Reimagining Business during the COVID-19 Crisis | Keshav R Murugesh in Conversation with Shai Weiss

Keshav R. Murugesh – Group CEO, WNS

Hello, and welcome to this edition of "The Turning Point."

I am Keshav Murugesh, Group CEO of WNS and excited to be the one who gets to ask the questions today!

'Stories with a difference that made a difference' – is what 'The Turning Point' is all about. The best part is that these stories will be narrated by the very leaders who made them happen! Turning points are many, be it in our personal or professional life. How we dealt with them, the lessons we learned, and the changes they brought about in us become the differentiator in the long-term. The essence of this conversation series called the ‘Turning Point’ is all about discovering such stories and the individuals who made them happen or were in them when they happened.

Switching gears… Romantics say, "Love is in the air!" My guest today has literally made that happen as the CEO of Virgin Atlantic. Love is a key performance index at Virgin Atlantic to provide the human touch to the business. Surprising for all of us who run businesses isn’t it? How can something so intangible become a key measure for performance! But someone actually thought about it and made it happen, and I have the honor of having him in conversation.

I would like to welcome Shai Weiss, the Chief Executive Officer of Virgin Atlantic and an Executive Director on the Virgin Atlantic board to this edition of Turning Point. Joining Virgin Atlantic as Executive Vice President and CFO, Shai later assumed the role of Executive Vice President and Chief Commercial Officer before taking over the reins as CEO.

Shai is the man behind the turnaround of NTL:Telewest – now Virgin Media—one of the largest fixed home phone providers in the UK and Ireland. Shai also serves as a non-executive director of Checkpoint Software Technologies, a leading provider of cybersecurity solutions to governments and corporate enterprises globally.

Thank you, Shai, for taking the time to discuss the 'The Turning Point' in Virgin Atlantic and the airline industry.

We hope to make the next 25 minutes packed with interesting perspectives from Shai, so I will shoot right ahead.

Keshav : 2020 has been an extremely tough year for the airline industry. Your recent 'private-only solvent re-capitalization' of Virgin Atlantic is a bold move to secure Virgin Atlantic's present and future. As someone who has consistently taken bold and decisive actions at turning points, how do you think this will enable Virgin Atlantic to survive and thrive in the new normal?

Keshav R Murugesh – Group CEO, WNS: As someone who has consistently taken bold and decisive actions at turning points, how do you think this will enable Virgin Atlantic to survive and thrive in the new normal?

Shai Weiss, CEO, Virgin Atlantic: First of all, Keshav, good to see you and thanks for hosting me! Truly a pleasure to be on this platform with you and WNS. That’s really the big question. First of all, we had no other option but to fight for our survival and our fight continues, it is not over yet. It has come at a devastating cost to jobs. We have lost thousands of colleagues, with one in every two jobs been lost in Virgin Atlantic. But hopefully the future will bring an ability to welcome so many of these people and our colleagues and friends back to Virgin Atlantic, just as we have done after 9/11 attacks and other big dramatic turning points as you say. Virgin Atlantic’s mantra out of the crisis is – Survival, Love for employees and customers and Profitability. We must use this crisis to the fact that we have done things so dramatically different. Cut our costs, improved our cash, changed our network, and as I said, of course, at a devastating price to jobs but the future will allow us to become sustainably profitable. So, everybody talks about using a crisis to be better and I think what will emerge from this is a leaner, meaner Virgin Atlantic that can still be and will be the most loved travel company. But we will do so in way that becomes sustainably profitable. And I think it’s fair to say that our financial performance has not been as good as we would have liked in the years ahead of this crisis, of course, during this crisis it was all about survival.

Keshav: Fantastic! So, lean mean fighting machine with a solid balance sheet is what you are indicating.

Keshav: Virgin Atlantic's cargo-only passenger aircraft flights program is reported to have given the highest cargo revenues in May 2020. While this has prompted you to increase such flights by 33%, do you envisage adding more passenger/cargo combi aircraft to your fleet?

Shai: Yes, first of all just a bit of back run for anybody who is listening, I think it’s just an amazing statistic to highlight. From April 20, 2020, for the next 90 days, there were no passengers on Virgin Atlantic’s flights. And if I would have said that any airline in the world or any business that you have no customers for a period of 90 days in the midst of this amazing crisis that will be unheard of. But that was when we transformed passenger planes to cargo-only planes to remain functional during the pandemic. Transition to cargo-only flights has been Virgin Atlantic’s lifeline and kept the company match fit during COVID-19 crisis.

Shai: In 2021, I would expect that the demand for passengers would make cargo-only flights or cargo-focused flights as they are really right now less of an issue. But in the first half of 2021 you would expect us to be fully participating in testing, running special flights for the UK government to bring in Covid-19 vaccine test kits as it requires very special logistics. Right now, I don’t know how much we can participate in the government’s vaccine drive but Virgin Atlantic is full geared for that. 2020 could be a record year for Virgin Atlantic’s cargo operations, for cargo, up 30 to 40 percent in amid the pandemic. In 2021 the aim is to get back to flying as many passengers as we can and, also continuing cargo operations, but in a more balanced way.

Keshav Murugesh – Group CEO, WNS

A fall-out of COVID-19 is that businesses have taken to remote working technologies with ease. Personally, I haven't stepped out to travel for the last 7-8 months. Given the sweeping digital urgency driving work norms today, how are you going to persuade business travelers to resume traveling like they did? Is there a particular innovation to transform the future flying experience that you're excited about?

Shai Weiss - CEO, Virgin Atlantic:

It’s fair to say that we don’t know exactly what the new normal will be and we’ll have to witness it. I have no doubt that the demand for travel will resume and we will get back to the 2019 levels, which were record years for aviation, in a more sustainable way by 2023. Till then we are going to witness an increased demand from leisure passengers especially during the summer. Virgin Atlantic has a heritage in providing great services for leisure passengers. Long term, I have no doubt that business travel will reduce due to technology and platforms like Zoom and Teams, but fundamentally I believe that face-to-face interactions, closing deals, understanding the cultural heritage of our counterparts and the need for bonding is also an essential part of business. I don’t know what the new normal will be, but I do know that it will be different and I expect it to be different. For that matter the connectivity on planes has to be ubiquitous. Virgin Atlantic expects less demand for business travel in the first few months of 2021 and the company is geared to cater to both business and leisure passengers as soon as normal operations resume.

Keshav: IATA and IAG recently talked about their plans for a Travel Pass platform to re-open international travel. There have also been talks about a digital health passport. In your view, how can airlines, governments, and regulators join hands to enable the aviation industry to integrate health safety and revenue security – and be part of a broader economic revival?

Shai: First of all, most of the governments have really worked in isolation from each other. Everybody was focused on their own country in containing the virus and thinking of how to get out of this crisis. In the short-to-medium term we can’t rely on the vaccine as the remedy for all. Frontline health workers and those in critical jobs will first receive the vaccine. Also, I think pre-departure testing is fundamental. We’ve been very big proponents of testing, track & trace and isolate, and using science to back up our claims. And of course, an exchange of information based on international standards which airlines have been traditionally very good at working with governments. I think we are part of a control chain with IATA and the international standards promoted by ICAO to provide this standard of what testing is relevant and valid which is accepted by nations on different locations. And then, of course, how do you then show that you have a vaccine and then in the meantime how do you actually show that you’ve adhered to various regulations which vary between country and country. It’s a very complicated matter and I think now that people have more of long-term view or medium-term view as things have started to turn despite the fact that it is going to be a very tough winter. This is the time for players like Virgin Atlantic, regulators like IATA and ICAO and all our partners (competitors in the market place but partners in solving the recovery from this crisis) to unite and set global standards in place.

Keshav Murugesh – Group CEO, WNS

As a CEO and business leader, what did you learn new about yourself and your team during this crisis? What were your highs and lows – and, if given a chance to turn back the clock, would you have done anything differently?

Shai Weiss - CEO, Virgin Atlantic:

I just finished a session with our senior leaders, a group of 86 individuals, sharing with them the observations about what I have learnt. I think the most important thing that I have learnt is Trust. Trust in your team to do the right thing even under the most demanding of situations which we face. But for doing that, and these are business clichés which have proven for me absolutely right, you must have right people on the right chairs on the bus and then the bus must direct itself in a very clear direction. Then comes trust and I have learnt to trust my team more and more through the crisis. One thing that I’ve learnt about myself is that I have the capacity to trust despite the fact that I want to know a lot and I believe that I can contribute. But you know the demands on any individual and of course on myself during these past 10 months don’t allow you to know or understand or figure everything out, so trust must be the fundamental piece.

Shai: The second thing that I’ve learnt is that the people at Virgin Atlantic have an unbelievable passion for the company and because of that the amount of discretionary effort we got from everyone is second to none. I didn’t need to ask for anything in terms of please do this or are you okay, actually most people were asking me if I was okay; Am I in a healthy position, both mentally and physically, which I am glad to say I was. The last thing which the people see from me that I believed, despite the difficulties I had, that we could make the impossible possible. Now I think we are more confident that we will achieve that, of course, more risks remain in the future. But I think we are now in a good fighting position and the battle is worth fighting for.

Keshav: Inspirational I must say! Shai, you have said that you are very strict on the 'love index' as a key performance indicator. I firmly believe in the human touch of business, and I am curious to know if you have cracked the code on measuring this index?

Shai: First of all, I come from a finance background and when I introduced the notion of LOVE in the UK it didn’t always sit well, despite the fact that everybody understood what I was trying to say in terms of being the most loved travel company. But we’ve taken it a bit further, and in this quest to define and quantify and measure, I and my team did a lot of analysis of market share and improvements in revenues. At the end of the day that doesn’t work. We have two measures for LOVE at Virgin Atlantic: Employee Happiness Index – We measure religiously the engagement of our people and by the way we are now in a re-engage mode. Remember many of our people still are on furlough/not working, many of our people are in new jobs, so for us it is a re-engagement. We love, we introduce, we commit. But we measure happiness on an ongoing basis. And we believe that if we have a happy workforce, we can translate that into unique Virgin Atlantic service. After numerous ideas we’ve landed where we started – Net Promoter Score. What our customers think about Virgin Atlantic at every touch point. For instance, now we’ve introduced the bathroom cleanliness which is measured on flights because it’s so important for people to feel safe and healthy. The Net Promoter Score is what unites us across and I can only say that during this pandemic we have reached record highs of Net Promoter Score. Not surprising because people who fly right now are people who want to fly or love or need to fly. But in the pandemic when we can’t even show a smile because all our people are wearing masks and everything is about human touch for us, beyond technology and digital which, of course, are essential. If we have a happy workforce, we will have a happy or loving customer base that will translate into a more profitable airline.

Keshav: That’s wonderful!

Keshav R. Murugesh – Group CEO, WNS

Now let's get a little more spontaneous with the 'Rapid-fire Round' of questions!

Here goes…

Keshav: 2021 – doom or boom?

Shai Weiss - CEO, Virgin Atlantic:

Boomish!

Keshav: A turnaround story that has most inspired you?

Shai: I know this is going to be self-serving but I now have witnessed one of the greatest one’s which is our own. Being a part of this amazing team during this pandemic despite the devastation to lives and livelihoods of many including many of our own, making the impossible possible at Virgin Atlantic. When we have time and perspective, more time and more perspective, I think we will see that our people did something quite amazing. So, so I have to say it’s our own story.

Keshav: The one business perspective that COVID has changed for you?

Shai: Our financial performance has not been good enough and we accepted it as a norm. I say 2020 has been like a crisis like no other, a response like no other, a devastation like no other, other than the second World War; It’s the biggest devastation that we have seen. But we have done a lot of things differently including stuff that we’ve done with WNS and automation and robotics in record time. For the future only carry on is allowed; Leave behind the things that you thought that were so important, they are important but they are part of the past; Nimbleness, agility and focus are the only way ahead in post-COVID new normal.

Keshav: What kept you motivated personally throughout the crisis?

Shai: From February 01, 2020 Virgin Atlantic suspended its flights to Shanghai due to the outbreak of pandemic. I asked myself that itis going to take everything, I’ve got and we’ve got as a company and as individuals. But what motivates you and is essential to understand and I must say I put to one side ego and I put to one side money and figured that the thing that would keep me motivated and despite setbacks, and there were tremendous setbacks throughout the last few months including of course the loss of jobs, is the knowledge that we just celebrated 36 years of Virgin Atlantic and there are still many jobs to protect. So, it was all about understanding Virgin Atlantic deserves to be around for the next 36 years and beyond, and that every job is worth fighting for. That is the only thing that matters to me, the rest will take care of itself.

Keshav: What is your inherent personality – the daring risk-taker or the steady cruiser?

Shai: Absolute risk taker

Keshav: Take your pick - to be the most loved travel company or the most profitable airline?

Shai: That’s a very hard choice to make. The assets that we have, we got also recognized for what we are, we are not going to be the most profitable airline. We will be profitable and very well performing but we can and our right to win comes from being the most loved; so, I’ve got to choose most loved.

Keshav: Arsenal FC or Chelsea FC - whose jersey would you want to wear?

Shai: In my office there is a very nice Dennis Bergkamp signed jersey. So, my favorite is clearly Arsenal, despite the fact that I live very close to the Chelsea Stadium in North London. My wife always asks me why do I continue supporting Arsenal when Chelsea is doing so much better. We all know the answer to that. It is impossible to just swap a team because they are not doing very well.

Keshav: Just don’t wear the wrong jersey to the other club.

Shai: That’s right, yes, or in the neighborhood for that matter.

Keshav: Thank you, Shai, for a wonderful conversation and some amazing perspectives – time both flew and stood still!

Keshav: Shai lives by the three tenets he preaches – take risks, be useful and be curious. They symbolize the leader who is willing to push boundaries and create turning points rather than reacting to them. Crisis or not, under Shai's stewardship, Virgin Atlantic has been a torchbearer of customer-first innovation – not just flying the charted routes, but actually charting newer ones.

Keshav: The airline industry may be one of the worst-hit by COVID-19, but Shai has made optimism sound very real in soaring higher than the crisis. It is exemplified in his recent quote - "When our customers return to the skies, we will be there to welcome them onboard with belief in our future."

Keshav: I hope you enjoyed the story brought to you in this edition of 'Turning Point'. Stay safe, stay healthy until we meet next time! Shai Weiss – CEO, Virgin Atlantic

Shai: Thank you, Keshav, what a pleasure!