VIRGIN ATLANTIC AIRLINES
Tim Dunlea
 Tristan Richards
 Bob Dunoskovic
 Philip Winchester
 Lindsay Charles

HISTORY
VIRGIN GROUP
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Parent Company
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Virgin Atlantic
Virgin Holidays
Virgin Trains
Virgin Balloon Flights
Virgin Mobile
V2 Music
V.Shop
Virgin Bride
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London Broncos
Virgin Express
Virgin Wines
Virgin Cosmetics
Virgin Cola
Virgin Publishing
Virgin Megastores
Virgin Energy
Virgin Direct
CURRENT SITUATION

Second Largest Long Haul Carrier in UK
 Third Largest European Airliner operating in
US
 Fifth Busiest Trans-Continental Airliner in
1999 Behind:
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Continental
(1,947,000 Passengers)
Delta
(1,827,000 Passengers)
British Airways(1,611,000 Passengers)
Lufthansa
(877,000 Passengers)
Virgin
(872,000 Passengers)
CURRENT SITUATION
Average Growth Rate Through 2000
was 26.4%
 September 11, 2001

ALLIANCES
Singapore Airlines
 Continental Airlines
 Malaysia Airlines
 BMI British Midland
 Nationwide (South African)
 Air India
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FLIGHTS
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From UK to:
– North America
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New York (Newark, NJ)
Miami
Los Angeles
Boston
Orlando
San Francisco
Washington DC
Las Vegas
Chicago
Toronto
– Africa
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Johannesburg, SA
Cape Town, SA
Lagos, Nigeria
Port Harcourt, Nigeria
– Asia
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Tokyo, Japan
Hong Kong, China
Shanghia, China
Delhi, India
FLIGHTS
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From UK to:
– Caribbean
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Barbados
St Lucia
Antigua
Tobago
Grenada
US DOMESTIC AIRLINE
FLIGHTS (1998) (Business Ranking Annual 2001)
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New York to Los Angeles *
New York to Chicago *
New York to Miami
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New York to San Francisco *
New York to Boston
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Honalulu to Kahului, Maui
New York to Orlando
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New York to Atlanta
New York to Washington *
Dallas to Fort Worth-Houston
(3,625,000)
(3,069,000)
(2,834,000)
(2,683,000)
(2,651,000)
(2,541,000)
(2,251,000)
(2,377,000)
(2,372,000)
(2,313,000)
MARKETING
PROBLEMS

The Richard Branson Factor
SWOT
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Strengths
– Richard Branson
– Privately Owned
– Good Image / Good Marketing
– Youngest Aircrafts in the Industry
– Low overhead
– Leased Aircrafts
– Flights to Major World Cities
– Alliances
– Sr. Leadership Team
SWOT

Weaknesses
– Richard Branson
– Cash Flow
– Direct Routes
– One Hub
– Limited Destinations
SWOT
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Opportunities
– More Cities
– Bankruptcy of US Airline Companies
– European Union
SWOT
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Threats
– World Economy
– New Airline Restrictions
– Fuel Cost
– Terrorism
– Over Flight Restrictions
– New Airline Companies
POSSIBLE STRATEGIES
OVERVIEW
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Expand partnerships to broaden service
Invest in U.S. expansion, more cities
Increase service between cities
Increase advertising
Explore alternative marketing strategies
Reconsider use of Gatwick Airport
EXPAND ALLIANCES

Currently, Virgin has five alliance airlines
 Three partners offer service from London to
only one other city
 The fourth offers connections from London to
five cities: Amsterdam, Brussels, Dublin,
Milan, and Madrid
 The fifth offers service only between South
African cities
EXPAND ALLIANCES

To reduce risk and costs, Virgin could partner
with other high-quality airlines to broaden the
area covered
 Frequent flier miles would transfer easily
between alliance airlines
 Virgin could provide service to smaller
markets
U.S. EXPANSION

Virgin offers service from London to NINE
cities in the United States
 Cities such as Chicago, Detroit, Atlanta, and
Philadelphia are not on the list
 Possibility of capturing market share in cities
not currently being served by Virgin
INTERCITY SERVICE

Currently, Virgin only offers flights to or from
London
 There is a great opportunity to offer flights
between cities in which Virgin already offers
service
 The London market, while large, is very
limited – intercity service could increase
Virgin’s market
 The U.S. needs an airline that will provide
consistently high-quality service
INCREASE ADVERTISING

Virgin spends only 2% of turnover on
advertising
 The industry standard is 5 – 7%
 Virgin has marketed itself very successfully
using only 2% of turnover; the possibility
exists to increase advertising while still
staying well below the industry standard
MARKETING STRATEGIES

Introduce a credit card that offers airline miles
for every dollar charged
 Use Richard Branson, the charismatic
Chairman of Virgin, in some of its
advertisements
 Emphasize the quality of British service in
American advertisements
(case in point: the English butler)
GATWICK

Gatwick Airport is located 28 miles south of
London, and cannot be reached using the
city’s extensive Underground system
 The airport has only one runway
 When travelers think of London, they think of
Heathrow – Gatwick is out of the way and not
an option that springs to mind
 Virgin may want to reconsider using Gatwick
OPTIMAL SOLUTION

Broaden service by:
– Partnering with other high-class, highquality airlines to provide service to cities
currently not being served
– Offering service between U.S. cities
currently served by Virgin
– If these strategies are successful, gain
entry to other airports in the U.S. to expand
to more cities
OPTIMAL SOLUTION cont.

Increase advertising slightly to cover new
markets in the United States
 Strive for better recognition in the United
States, as Virgin is not necessarily regarded
as an option by travelers
 Offer a Virgin Atlantic credit card in
partnership with Visa or American Express,
with a good rewards program for cardholders