they were given concorde on the plate. it cost them nothing for the government. they were given it for 1 pound. they have been given enormous advantages, and they are quite capable of standing and fighting, you know, they are a giant airline. they have a massive, massive advantages that have been bequeathed to them by governments in the past. i think there is absolutely no danger british airways or american airlines going out of business. . .

>> they will pop in and say, look, you've done very well last year, we gave you a 10 percent discount. now, that 10 percent discount that british airways, american airlines are giving are almost definitely their profit. so if they lost that 10 percent discount, they would go out of business. so they say to this travel agent, okay, last year you had 75 percent of the business, now we're merged, we expect you next year to get to 80 percent of the business, and if you don't get to 80 percent of the business, you won't get your 10 percent discount. so in the next few minutes, somebody comes in and wants to buy a ticket across the atlantic. you know, what's the best airline flying across the atlantic? well, virgin atlantic wins all

the awards, but is it likely that travel agent's going to recommend virgin atlantic? for their very survival they have to say i would recommend you fly british airways/american airlines because they've got to get up to 80 percent of that market share next year. and so it goes on until american airlines and british airways have driven out the remnants of the competition. i mean, it is preposterous that competition authorities can even consider allowing these two airlines to merge. i mentioned coke and pepsi. i mean, who would imagine coke and pepsi being allowed to merge? it is the exact equivalent if you look at their market shares. it is preposterous that it can be allowed. the frightening thing in america is that, you know, is that it can be done for reasons, it doesn't necessarily have to be done on pure analytical competition reasons. this is going to go to the

department of transportation, not necessarily the department of justice which would look at something like this on strict competition reasons. and politics can play a part. and that worries us. that's why, you know, i've come here today to really appeal to the can't of transport to look at this -- department of transport to look at this properly and note that we as an airline, we're worried. we've introduced thousands of innovations which other airlines have followed, copied us on. we introduced seatback videos in all the economy seats, we pioneered them. we're the first airline in the world to give people seatback videos. we introduced premium economy, full flat beds in upper class, stand-up baths for our passengers. you know, it's important for the consumer at smaller airlines like virgin atlantic survive and thrive. thank you. >> how much will your revenue

decrease from north atlantic flights if british airways gets antitrust immunity with american? >> i have no idea exactly how much revenue will decrease. but, you know, for the reasons i just, the example i just gave with the travel trade you can then, you know, move on to corporates and have the same arguments with them. they'll be able to twist arms, you know, they'll be the biggest behalf quos saw boss in town, and, i mean, they've even managed to go into travel agents and corporates over the last few weeks and get them to sign documents saying, you know, we think this merger's going to be a good idea. you know, what choice do these corporates or travel agents have when these enormous companies come in and can them to sign this bit of -- ask them to sign

this bit of paper? obviously, it's going to affect our revenue considerably, i have no idea exactly how much. >> what chance is there that virgin atlantic could actually fail if there is an b a/american her very? >> we have battled through 9/11, i mean, you know, just because virgin atlantic, i think, is a lot better airline across the atlantic than any other airline flying, i mean, when we started 25 years ago, there were 11 other u.s. carriers competing with us, pan-am, twa, air florida, people's express, all 11 of those carriers went bankrupt. virgin atlantic survived because we offer the best quality product across the atlantic. but to be perfectly honest, key not guarantee virgin atlantic's survival if, if ba and aa are

allowed to merge. it'll be, you know, like competing with our hands tied behind our back, our legs, you know, bound up. and it'll be, it'll be very, very difficult. >> tell us about your plans to operate the newest wide-bodied jet liner, the airbus a380. what markets will the 380 serve, will this aircraft be a formidable competitor to the ba and american airlines fleet? >> well, we will operate the a-380 on the longer routes, so routes like tokyo, hong kong, australia, los angeles. new york. and it's a great plane. we're actually at the moment talking to airbus to try to

persuade them to lengthen it because i think the economics of the plane will be astoundingly good if they can have a double-decker, double-decker. thank you. >> one of our members of the audience says he avoids heathrow because of high taxes and fees and congestion and suggests that why not move virgin's hub to another nearby airport? >> well, the only other airport nearby is galt wick, and we do have some flights from there. the problem is the economics are just not as good as heathrow, and the majority of people who fly to and from the u.k., the business community in particular, insist on flying out of heathrow. if you fly on virgin atlantic, we have our own drive-through check-in service, and we can get

you to our lounge in about 4 minutes from the the time our limousine drops you off at heathrow. and so, and so if you haven't flown virgin atlantic, give us a try, and hopefully we can win you over to heathrow. thank you. >> of all the countries where virgin does air transport, which country has the most restrictive laws and regulations? >> well, the airline industry's a strange, a strange industry in that there are still restrictions on a global basis. and we have urged for years that, you know, why should the airline industry be any different from any other industry? but, you know, america has a lot of restrictions. but in fairness, i mean, most countries around the world have a lot of restrictions when it

comes to the airline industry. >> you mentioned some of your innovative ideas like the seatback movies and all that sort of thing. who thinks these things up? are they in a room somewhere, you know, with chocolate and beer? and then how do you implement them? >> well, all the good ideas are thought up by myself -- [laughter] and all the bad ideas are thought up by people who left the company a long time ago. [laughter] >> which airlines do you think will survive and which ones will fail? >> well, it slightly depends on whether, whether there is an equal playing field. and as long as competition authorities create a level playing field, then i think that the better, smaller airlines will survive and grow.

i mean, if you take america, you know, southwest, you know, was once a small, very good airline. it's survived and grown because of its innovation. jetblue has survived and grown because of its innovation. virgin america will survive and grow because of its innovation and because it's the best domestic airline in the states. [laughter] and i think that there's a possibility that, that there will be, there will be casualties amongst one or two of the big carriers. and so there should be. you know, old, old trees die, old people die, and they leave room for new young, innovative saplings to come up and be innovative and bring competition and bring lower fares and be innovative. and that's, you know, that's, that's positive for any

industry. >> speaking of virgin america, how much money would you be willing to invest in it before pulling out of the market? >> i don't believe that -- virgin america is a company which i'm only a small shareholder in. and have, and have no direct involvement. but as far as i'm concerned, it's a great airline. it's doing well. and i think it will go on to doing great things. so again, i recommend you fly it. thank you. >> do you expect to see a u.s. government takeover of airline carriers as we're seeing in the auto industry? >> well, i think it would be the biggest mistake ever if the u.s.

government intervened to rescue, to rescue airline carriers. you know, if at least one or two of the big u.s. carriers went to the wall, i personally think that would be a good thing. it would, as i said, it would leave room for the smaller, more efficient carriers to step into their shoes and offer a better, better products and better quality. and lower fares. and so this is one industry that i pray that the american government doesn't go and waste taxpayers' money trying to bail out airlines. there's plenty of entrepreneurs who would be willing to step into the shoes of airlines that run into trouble. >> what do you think of the u.s. decision yesterday to cancel the plan to auction slots at the three new york airports?

>> well, i hadn't heard of it, and if it's true, i think it sounds like a dreadful mistake. you know, the, you know, jfk is full. that's very convenient for those people who are flying, you know, who have got slots at jfk. the only chance for other carriers to get in there is for slots to be auctioned. so i'm not quite sure who comes up with these ideas sometimes. >> aviation safety is in the news this week as the national transportation safety board investigates the crash in buffalo, new york. do you think the issues that have come to light including pilot pay, training and commuters, and commutes need action from the airline industry? >> uh, you'd better ask me the

last bit of that again. [laughter] well, look, obviously if there's an incident at airlines and the faa -- thank you very much. [laughter] airlines and the faa need to look at every single instance, see what lessons can be learned from them. i think fundamentally, you know, most domestic airlines and most international airlines are extremely well run. at virgin we are proud of the fact that, you know, we've run an airline for 25 years without incident, and i think you ought to be able to run airlines unless you have extremely bad luck without incident. it's the safest form of air travel today. >> what do you think contributes most to your clean record? >> which clean record are we talking about? [laughter]

>> the safety one. [laughter] i haven't looked at your -- [laughter] >> no, look, i mean, i think the most important thing if you run an airline, one talks about competition, one talks about customer service. obviously, the most important thing if you run an airline is safety, and people need to be absolutely sure when they get on board that that airline has an impeccable safety record, and so we pride ourself on making sure, you know, we have the best pilots with the long, a lot of experience before they fly for virgin. and, you know, the best engineers. we even go down to having names for each of our planes. i mean, that sounds, you know, what's the point of having a name for a plane? but, you know, the engineers know that scarlet lady, you know, maybe had a teething problem last week or the maiden

voyager, you know, i don't know, whatever. but you humanize a plane, and i think that's even good when it comes down to engineering practices. >> what is your near-term and long-term outlook on oil prices? >> oil prices today should not be at $60. and personally i believe that the market is being manipulated. obviously, we know that, we no that opec, you know, have a cartel that quite openly manipulates the market, and it's incredible that the western governments don't have a, a body to stand up against opec. it's one of the biggest, biggest cartels in the world, and it's there to drive up prices for all of us, all of us consumers in the west, and yet there's very

little done about it. but i also think that oil prices are being manipulated actually in the market and that i would say that governments need to investigate, you know, why our oil price is at $60 today when they should logically be at 25, $30 maximum. oil is awash in boats sitting around the world, it's, you know, the demand for oil has dropped, and what's going on? you know, our governments, you know, our governments of oil-producing companies buying positions on wall street to try to create a fall market? you know, it certainly needs investigating. anyway, that's the short term. longer term i think oil will go back, will go up, and it's likely to, you know, it's likely in a normal marketplace it

should sort of steady, you know, $70, something like that. and i think the world needs to realize that we are running out of oil and that, you know, come 2016, 2017 demand for oil will exceed supply. and, therefore, those people pushing for alternative fuels need to move, move as quickly as possible to get those alternative fuels. governments need to realize that the cleanest fuel, the safest fuel if you look at statistically is nuclear energy. and i think try to emulate what's happened in practice. we -- france. we need to try to produce as many nuclear power stations as

possible. particularly if we're going to try to combat global warming as one of the only real weapons to try and combat global warming we have. but, you know, but if we don't move quickly, i think we could see oil creating the sort of second giant recession just as this recession starts coming out again by oil prices soaring to levels that will, you know, which will tip, tip the world into another recession. >> does your advocacy of environmental issues and alternative airline fuels and carbon trading make virgin atlantic less competitive, and why aren't your competitors following your lead? >> well, i don't necessarily think it makes us less competitive. what we're saying is that all the profits that we make from

our dirty businesses will be invested in trying to develop clean fuels, and i mentioned earlier that one of our companies that we're involved in, jivo, have developed a fuel called isobutte knoll. now, the exciting thing is it can be made from sugar. the world is awish with sugar. it's bad for you. it creates diabetes. and, you know, it's -- and, therefore, you know, turning that into fuel is a good thing. and a good thing unlike ethanol which is that it doesn't freeze at 15,000 feet, it works fine at 35,000 feet, and if you're in a jet liner, it's quite good to have a fuel that doesn't freeze at 15,000 feet. and, and it works.

so, you know, so investing the profits from our airlines into trying to develop clean fuels like that shouldn't put us at a disadvantage because, obviously, we hope that those fuels themselves will become profitable businesses in themselves and, therefore, ultimately the virgin group will be as strong as it is today. i think that, you know, why are other airlines not doing more in this area? i mean, i've, i've been fortunate. i mean, i've had time meeting people like al gore, i've read, just read james lovelock who's a 90-year-old absolutely brilliant scientist and essential reading for everybody, i think. tim flannery's book, the weather makers, and, you know, read a lot about global warming, and i'm, you know, i'm not sure whether it's too late, but we have got to move extremely

quickly, i think, to save this beautiful world we've got for our children and grandchildren. so we will keep working on it. >> how quickly could some of these alternative fuels come online, and what's the outlook for alternative fuels, things we haven't even thought of for the next decade? >> well, i sort of answered part of that question, but i think the, i think that the alternative -- there's some alternative fuels that could be used right away. i mean, if america wasn't trying to protect its farmers, and i think mistakenly trying to protect its farmers who produce corn-based ethanol and effectively making it prohibitively expensive for sugar-based ethanol to be brought in from brazil, most of your cars in america could be

run today up to 85 percent of all cars, you know, every individual car could be run on a very clean sugar-based ethanol from places like brazil and the caribbean. and the, and the corn-based farmers could mix in their fuel as well. and i don't think they would actually suffer too much from that because i think the ethanol market needs to just, just to grow. things like isobutteal, you know, may be two, three years off, and in order to create enough of that large refineries are effectively going to have to be built, so it's going to take time to really maximize the amount of fuel. but hopefully within 5-10 years there should be enough

isobutynol definitely virgin atlantic's fleet and hopefully quite a few other fleets as well. >> okay. moving on to rail travel, begin your experience -- given your experience with rail in europe, how do you view the attempt by president obama to establish high-speed passenger rail in the u.s.? what does he need to do to succeed, and would you invest? >> well, the british government were brave enough to provetize the rail networks -- provetize the rail networks in the u.k. about ten years ago, and we've stepped in to take over the west coast main line which is really the biggest, the biggest line in the u.k. and we've doubled the number of passengers traveling on that line from, i think very rough figures, something like 15 million per year to 30 million per year. since taking it over. and the way we've done that is

by introducing high-speed trains. the advantage of having high-speed trains is not only do they go quicker for the individual who's on that particular train, but it means that we can get many more trains onto the track, and so, for instance, if you're going from london to manchester, you can travel by train every 20 minutes. and the trains are capable of even more, and we hope that we can get that down to every 15 minutes. and, you know, now we've got full internet use, and you don't ever get cut off on your phone. i mean, basically why would anybody consider getting on a plane or getting in a car? and so it's been, it's been a tremendous success story and something which, you know, one of the things we're most proud of making a real difference in the u.k. on. if invited, you know, we'd be delighted to come and use the energy that we expended in the

u.k. looking at the american train, train network and see if we couldn't do the same here, and i'm sure there are certain routes that could, that would make a lot of sense. and i think it's extremely good that obama is thinking about trains. they are environmentally much more, much more friendly than planes and cars. and it's a really delightful way of traveling. >> can you tell us the current status of your venture on affordable space travel, and do you think virgin will fly to the moon in your lifetime? >> i hope so. well, where are we? extremely exciting in a spaceship one flew proved that a reusable spaceship could be

built and run by a commercial company. so we have been building eve, which is the mothership to take spaceship into space. the mothership eve is now finished and flying, beautiful looking, beautiful looking craft named after my mother. of course, it's beautiful. and, therefore, the craft that is now capable of taking the spaceship up to 60 thousands feet is ready to do its job. the spaceship will be finished for its first tests at the end of this year. and the rockets are firing well and have been properly tested. and so the end of this year we'll go through extensive tests. i mean, it may last 18 months, and then at the end of the 18

months myself and my children and my parents and the genius designer of all this will go into space. so tremendously exciting. new mexico building a space port for us in the desert there. which is, which is going to be an incredible space port. and, you know, it's the birth, i think, of a whole new era of space travel. very environmentally-friendly. the cost of, the cost of us putting somebody into space will be less than flying to london and back on a commercial plane. so massive difference to the, to the environmental cost of, say, a nasa spaceship going into space. we're also going to be able to put satellites into space at a fraction of the price that satellites currently go into space. so exciting days. now, whether we'll ever go to

the moon, i think we'll just give the moon a miss and go straight to mars. thank you. [laughter] >> okay. we are almost out of time but before asking the last question, we have a couple of important matters to take care of. first of all, let me remind our members of future speakers. tomorrow john w. roe, chairman and ceo of exelon corporation, will discuss national energy policy in a time of economic uncertainty. on may 21st, ray lahood, the u.s. transportation secretary, will discuss his agency's involvement in president obama's $787 billion economic stimulus package aimed at turning around the u.s. economy, and on may 28th mary tyler moore, actress and international chairman of the juvenile diabetes research foundation, will discuss research and finding a cure for diabetes. second, i would like to present mr. branson with the traditional npc mug.