Virgin Atlantic GC: Cabin pressure
2 December 2013 | By Becky Waller-Davies
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For Julian Homerstone, being an in-house lawyer at Virgin Atlantic is like no other GC role with the inspiring and highly demanding Sir Richard Branson at the helm
Working for a company that is part of a roster of businesses calling themselves “challenger brands” while turning over billions of pounds every year is never going to be an easy ride.
“If you’re already at the top of the tree, it is a pressure to continue to perform,” says Virgin Atlantic general manager of legal affairs Julian Homerstone. “Richard [Sir Richard Branson] expects the best from his companies.”
Homerstone qualified into legacy firm Alsop Wilkinson’s, “the A in DLA Piper”, fledgling aviation department in 1998. He spent another four years there, being seconded as head of legal to British Airways’ low cost carrier Go at the time it was being transferred to easyJet then spending another 10 months on
secondment at Virgin Atlantic.
He took a roundabout route to DLA Piper, choosing to study geography and sports science at Loughborough and then studying for a PGCE at Oxford’s Pembroke College while he waited for his DLA-sponsored LPC to begin.
“I’d already got a training contract when I went to do the PGCE, but I had a year to kill,” Homerstone comments. “I thought it would be a good use of my time and it was fascinating.
“I do draw parallels between taking complex ideas and explaining them to children and taking complex legal ideas and explaining them to commercial colleagues,” he half-jokes.
Joking aside, Homerstone believes that he owes a lot to the fledging department, which he joined in his fourth training contract seat.
“The aviation department had just been launched with a load of lateral hires,” he explains. “What they were doing sounded very interesting – everything from air accidents to crisis management, the whole spectrum of aviation work.
“They told me that because they were only just starting up they couldn’t guarantee there would be the chance of qualifying into the department, but I didn’t care – I just wanted to work there.
“My view was that if I couldn’t take the risk doing something I was genuinely interested in before I had qualified then when could I? It paid off – they did take me and I have never looked back.”
It was while Homerstone was on secondment at Go that he received the call from Virgin Atlantic, asking him whether he would consider joining as legal counsel. He did so in 2002, working his way up to head of department in 2007.
Under his watch, the department has expanded rapidly, going from three to nine lawyers and mirroring the growth of Virgin Atlantic.
The airline now flies 5.5 million passengers a year to 35 destinations worldwide across Africa, Australia, the Caribbean, North America and South East Asia. It turned over £2.9bn this year.
Despite its vast size, it is still growing at a rate of knots, pursuing a joint venture with Delta Air Lines in the US and launching a domestic service this year.
The Delta JV goes live on 1 January 2014, selling flights from 31 March onwards. The collaboration, which resulted from Delta’s take-over of Singapore Airlines’ 49 per cent share of Virgin, will result in 31 daily services to North America, nine of them landing at JFK.
“Delta is a real game-changer,” Homerstone asserts. “It is part of a three-point strategy we have to return to robust profitably after the recession. It brings us shoulder to shoulder with British Airways.”
Despite reports of a lack of profitability, Homerstone insists that the company’s first domestic venture has hit its targets and, more importantly, is feeding passengers into its Heathrow network.Virgin launched its domestic service, Little Red, in spring of this year ready for the summer season. The service offers flights from Heathrow to Aberdeen, Edinburgh and Manchester.
“We’re a start-up,” he says. “You don’t expect a start-up business to be instantly profitable.”
Pushing the boundaries
Further away from home, Homerstone’s network with other Virgin Group heads of legal provides a reminder of how the company relies on its lawyer when pushing the boundaries of UK industry.
“Once when Virgin Galactic was starting up I got a call from its GC asking whether I had a space station contract,” Homerstone says. “Of course, I thought he was pulling my leg, but no. I did have to explain I didn’t have a pro forma space station contract. This was for the Mojave Desert.”
While Virgin Atlantic might never match the glamour of Mojave Desert space stations, Homerstone maintains that every Virgin company is run by the same rules.
“That is the type of company that Richard runs – literally, anything goes,” he says.
“Everyone tells Branson that he can’t do something and it’s like a red rag to a bull. He’ll ask if it’s impossible or just difficult, and if it’s just difficult he will surround himself with, dare I say it, good lawyers and good people, and we’re tasked with going out and making it happen.”
Julian Homerstone, Virgin Atlantic
Position: General manager of legal affairs
Legal capacity: Nine
Annual legal spend: £3m
General counsel (London), Global Aerospace Underwriting Managers
Global manages an international aviation insurance pool, which includes Berkshire Hathaway and Munich Re. This year we’ve opened offices in Cologne and Vancouver, so our business continues to expand even though the revenue outlook is challenging.
Clients may buy several billion dollars of insurance cover from several co-insurers. Global is often the lead co-insurer, so we have a key role in meeting the clients’ needs. Some claims arise from high-profile aviation accidents and it is vital to look after the clients’ reputations and not just the financial issues. Most of my time is devoted to this side of the business.
One of the things distinguishing Global from its competitors is a pro-active and client-oriented approach to claims. This is an important reason why we lead over
20 per cent of the world’s airline business and 50 per cent of the world’s aerospace manufacturers.
While civil aviation’s safety record continues to improve, the multi-party and multi-jurisdictional nature of much accident-
related litigation, plus often-
complex technical issues, are interesting and challenging. It’s satisfying to work with a client to protect its reputation and the integrity of its products as part of overall claims’ resolution, as happened with Rolls-Royce following the failure of one of its engines on a Qantas flight out of Singapore.
Global looks for policy cover to support its clients, unlike some of our co-insurers, and we were quick to confirm cover for the Sukhoi
Superjet SSJ100 fatal accident in Indonesia in 2012 on the basis of my advice.