Virgin Airlines -- Financial and Strategic Assessment
Financial Assessment
Virgin America has quickly established itself as one of the premier airlines operating throughout North America, generating $760M in Operating Revenues as of the close of its latest fiscal period reporting a Net Loss of $19M and operating margin of -1.6%. As Virgin competes in a very price-driven and capital-intensive industry, their latest financial results the exceptionally high pressure on new entrants into commercial aviation. Their latest financial results are shown in Appendix A: Virgin America Consolidated Statement of Operations and Appendix B: Comparative Operating Statistics, both obtained from the company's website.
Analyzing their financial condition indicates just how challenging the launch and successful operation of an airline is. Their fuel costs increased 66.9% for the nine months between September 30, 2010 to September 30, 20112, and Aircraft Maintenance increased 51.5% in the same period. Both of these figures are shown in Appendix A. To reduce the costs of operations many commercial aircraft service providers also rent jets to mitigate the costs of purchasing them. The use of value-based and time-based pricing optimization pioneered by Virgin in the Australian and Asian markets has given the company an advantage in managing its cost of capital requirements as well (De Roos, Mills, Whelan, 2010).
Virgin is expanding aggressively into new markets and this is costing the company a significant amount of their cash as well. In the nine months from September 10, 2010 to September 30, 2011, Virgin spent 26.4% more on landing fees and other rents. The total invested in the first nine months of 20-11 was $63M, a significant amount by any standard of commercial aviation (Hazledine, 2011). This also created the need for a high spending level in Guest Services, which jumped by 30% in the same time period, reaching $31M. Virgin...
Virgin Airlines Marketing Strategy Virgin Airlines has long led the way in the airline industry for its embrace of a marketing strategy that targets the middle and even low-income flyer. However, rather than position itself as an airline with an eye upon marketing itself as merely a down or middle market airline, providing peanuts to its customers rather than pheasant under glass, it instead has attempted to provide quality, almost luxurious
On the price dimension of the marketing mix, the company continues to compete with low-end and state-funded carriers, who arguably have a competitive advantage due to their funding source. Nonetheless, 1 Time is fighting the good fight of customer service and delivering value at their price points (Mantshantsha, 2007). Of all aspects of the company's marketing mix, this one is struggling the most as it strives to capture more of the
4). The return on this modest investment was impressive: "We saw that mobile is five-to-ten times more effective than online advertising" (Butcher, 2009, para. 4). The contest also increased visitors to the company's WAP site (Butcher, 2009). 7. Description of Location The same location will be used for the envisioned marketing campaign as the "Back for a while" initiative which targeted Hispanic males and females ranging in age from 27 to 45
Strategic Analysis of Virgin Australia Airlines: Following its merger with Pacific Blue, Virgin Australia that was previously known as V Australia rebranded to Virgin Australia Airlines. In addition to being the newest international airline owned by Richard Branson, Virgin Australia is headquartered in Sydney Airport. The airline company has developed an airline experience that is based on a simple idea in which flying is considered to something great. Virgin Australia Airline
Australia Airline Management Case Study Report: Airlines This paper provides a comparative study of the goals, management style, and labor relations policies of three Australian airlines: Qantas, Virgin Blue, and Air Australia Airways. It examines the recent history of these major airlines, with a specific focus on the labor relations difficulties of Qantas, Virgin Blue's attempt to create a more innovative model of customer service as a budget airline, and Air Australia Airway's
Jetstar also now gives customers with more expensive tickets priority boarding, although it plans to retain unallocated seating for reasons of efficiency. The airline buys the points from its parent but strategically recovers costs by prompting people to buy more expensive tickets and attracting back customers (Creedy, 2005). The carrier's frequent-flyer scheme has produced a revenue gain that offset its cost, such as big business routes, an immense amount
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