Virgin Atlantic Airways-Ten Years After
Created By: Vijay Ahlawat
1
The Origins of the Virgin Group
• 1970-Branson founded a mail-order record business
called Virgin.
• 1971-The first Virgin record shop was opened.
• 1978-The Virgin nightclub opened.
• 1983-Virgin Vision was created.
• 1984-Virgin Atlantic Airways and Virgin Cargo.
• 1985-Virgin Holidays.
• 1992-Branson sold Virgin Music to Thorn EMI.
2
The Creation of Virgin Atlantic Airways
• Richard Branson was approached by Randolph Fields, a
31-year old man who wanted to start a transatlantic
airline.
• Learn the experience of Laker Air.
• Leased a second-hand 747, and has a sell-back option.
• Create the airline within 3 months.
3
Intro.-Richard Branson
★Learning disorder.
★Write pornography in the library.
★Donate 3 billion dollars to help
the recovery of global warming.
• Travel around the world with a balloon.
• The headmaster had told him that
“Branson, I predict you will either
go to prison, or become a millionaire.”
4
Early Years(1984~1989)
• From London (Gatwick Airport)
• 1984 to New York
• 1986 to Miami
• 1987 to Boston-arrive
• 1988 to Orlando
• 1989 to Tokyo
• 1990 to Los Angles
5
Virgin Classes
• Upper classes & economy classes.
• “Offering a first class service at less than first class
fares.”
• Special service for children and infants.
• Introduced its Mid-class in 1992 after realizing that 23
％ of economy passengers traveled for business.
7
Service the Virgin Way （ 1 ）
• Service Concepts
-Original ： Keep up customers’ interest by keeping
service at the forefront of activities.
-Spontaneous :Aimed to be proactive, not defensive.
-Informal.
-Turn flying into a unique experience ， not just to
move
passengers from one place to another.
8
Service the Virgin Way （ 2 ）
• Service Recovery
-It handled complaints from Upper Class passenger
within 24 hours, those from Economy Class flyers
within a week.
9
Innovation
• Introduce video entertainment.
• Controversy over if smoking should be permitted.
• Automatic defibrillators to three-person special facilities
unit.
• The Virgin Clubhouse in Heathrow and Hong Kong.
• Motorcycle rides -Honda PC800.
10
Customer Orientation, Virgin Style
• Understand customers’ needs & go beyond their
expectations.
• Price consciousness & rising service expectations.
• Customer Feedback-questionnaire, informal interview.
• Fun & entertainment airlines.
• The staff are more exacting in evaluation than the
customers.
11
Virgin’s People
• The ideal employee:” Informal But Caring”.
• Involve the management and staff.
• Employees discuss Richard Branson with respect and
admiration.
• Stimulate the individual.
• Open to suggestions and innovations.
-Call Richard Branson if necessary.
-Formal suggestion scheme.
-Encourage innovation.
12
Virgin’s Main Competitor
Brand Equality Survey
perceived Spontaneous Usage Rating of
strongest awareness brand
brand name in (%)
(%) names(0-
transatlantic
travel(% of
100)
awareness)
British 70 96 93 85
Airways
Virgin 24 74 48 80
Atlantic
Airways
Source: Business Marketing Service Limited(BMSL). Based on 141
interviews of executives from the U.K.’s top 500 organizations.
Marketing Activities
• Virgin Freeway frequent travelers program.
• Run in partnership in order to compete with BA.
• Unveil a promotional campaign targeted at BA
passengers who had never tried Virgin.
• The Virgin Atlantic brand is franchised.
• Gain publicity for the airline’s products and services
and to show how much better Virgin is than the
competitors.
15
Weakness
• Marketing Strategy
-“Wild” image is not good for all customers.
-Low trial rate.
-Small networks.
• Service and Organizational Capabilities
-For how long can staff be kept motivated?
• Dependence on Branson
-Value of Virgin Atlantic Airways without Branson?
-Real value of Virgin brand?
17
Discussions
Crazy OR SMART ?
18
