Steve Ridgway: Virgin Atlantic chief navigates brave new world under Open Skies treaty

A day at the Life: A day at London airports ends with the prospect of a trip on one of Steve Ridgway's favourite modes of transport: his yacht
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The Independent Online


Steve Ridgway can't help indulging in a bit of Schadenfreude. Waking up to day two of chaos at Heathrow's terminal 5, where Willie Walsh, his counterpart at rival British Airways, has just cancelled 20 per cent of the day's flights to follow a disastrous first day of delays and lost bags, the chief executive of Virgin Atlantic looks on in bemusement.

"It's a shame there wasn't better planning in place. It just goes to show that big is not necessarily beautiful," he says.

And so begins another day at the head of one of the world's most recognisable long-haul airlines.

He is close to the action, having spent the night before at, he admits sheepishly, the Heathrow Marriott. The less-than-glamorous lodgings seem unbecoming for the head of the airline that has so assiduously fashioned an image of being different in an industry renowned for its staidness. "How corporate is that? It's not normally what we do," he tries to explain.

It was just a question, he assures us, of practicality. The night before, twenty or so of Virgin's country managers flew in from all corners of the globe – Shanghai to Lagos to New York – to attend a dinner and update him on the progress of the airline's operations abroad. He follows up this morning in the hotel restaurant, chatting over breakfast with several of the visiting executives, who will fly back later in the day to their respective home bases.

Unfortunately, the fare on offer from the Marriott's menu means that he is deprived of his usual breakfast choice: Weetabix.


Yet issues much larger than a dearth of breakfast cereals are weighing on his mind. Tomorrow marks the beginning of a new era of competition in transatlantic travel. The so-called Open Skies treaty will allow any airline to fly between Heathrow and America, a privilege that for decades had been reserved for just four: Virgin, BA, United and American Airlines. New entrants such as Continental Airlines have announced new routes, while others, like United, have increased the number of routes and destinations between the two countries.

Everyone is angling for an advantage over their rivals in this brave new world. Each mis-step, like BA's T5 travails, is magnified by the suddenly higher stakes.

It is against that backdrop that Mr Ridgway heads to Heathrow for meetings with Virgin's head of sales and marketing and facilities director.

The soaring ceilings and wide-open spaces of BA's new showpiece hub stand in contrast to what Virgin has been up to. Last year it opened its Upper Class Lounge in terminal 3. Premium passengers are ferried in a limousine from their homes to the airport, where they pass from the kerb, through a private security channel and into the lounge in an average of less than 10 minutes.

Mr Ridgway says T5 – billed as Europe's largest free standing building – is ill-conceived, and that customers will be put off by the long distances they will need to walk from check-in to the gates. "Passengers don't want vast buildings with complicated processes. They want a quick, seamless journey," he says.


Off to an interview with a CNN television crew at Heathrow, where the journalist is quizzing Mr Ridgway about the extent to which Open Skies will change travelling for customers.

It has been a long time coming. The treaty was the result of years of hard-nosed negotiations between European and US politicians. Some are promising revolution. Mr Ridgway is more circumspect. Yes, European carriers have launched new routes, Virgin and BA will be able to increase the frequency of their services, while American rivals have invested hundreds of millions in upgrading their business and first-class cabins to bring them on par with the far superior offerings from European and Asian carriers. But don't expect prices to come down. "Fares," he says, "are already at an all-time low."

The key for more radical change will be addressed in May, when Europe and US lawmakers sit down to talk about the second phase of Open Skies. The first phase of the treaty lasts for two years, and will lapse entirely unless America gets rid of rules that prohibit foreign airlines from owning US carriers.

It is in such situations where Sir Richard Branson, with his notoriety and Rolodex of top political and business leaders, plays a key role. Mr Ridgway is happy to cede such headline-grabbing roles to the bearded one. But when it comes to day-to-day operations, it is Mr Ridgway who runs the show.

12 noon

The CNN interview done, Heathrow is rapidly disappearing into the rearview mirror as Mr Ridgway bombs down the M25 in his BMW 535d on his way to Virgin's headquarters at Gatwick. Gliding past other drivers, the heavy-footed executive expounds on the protectionist stance of the US. In short, he says, it has done them much more harm than good – all major US carriers, barring Southwest Airlines, have either been bankrupt, or narrowly escaped it, since the September 11 terrorist attacks.

"There is a growing realisation that this needs to happen and why shouldn't it. Aviationis the last global industry thatis regulated in this way, that doesn't let market forces operate as they should," he says. "Show me how protecting these carriers made them great airlines and great businesses."

With the price of oil heading inexorably northward, and the British and American economies looking increasingly shaky, the ownership issue will become crucial. A shake-out, he says, is coming. "We'll be around to take advantage of the opportunities. Some carriers will be put under pressure, especially those that are less efficient and operate older aircraft."

A loosening of the US rules would also allow the company to take greater control of Virgin America, the carrier that was launched last year only after the mother company grudgingly agreed to put its 25 per cent stake into a trust and get rid of some non-American executives to comply with US law.


Yes. Heathrow to Gatwick in 45 minutes – he likes to stretch the legs of the car's turbo-charged diesel engine.

After a quick bite, the rest of the afternoon is filled with a raft of meetings with managers on the industrial side.

Top of the agenda is, not surprisingly, airplanes. Mr Ridgway has been one of the first to publicly raise concerns about the state of Boeing's 787 Dreamliner. Having placed an order last year for up to 43 of the state-of-the-art aircraft worth up to $8bn, he is understandably worried about rumours of delays which could be more severe than those that have afflicted Airbus's A380, which has fallen two years behind schedule.

"We need to understand what the implications are," he says. "We haven't had any details on the delays and whether it's manageable. We will have to look more seriously at alternatives."


With the day done and the weekend beckoning, Mr Ridgway climbs back into his beemer, destined not for his flat in Kensington, where he lives with his wife and two of his three grown children, but for his home on the south coast. It is there that Josephine, his yacht, is waiting. Gliding out on the Solent, he says, "helps to blow the cobwebs out after a week of aviation".

The CV

Name: Steve Ridgway

Age: 56

Education: Economics (BSc) from University of London.


1979: Business development manager at the Toleman Group.

1981: Employed by Cougar Marine (Miami), where he first worked with Sir Richard Branson asproject head and chief pilot on the Virgin Atlantic Challenger boats.

1989: Joined Virgin Atlantic as managing director of Virgin Freeway, the frequent flier programme.

1992: Promoted to marketingdirector, before being appointedto the board in 1994 as boss of customer services.

1998: Appointed managing director in 1998, and took over as chiefexecutive in 2001.