Richard Branson is the man (not quite all that is man, but he may make the cut someday). Earlier this week he wrote a letter to all the Virgin Atlantic pilots that are threatening to go on strike. The reason for the strike? The union isn’t happy with a 4% pay raise after a 3 year pay freeze. Richard isn’t the CEO or even involved in running the business anymore, but he is stepping in to try to save his baby.

First, he took an objective look at the company to see if the offer is fair:

In the last week I have spent a lot of time trying to understand whether the management team at the airline has treated everyone fairly and whether the company can afford to go further with its pay offer.

Then he offers to share the information with them that led him to believe it is a fair offer and the best that can be extended:

The management have told me they are happy to share up to date corporate accounts with your union so they can understand the financial context from where the offer has been made. As shareholders we’ve also got to ensure the airline is strong enough to withstand the many challenges it faces in this constantly changing market.

He finally urges them to explore the true cost of the union getting their way:

Unless BALPA withdraw its threat very soon it will leave an indelible scar on the company, impact customers’ trust in us and damage the unique and friendly culture at Virgin Atlantic. It will affect jobs and it will make it very difficult for the company to afford the current offer on the table.

Brilliant. Can’t wait to see how this all plays out.

Following the debate on Hacker News, I came across an excellent article exploring the relationship between pilot unions and the major airlines. If you are a strong believer in unions, read the article to see how nuts they are. My favorite quote:

Who controls the pilot’s union: very senior pilots. The airline management is mostly interested in what percentage of its revenues are paid out to pilots; the distribution of the money among the pilots does not affect profitability. The very senior pilots on the other side of the table say “We need the most senior pilots to get $300,000 in pay and benefits.” The airline’s response is “The only way that could work is if we pay the new pilots $16,000 per year.” The group of senior pilots responds “We can live with that.”

It also goes on to explain tired pilots and why you shouldn’t invest in an airline’s stock – US airlines use bankruptcy as part of their strategy. Branson touched on this himself in his letter to the pilots:

In America the internal strife in the airlines led to almost every one of them going bust; but importantly some of the jobs were saved by going into Chapter 11 and launching again. A luxury that doesn’t exist in the UK – you are either bust or you are solvent.

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• I’ve been telling a lot of personal stories in my recent blog posts, so this is no time to stop. A couple Christmases ago my relatives that live on a cattle ranch in Kansas asked my mother what book I might like for a present. The only two on my list at the time were “Losing My Virginity” (Richard Branson’s autobiography) and “Eating Animals” (or another book supporting a vegetarian diet). Since neither of those were appropriate titles, I had to choose a third book that I wanted to read.

 

• Even though Sir Richard is a baller, he is still susceptible to falling under the influence of all the CEOs before him. And by this I mean using cliches.
  

  Whilst on the subject of fairness I think it’s worth you knowing I have taken no salary out of Virgin Atlantic since 2005.

  This is always what rich people say in a pathetic attempt to relate to the common man. When you own a large chunk of the company you don’t need to take a salary. The stock is worth billions and if the company keeps growing it will be worth way more than any salary he could reasonably pay himself.

 

• Branson’s closing thoughts call out the breakdown in communication and how poorly the union and company are working together:
  

  PS: Having spent the last few days reflecting deeply on this issue I believe that both management and union need to urgently work together on modernising both their relationship and communications.