from the fees it charges companies for lending them the Virgin name. The Branson family’s wealth, therefore, is dependent on the value of the Virgin brand which is intimately linked to Sir Richard himself.

“Every day that Richard gets older the issue of the Virgin brand becomes a bigger one because so much of it is tied to him,” says Jez Frampton, chief executive of Interbrand, the brand consultancy. Since 2005, Sir Richard, 64, has stepped back from day-to-day running of Virgin Group Holdings, to focus on his charitable activities and space tourism. With Virgin Galactic, he hoped not just to send people into space, but also harness his personal brand and that of the Virgin name to boost franchising opportunities, especially in the US. For Galactic’s business model, Virgin followed a well-worn route. The group’s favoured start-up model relies on private investment for financing, with generally a co-investor sharing equity, and therefore the financial risk, often with a large amount of debt to the parent company loaded on to the balance sheet, a model it has followed at most of its businesses since the group’s brief but painful experience as a London-listed company in the 1980s. So far, Virgin says, Galactic has sucked in up to $600m of investment, $380m of which was provided by Aabar, Abu Dhabi’s state investment agency.

The Aabar money has now been spent , but Virgin says its partner is not expecting a swift return on its money nor pressing for an exit. The structure of the Virgin Group allows cross-subsidisation of its different businesses. Now that Virgin Galactic has burnt through the Aabar investment it is being financed from cash held by VGH itself. Virgin will not confirm that this has diluted Aabar’s equity, suggesting that the bulk of the additional financing is in the form of debt. Mr Bayliss says Virgin is not seeking an additional equity injection from Aabar, nor a new equity partner for the venture. Space dream Sir Richard has vowed to continue testing spaceships and seems to have no plans to abandon Galactic. The commercial launch was scheduled for next year, which seems ever more unlikely, but on Wednesday the company told the Financial Times that only 3 per cent of the about 700 people who had signed up for a ticket by paying a $20,000 deposit or the $250,000 full fare had asked for a refund.

If Sir Richard did decide to abandon Galactic, repaying Aabar’s $380m investment, the $89m in advance ticket sales and the hit to its own balance sheet of $220m-plus, would not be overwhelmingly onerous for the group, given VGH’s portfolio is valued at more than £5bn. Continuing with it, though, is a rather different matter. Because VGH is run like a private equity company the question is how secure are the cash flows to bankroll Galactic and other Virgin businesses, which are at varying stages of development and profitability. How long can VGH sustain the cash drain? Sir Richard told the FT last month that the group was “in the strongest position it’s ever been in”, “cash-rich” with no net borrowings. It is also pressing ahead with the initial public offering of Virgin Money, which owns the “good bank” assets from failed UK mortgage lender Northern Rock, and of Virgin America, the US airline in which it has a 22 per cent stake, lodging its prospectus with the Securities and Exchange Commission on Monday. Virgin America only returned to profit in 2013.

Its listing – which the owners hope will value the airline at up to $1bn – will allow the repayment or conversion into equity of at least $650m of related-party debt plus the accrued interest on it – owed to Virgin Group and its co-investor, Cyrus Capital, a distressed debt fund manager. Virgin says the bulk of the cash proceeds will remain in the business to finance future growth, but it will nevertheless provide VGH with some useful cash in hand. In the private equity world, such financial arrangements are not unusual before an investment is exited. But as no interest has been paid on the debt on Virgin America’s balance sheet since its start-up in 2007, it is difficult to assess the profitability of the business. VGH does not disclose the amount of cash in its portfolio, although it says there are “several hundreds of millions of dollars” available. The group’s value relies on the capital appreciation of its investments. But its income is made up of a share of dividends and cash flows from those investments, including service on the debt it lends down the network of holdings, the proceeds of refinancings, sales or listings and the revenue stream from licensing the Virgin name.

There is nothing illegal about Virgin Group Holdings using cash or its stakes in other Virgin companies to support other branded businesses. But it makes it difficult to assess their genuine sustainability, and may skew management decisions – to the detriment of minority shareholders – if cash is needed in another part of the portfolio. Damaged goods An even bigger question hanging over VGH and the other companies bearing the Virgin name is what damage last week’s fatal crash will do to the value of the businesses. Interactive timeline Virgin: 44 years of brand-building Richard Branson’s golden touch has helped him grow a mail-order record service into a global conglomerate of 80 Virgin-branded companies. He has juggled spaceships, mortgages and video games, and now ranks seventh on the Forbes UK billionaires list. Forty-four years after Mr Branson opened the first business, Virgin Group’s net worth is now estimated at £5-5.5bn. Virgin America has been explicit on the subject: “The ‘Virgin’ brand is not under our control, and negative publicity related to the Virgin brand name could materially adversely affect our business,” it warns in its IPO prospectus. Sir Richard had hoped Galactic would have a “halo effect” on the rest of the company.

The risk is that it will have the opposite impact and threaten the value of the brand upon which the whole edifice depends. Mr Bayliss says that royalties – income from allowing companies to use the Virgin brand name – have increased substantially in recent years and their weight in the overall VGH investment portfolio has risen accordingly. Revenues from the brand, which are mainly licensed by Virgin Enterprises, now amount to about £120m a year. The brand is valued on a discounted cash flow basis at roughly £1bn, and it thus accounts for a significant proportion of VGH’s overall value of £5-5.5bn. Virgin has focused most of its expansion plans in North America in recent years and had hoped to use the Galactic operation as a way to grow the appeal of the brand in a country where Sir Richard has struggled to raise his profile. “[Sir Richard] is quite well known in New York because of Virgin Atlantic but once you get beyond there, he’s not,” says Mr Frampton of Interbrand. Mr Bayliss argues that the Virgin brand stands on its own two feet.

“If you rebranded Virgin Atlantic as, say, Cloud Airways, they would pay less in royalty fees, but strategically and operationally the business would continue to do the same things, although without the benefits of the ‘Virgin’ name,” he says. “In the UK it’s more true than anywhere else that Richard contributes to the [Virgin] brand perception. But it’s a very very mature diverse brand which stands for different things in different markets.” It is a moot point whether the Galactic crash will combine with previous failed attempts to boost the Virgin brand in North America and reduce the potential growth of VGH’s royalties income. Although it has had to lower the price it hoped to raise from Virgin Money, VGH says the crash has had no impact on the valuation range suggested for its Virgin America IPO. And is aware of the need to sustain the brand’s value. “Over the past seven or eight years, since Richard has been less hands-on, it has been a very significant focus for us to build equity in the brand beyond Richard,” says Mr Bayliss. The Virgin founder has always been a dreamer who likes taking big risks. But with Galactic, the danger is that those risks undermine the structure that underpins the dreams – and finances the risks.

Additional reporting by Cynthia O’Murchu Sample the FT’s top stories for a week You select the topic, we deliver the news. Select topic Bartiromo talks IPOs, space travel with Branson FacebookEmail Twitter Google+ LinkedIn Pinterest Bartiromo talks IPOs, space travel with Branson Virgin Group led by a billionaire Richard Branson is readying to raise new capital by taking some of its best branded businesses public, including the airline Virgin America. Branson is also weeks away from Post to Facebook Bartiromo talks IPOs, space travel with Branson Virgin Group led by a billionaire Richard Branson is readying to raise new capital by taking some of its best branded businesses public, including the airline Virgin America. Branson is also weeks away from Check out this story on USATODAY.com: CancelSend A link has been sent to your friend's email address. Posted! A link has been posted to your Facebook feed. 7 To find out more about Facebook commenting please read the Conversation Guidelines and FAQs Bartiromo talks IPOs, space travel with Branson USAToday Published 7:15 a.m. ET Aug. 17, 2014 | Updated 10:38 a.m. ET Aug.

18, 2014 Richard Branson at the Virgin Galactic hangar at Mojave Air and Space Port in Mojave, Calif. (Photo: Reed Saxon, AP) Corrections and clarifications: This article originally misidentified two of Virgin Group's businesses. They are Virgin Australia and Virgin Trains. Virgin Group, led by billionaire Sir Richard Branson, is readying to raise new capital by taking some of its best branded businesses public, including the airline Virgin America. Branson is also weeks away from implementing his first commercial flight into space via Virgin Galactic. And before that, the serial entrepreneur will release a new book about leadership and his 50-year career, called The Virgin Way. The group's travel-related operations, led by 51%-owned Virgin Atlantic Airways, are among its largest cash generators. Virgin Atlantic's Australian low-fare cousin is called Virgin Australia. The group also runs Virgin Trains and has major operating areas including financial services and telecom. I caught up with Branson to get more on some of his top secrets to success and to get his take on the economy today. Our interview follows, edited for space and clarity. Q: How would you characterize the economy today? And where is the growth in business?

A: Businesses across the board are enjoying a great time again. The Virgin business units are no exception to that. I've gotta be a bit careful what I say on that because we've got a (stock sale) coming up, but the aviation industry generally is going through a good time. The health industry's been great. And the banking industry has been doing well. So it feels like we're back in a boom era again. I've been through many booms and seen all the busts that follow, but, hopefully governments and industry will get it right this time and we'll have a more sustained growth period than we've had in the past. I'm an optimist. Q: Are you surprised that we haven't seen much reaction from investors to what is happening in Russia, Iraq and Gaza? A: One of the reasons is America isn't going to be so reliant on foreign energy for much longer. And partly because there's the discovery of gas. Also our clean energy, solar, is now beginning to compete with coal on price. If America wanted to power itself largely on clean energy and goes all out to do it, it can be done if you would get 100 giant solar power cells. It can be done.

Because the reliance on foreign oil is beginning to go away, which means that when you have an international crisis like this, it doesn't affect things quite so much. Having said that, it is incredibly sad to see what looks like a Cold War mentality developing again between Russia and the rest of the world. Q: Have you seen an impact on the European economy as a result of the happenings in Ukraine and Russia? A: Not an enormous impact yet. If you're in specific products, like apples or vegetables or other things that you were importing into Russia and suddenly you can't import anything more into Russia, that must be pretty devastating for your business. But nothing too major that I can see. Q: When you first started out, did you have to raise money? How did you fund your initial business? A: The word "entrepreneur" had not been invented. The idea of venture capitalists that you could go to with an idea didn't exist, either. So I had to self-fund my first venture. I was 16. I was trying to launch a student magazine to campaign against the Vietnam War.

I asked my dad if I could leave school and he said I could only leave when I'd sold enough advertising to cover the printing, paper and distribution costs of the magazine. So I worked out of the school and somehow managed to get about $4,000 worth of advertising sold to cover the costs of 50,000 copies of the magazine. Then I rang up my dad and said, "I'm quitting school." And he was good enough to stick with his word and let me. I still own 100% of Virgin. It may well have been fortunate that I had to self-fund it because otherwise I would have given away quite a big chunk of the company and not owned it all. Q: You mentioned Virgin Galactic — what is your timing in terms of this program taking off? A: I'll be bitterly disappointed if I'm not into space by the end of the year. The rockets have now tested successfully. We've got three more rocket tests and then we should be up, up and away by the end of the year. That should be the start of the program. The space port's ready. We are now in the last few weeks before finally embarking on the space program.

Q: Take us around the world. Are you seeing economic vitality? A: The U.K. will see 4.0%, 4.5% growth this year. The U.S. something similar. Of course, there are countries in Europe that are doing nowhere near as well as that. That's still worrying. And there are countries in Europe where the unemployment is still very high. But in Africa, South America, the U.K., the U.S. and most of the countries in the Far East, things are going well. Q: Is China still that growth engine of the world? A: It is, but it's up to us to create our own growth. There are wonderful companies like Uber, and AirBnb and Google, Facebook, all growing strong. There's incredibly exciting things happening. Apple keeps going on, Virgin and so on. These are great companies, which are creating great growth in their own areas. Q: What do you think those companies have in common? How have they been able to innovate and grow more than others? A: They've been led by strong people, come up with brilliant ideas, been generally great designers, great innovators. They haven't always been led in the same way.

I speak in my book about Steve Jobs' way of managing people and he was incredibly hands on and was not a great delegator. But somehow it worked for Apple. Whereas at Virgin I've taken a very different approach and have been much more trusting with people, thinking you're the people who run your company and giving them the chance to make mistakes as well as to make good things. Q: You also mention luck and having fun. A: I do think having fun is important. Most of our time is spent at work and if it's not fun, life is not fun. We once took over a big chunk of Britain's rail network and there were $15,000-a-year people who worked for the government. The first thing I did was have a week-long party at my house in the country. Invited their children, their families. We had tents. We had barbeques. We had rock music. We had dancing. We had partying. And they became the most loyal employees ever. They still talk about the parties. We had another big celebratory party again this year. So I do think having fun is very important. It's not to be underestimated. Too many companies take themselves too deadly seriously.

If people who work for a company are proud and happy and enjoying the company they work for they'll smile. And if they smile, then customers will smile. And when customers smile, you have sales. It's self perpetuating. Q: You have also differentiated yourself by making sure the world knows the company has purpose, stands for something, and has integrity. Young people today want to work somewhere because they have purpose. A: Business people need to speak out on issues where there are injustices in the world. Uganda recently said they would execute people for being gay. They'd execute people for not reporting gay people or, at the very least, give them life imprisonment. I've made it very clear that Virgin would not do business with Uganda if they took that stance. Well, you know, there has been a backtrack in Uganda. I feel that governments and social workers deal with all the social issues in the world. We've set up The Elders (an independent group of global leaders who work together for peace and human rights) to try to address conflicts in the world. The point of mentioning that is simply that as a business leader, you could go through maybe 10, 15 different governments in their lifetime.

They've got much more stability. Their knowledge, encompasses decades. And it can be helpful to newer politicians not to mention entrepreneurial skills which social workers and politicians may not have. Maria Bartiromo is the anchor and global markets editor at The Fox Business Network. Follow her on twitter @mariabartiromo and @sundayfutures. 173 CONNECT TWEET LINKEDIN 7 COMMENTEMAILMORE Read or Share this story: NEVER MISS OUT Managing Your Money Master your money with the latest business and investment news, articles and tips from financial experts each Friday.

Question: The Virgin space tourism business is branded?
Answer: Galactic