Research Paper on Virgin Atlantic: Pioneering Quality Air Travel for the Middle-Class Economy

Introduction

Upon its formation, the founder of the Virgin Atlantic aspired to create an airline company that would cater to the needs of the middle-class economy that aspired to fly and enjoy some of the services of the first-class economy. In an age where airlines prioritized ferrying passengers from one point to the other as opposed to the quality of services, the Virgin Atlantic pioneered a customer-centric approach to the business, which placed the customer at the centre of their operations and ensured they offered high-quality services for their customers. The headquarters of the company is located near Gatwick airport in Crawley. Richard Branson has a 51 per cent stake in the company whereas Singapore Airlines retains the remaining 49 per cent. Therefore, the Virgin Atlantic airlines have come a long way in breaking the barriers that defined the aviation business and has set various precedents that have cemented its place as an industry leader in the European and the global market at large.

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Impact and Influence of Macro-environment on Virgin Atlantic

The Virgin Atlantic Company operates in a competitive environment that includes large multinationals backed by entire countries and financed by entire national budgets. The company has to work to gain an edge over many other companies that compete to serve as many customers from around the world as they can (Dozic, 2019). The entry of new players means a decline in the market share of the Virgin Atlantic Company and hence they have to engage other marketing strategies to earn more customers and maintain their already existing market share.

In spite the smaller size of the Virgin Atlantic Company compared to its competitors, the company strives to give them a fair competition as well as a run for their money (Gisarioa, Kazarian, Martina, & Mehrpouyad, 2019). The primary competitors of the company include Air France, AMR Corp, and British Airways. Although these companies are backed by major financial institutions and even governments, the Virgin Atlantic offers them formidable competition owing to the unique product placement and offerings. The company operates under the mission of embracing the human spirit and letting it fly. The unique selling proposition for the company is founded on being a British airline intent on offering luxury at affordable costs. It prides in becoming the first European carrier with the option of Wi-Fi in all of its planes and travel destinations. Such attention to details is the reason why the company has managed to soar.

Due to their establishment and financial backing, competitors to the airline serve up to 150 destinations even as the Virgin Atlantic serves 35. Strategic actions by the airline could immensely and directly threaten the market in which the other airlines operate. In this age of technology and social media communication, the interaction between the company and the consumers is essential in driving sales and determining the ultimate success of the corporation. Similar to the Virgin Atlantic, the other airlines have similar abilities with regards to the level of interactivity of their websites. Companies benefit from developing web pages which inform their customers about new updates, packages and products and informs them about prices and services that differ from those offered by their competitors.

The primary suppliers of aircraft for the Virgin Atlantic airlines are Airbus and Boeing. These are the largest manufacturers of aircraft in the world and also supply the competitors to the Virgin Atlantic company (Dretloh Team, 2018). Boeing and Airbus are the best manufacturers of aircraft for long distances and supply most of the airlines in the world. The companies sign contracts with the largest distributor of aeroplane parts in the world, Satair, and this agreement covers the management of integrated materials. The company uses Boeing 747, as well as Airbus 340 planes, have more of the Airbus A380 on course to be purchased.

Although the clientele of the Virgin Atlantic airline company differs from flight to flight, many of the passengers comprise business people with the affinity for travelling in first class. Nevertheless, the company operates three primary classes within its flight's schedules and these include upper class, premium economy and economy class (Lucky, 2014). Majority of the passengers in the upper class comprise of males between the ages of 35 and 45 years. The premium class comprises people travelling for various purposes including business and pleasure. The section mainly comprises males of 40 years (Lucky, 2014). The economy class is the most flexible among the three classes and incorporates a wider range of personalities. The increased versatility of the Virgin Atlantic airlines compartments makes it a favourite for travellers interested in connecting with the world without the intent of spending too much money for air travels and long journeys.

Internal Environment and Capabilities

The Virgin Atlantic Airline is a dynamic company that has various competitive advantages. It is primarily concentrated in low-cost air travels. The success of the company depends on various factors in the aviation industry over which the company has little control (Spero, 2018). Some of the essential factors that influence the success of the company include volatility of the market prices, the cost of fuel, economic crises within various markets and regulations of safety within the different jurisdictions in which the airline operates and natural disasters (Schimmel, 2014).

PESTEL Analysis

Before analysing the business strategy for the Virgin Atlantic Airlines, it is essential to examine other factors that influence the business environment. These factors include the political, economic, social, technological, environmental and legal factors. All these factors together constitute the PESTEL analysis for the company.

Political Factors

Political factors that affect the Virgin Atlantic airlines underpin the regulations, rules and policies that affect the operation of the airline company. Since it operates across multiple nations and political jurisdictions, the company has to adhere to various rules and regulations that govern aviation business in these various destinations. Various trade restrictions, regulation policies, and taxation policies affect the functioning of the Virgin Atlantic company. The company is primarily stationed and headquartered in the UK and in London's Heathrow Airport. However, it becomes challenging for the company to operate when it comes to venturing into other international markets like the US or other Asian nations. Most of the political challenges accrue from issues that deal with licensing and bureaucracy. Authorities back home may be cooperative and easy to navigate. However, countries such as the US and Australia presents serious challenges in issues that deal with compliance. Increased control of the business environment is also another serious issue that presents various challenges to the organization.

Economic Factors

Various economic factors affect the business of the Virgin Atlantic airlines and influence its profits and general working relations. Some of these factors include empty seats in long-distance journeys, high cost of fuel and economic recession. The global economic market, in general, determines the amount of profit the company makes from its international destinations. Moreover, since the company is primarily based in the UK and hence transacts using the Euro, the behaviour of the currency greatly affects the level of profit they make. Since the company operates on a global scale, there are various factors that come into play in its operational policy and these include taxes, security legislation and H and S regulations. For instance the Value Added Tax (VAT) increase which affects the amount of revenue they remit to the authorities.

Social Factors

Like many other international conglomerates, the Virgin Atlantic airlines serve an international clientele which depends on their services to journey across continents. This means they have to understand the social-cultural contexts of their customers and this applies to things like the meals they serve on-board their planes. The Virgin Atlantic primarily serves the local cuisines for the destinations to which they go. Therefore, people unaccustomed to such cuisine may find it hard to adjust and this may make them uncomfortable when travelling. While serving muslin nations, the meal choices have to be restricted to non-pork menus because people from these nations do not take pork. Cultural as well as social values encompass all manner of perspectives in terms of the comprehension of the cultural values of the destination, the key arrangements that may need to be taken into account and the special holidays in their destinations.

Environmental Factors

Airline companies around the globe contribute to a great percentage of the overall carbon emissions that occur in the planet leading to climate change and global warming. The aviation industry has tremendous effects on the environment because the aircraft emit plenty of heat, noise, and gas particles which lead to the formation of global warming effects and climate change. Aeroplanes emit high percentages of carbon dioxide and water vapour black carbon and lead particles. Despite the increase and improvements in aviation technologies around the globe, there is no end in sight for the total reduction of the emission of harmful gas particles into the air. The Virgin Atlantic airlines face possible taxation in the future owing to the on-going debate that aims to make air travel companies to take responsibility for their contribution to the global effects of greenhouse gases.

Legal Factors

The European Union has a great impact on the business of the Virgin Atlantic airlines because it has allowed for increased competition in the market. An increase in competition means the upholding of the laws of aviation. The European Union maintains a cap on the possible prices the airlines operating in the region can maintain and this is meant to protect the customers to these airlines from exorbitant prices. Tourism makes for a large scope in the European Union and the governments in the region are intent on promoting it hence their keen interest in the air travel fares to and from the region. The Virgin Atlantic Airlines, as well as other British airlines, have no choice but to adhere to the rules set out by the EU for them to keep benefiting from operations in the region.

During the early years in the aviation industry, feelings of the customer were not an issue of principal concern for the airlines. Companies focused on carrying their passengers to their various destinations and hoped to create a positive reputation through excellent services. With the launch of the Virgin Atlantic airlines, however, the industry experienced a revolution in which companies stressed listening to the sentiments of their customers and seeking their opinions.

The political atmosphere across jurisdictions is also an essential factor because it can determine whether or not the company will be allowed to fly to certain regions. Intense competition in the aviation industry means the Virgin airline company has to differentiate and create unique product offerings to attract a very specific customer niche (Gregory, 2010). The Virgin airline has excelled in the customization of travel products for its customers and this is an area that has kept it at the edge of the competition.

Whereas the primary focus of the Virgin Atlantic Airlines has been creating differences in each of their services they have also been intent on driving effectiveness and efficiency in the industry. The Company is the seventh-largest airline of its kind in the world and...