Virgin Atlantic

Virgin Atlantic

Market

The airline industry was affected more than most by the tragic events of September 11th 2001. There was an immediate and significant reduction in passenger demand, particularly across the North Atlantic, and a number of airlines became bankrupt. 9/11 was quickly followed by further challenges of SARS and the effects of the Gulf War. The industry is slowly rebuilding passenger confidence and recent traffic figures show signs of a recovery from 9/11. However, it is clear that in order to survive and compete in this challenging environment, it is vital for airline companies to adapt and evolve, focusing on capturing the market with an ever-improving range of services. Airlines with strong brand leadership, like Virgin Atlantic, should be most likely to emerge from the challenge strengthened.

Achievements

The brand's achievements have been recognised by a number of prestigious award schemes. In recent years the airline has won a huge number of well respected awards including the Best Long Haul Business Airline at the Business Travel Awards and FX and Design Week awards for the Upper Class Suite. In 2003, Virgin Atlantic won the Business Superbrands Awards for 'the brand that most values its employees'. In 2002, the airline won an array of awards including Best Business airline at Condй Nast Traveller Awards; The Guardian and Observer Awards; Best Transatlantic Airline at the Travel Weekly Awards and in 2001 Virgin Atlantic won OAG Airline of the Year. In addition, the brand has been consistently voted as a Superbrand and in 2001 was given Cool BrandLeader status by the Superbrands organisation.

Despite tough trading conditions in 2003 Virgin Atlantic achieved a turnover of Ј1.4 billion and carried almost four million passengers.

History

In the early 1980s, transportation - rather than customer care - appeared to be the top priority of the airline industry. When Virgin Atlantic burst on to the scene offering not only better service and lower costs for passengers but a commitment to put the customer first, the effects were radical.

The company was set up in 1984 when an Anglo-US lawyer called Randolph Fields approached Richard Branson - the young and unorthodox chairman of the Virgin Group -with an idea for a new airline that would fly between the UK and the US. Better known at the time as the leading light in the world of pop and rock music, Branson was enthusiastic about the opportunity to diversify. His characteristic energy and enthusiasm meant that within three months the airline began to lease its planes and June 22nd 1984 marked Virgin's inaugural flight from London to Newark.

From those early days the airline has gone from strength to strength. Now based at both London's Gatwick and Heathrow airports, it operates longhaul services from Heathrow to New York (Newark and JFK), Los Angeles, Boston, San Francisco,Washington, Miami, Tokyo, Hong Kong, Johannesburg, Cape Town, Shanghai, Lagos and Delhi. Virgin also operates services from Gatwick to Orlando, Barbados, St Lucia, Antigua, Las Vegas, Grenada, Tobago and Port Harcourt. Virgin Atlantic has also introduced a service from Manchester airport to Orlando. In January 2003, the airline began twice-weekly services to Port Harcourt in Nigeria and in May 2003 the airline commenced services between Gatwick and Tobago and Grenada bringing its total number of destinations to 22.

Plans have also been announced for new routes between London Heathrow and Sydney to start at the end of 2004 and London Gatwick and Cuba and The Bahamas to commence in summer 2005. On December 20th 1999 Richard Branson signed an agreement to sell a 49% stake of Virgin Atlantic to Singapore Airlines to form a global partnership. The cost of the transaction to Singapore Airlines was Ј600.25 million, which included a capital injection of Ј49 million and values Virgin Atlantic at a minimum of Ј1.225 billion. The deal was finalised in early 2000.

Virgin Atlantic has pioneered a range of innovations setting new standards of service, which its competitors have subsequently sought to follow. Virgin Atlantic has introduced a string of firsts including individual seat-back televisions for all economy passengers and the introduction of automatic defibrillators. Despite Virgin Atlantic's growth the service still remains customer driven with an emphasis on value for money, quality, fun and innovation.

Product

Virgin Atlantic's Upper Class has changed the face of business travel by offering limousine pick-up and Drive-Thru check-in. Virgin Atlantic also has Clubhouses, Virgin lounges for Upper Class passengers, at many of its destinations. The Virgin Clubhouses are deliberately designed to challenge the conventions of the airline industry and to create a different travelling environment. In 2003 Virgin Atlantic launched its revolutionary Upper Class Suite product. The product consists of a reclining leather seat for take off, a place to sit and eat a proper meal opposite your partner, the longest fully flat bed in the world with a proper mattress for sleeping on, a private on-board bar to drink at with your friends, a private massage room and four limousines per return trip - all at a price thousands of pounds less than other airlines' First Class.

By charging the same as other airlines' business class for this first class product, Virgin Atlantic's new Upper Class Suite is not only attracting former Concorde passengers but BA's and other airlines' first and business class passengers as well. The Upper Class Suite has already proved to be a massive success winning the airline all-important market share along with an impressive array of prestigious awards. The 'Freedom' meal service was introduced in 1999 which means passengers can eat 'what they want, when they want'. Virgin Atlantic's unique in-flight beauty therapy service, which celebrated its tenth anniversary in 2002, has a dedicated area on-board the plane.

Virgin Atlantic also opened its first arrivals lounge called Revivals at Heathrow airport. Revivals is designed to provide everything a passenger could need to awaken, revitalise and prepare for their day ahead after a longhaul flight. Virgin Atlantic also operates 'flyingclub', one of the most generous frequent flyer programmes available. flyingclub was re-launched at the end of 1999. As well as restructured membership levels, flyingclub has even more partners with the introduction of more airlines and hotels than ever before.

Premium Economy was first introduced in 1992. It is a service aimed at the cost conscious