Submitted: 25 August 2010

TASMAC LONDON SCHOOL OF BUSINESS

Professor: Mr. Gregory Desilva

Group Members

− Chakradhari Pratapagiri

− Ezika John Chieme

− Kasun Prabasara

− Sonam Rinzin

− Rachana Lamichhane

INTERNATIONAL MARKETING Entry of Virgin Atlantic Airways into INDIA

1

Table of Contents

Virgin Atlantic operations in various countries .............................................................................. 3

Virgin Atlantic Entry In India ......................................................................................................... 5

Politico-Legal Problems For Virgin Atlantic In India .................................................................... 6

Figure 2 Pestel Forces on virgin Atlantic when ente red INDIA .................................................... 6

Virgin Atlantic‘s Competitors In Indian Market ............................................................................ 7

Economic And Cultural Problems Faced By Virgin Atlantic In India ........................................... 8

Cross-Cultural Impact.............................................................................................................. 8

Impact of Economic Conditions ................................................................................................. 8

Consumption Behavior of Indian Market V/s UK Market ........................................................... 10

Virgin Atlantic’s Adaptation to Indian requirements ................................................................... 11

Virgin Atlantic Fares for Indian Market ....................................................................................... 13

Virgin Atlantic’s Promotion Campaigns for Indian Market ......................................................... 14

Distribution and Payment Systems of Virgin Atlantic in India .................................................... 15

Analysis And Recommendations By Ezika John Chieme (9100031) .......................................... 16

Analysis Section Of Kasun Prabasara (9100155) ......................................................................... 18

Analysis by Rachana (9100140) ................................................................................................... 20

Analysis and Recommendation by Sonam Rinzin ........................................................................ 23

Analysis by Chakradhari Pratapagiri : 9100088 .......................................................................... 26

References ..................................................................................................................................... 30

2

Table of Figures

Figure 1: Fleet of Virgin Atlantic compiled by Wikipedia via Main source of

CAA……………………………………………………………………………………………………………3

Figure 2 Pestel Forces on virgin Atlantic when ente red INDIA ...............................................5

3

Virgin Atlantic operations in various countries

Virgin Atlantic

Virgin which is synonymous with Richard Branson, who by 1984 earned reputation of a

visionary headed into aviation sector and within 16 years of his successful regime in

aviation industry starting its route from Great Britian to North America, he expanded

across the globe through various international streams but still a British Company, by

year 2000 he positioned Virgin Atlantic Airways as one of the major ventures of Virgin

Group with achievements like UK’s second ranked long haul airline’s, making its way

through countries like Australia, Caribbean, Asia and Africa operating chiefly from USA.

By Year 2000 Virgin Atlantic had an international establishment with London (UK) to

be its head office and alike a typical international marketing company, it had its

administrative centers spread across various countries including Caribbean Islands,

Africa, Japan, China, INDIA and USA being its host country. The fleet of Virgin Atlantic

has a chart as given below

Aircraft Total Orders Options

Passengers (Upper/Premium

Economy/Economy) Notes

Airbus A330-300

0 10 0 TBA Entry into service: 2011

Airbus A340-300

6 0 0 240 (34/35/171)

1 Not in use

Exit from

service: 2013

4

Airbus A340-600

19 0 0 308 (45/38/225) 2 stored

Airbus A380-800

0 6 6 TBA Entry into service: 2013

Boeing 747-400

12 0 0 344 (54/62/228) 451 (14/58/379) 452 (14/58/380)

Boeing 787-9

0 15 8 TBA Entry into service: 2013

Total 37 31 14

Figure 1: Fleet of Virgin Atlantic compiled by Wikipedia via Main source of CAA

Richard sold 49% stake in its hay days to Singapore Airlines on a profit sharing model with a

strategy of international market penetration at a decent 1.225 Billion pounds (Virgin History)

with a reputed player like Singapore Airlines, a reputed south Asian airlines during late 1999

(Virgin Atlantic) and early 2000 was a turning point on strategic international expansion which

will be our area of study in this assignment. VA’s entry into international arena; by August 2000

as ‘Virgin Blue’ in Australia where it also introduced a premium brand airline called Virgin

Australia in 2009. In September, 2004, Virgin Nigeria came into existence by providing good air

services within Nigeria. West Africa as well as North America and Europe were all connected

with Virgin Atlantic. By August 2007 Virgin started hoisting its flag in most of America’s

regions. In May 2010, virgin started its first operation of Virgin Atlantic services in Ghana.

5

Virgin Atlantic Entry In India The factors that drove Virgin Atlantic to spread its aviation business into India were mainly

market attractiveness apart from profit motivation. The air traffic from India to London was

observed quite early by Richard Branson, the over whelming progress and young globalized

country with not so rigid government policies was buttering on ice. As proven not to be wrong

the long haul journeys between Delhi to London of twice a week eventually went up by thrice a

day. Virgin Atlantic entered into a joint venture of 5 years with Air India on December 1999

through a code- sharing arrangement of sharing A-I flight quotas. Virgin Atlantic had its major

competitor in British airways for Indian Market. (Grant 2000)

6

Politico-Legal Problems For Virgin Atlantic In India Virgin Atlantic did have major obstacles in the form of PESTEL factors, with Politico-Legal

dominating the rest, Richard went on with Air India’s code-sharing agreement to enter the

market arena with the support of strongly existing airways AIRINDIA, however the agreement

restricted Virgin Atlantic from expanding to other bases other than Delhi individually, which

later hampered Virgin Atlantic Strategic movements into the sub-continent, As Air-India and

British Airways had a bilateral pact signed for 16 return journeys. This agreement between

British Airways and Air-India restricted Virgin Atlantic to fly only 2 flights from India. Virgin

Atlantic lobbied although at a late stage to procure a license to initiate its spread from Bombay as

a second base other than Delhi (Grant 2000).

Figure 2 Pestel Forces on virgin Atlantic when ente red INDIA

AIR INDIA Lobbying with Indian Government, British Airways strong relations with Indian Government

A Mix of Traditional Indian and Western Customers

7

Virgin Atlantic‘s Competitors In Indian Market Virgin Atlantic when launched its project in july 2000, it envisioned competition but on level

platforms however with changing times Virgin Atlantic got a last pie when British Airways its

direct competitor was sanctioned by indian government 3 more journeys to london, while Virgin

Atlantic had to confine to just 2 which was not in competitive spirit, with a healthy and attacking

spirit Virgin Atlantic is still successfully running over a decade now, its competitors are still

running behind on line with Virgin Atlantic like Air Sahara, and Jet Airways. (India Infoline

Limited, 2010).

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Economic And Cultural Problems Faced By Virgin Atlantic In India

Cross-Cultural Impact

Virgin Atlantic is equally stressed with cultural factors that differed drastically from its western

approach, right through variation in food recipes to pricing choices, life styles of people more

often than not is a reflection of economic profiles of customers which differed between USA,

UK, Japan and INDIA, although INDIA was an emerging or developing country could not be on

par with developed countries in expense patterns, Virgin Atlantic at a cost learnt to understand

the Indian Customers habits and attitudes, opinions and emotions. Indian Consumers are

culturally too diverse although with in the same country, expectations and perceptions vary in

accordance to their origins in the sub-continent, this was quite a challenge for Virgin Atlantic

which over a period of time adapted to its local customer expectations and delivered services

nearing their perceptions on Virgin Atlantic. Indian Customers grow extremely concerned on

their Vegetarian and Non vegetarian food habits unlike in some of the nations. Similarly Virgin

Atlantic had to take into consideration each and every subtle aspect that relates to culture and sub

cultures of India for its long-standing relationship ambition with the country. They have a varied

music taste too.

Impact of Economic Conditions India is a developing country with an estimated 80% middle class families at varied levels of

upper, medium and lower. This presents a not so positive picture to any enterpreneur but not to

Richard, as he anticipated its growth quite early and designed the pricing policies in accordance

to consumer mindsets, which is more economic seeking population than luxury lifestyles that

come at a huge expense, to fit in favor of indian consumers Virgin Atlantic introduced a new

premium economy class layer between business and economic classes, indian flights of Virgin

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Atlantic have a large quota alloted to Economic classes then Premium Economic followed by

Business class with a meagre 2 to 5% of seating arrangement.

10

Consumption Behavior of Indian Market V/s UK Market

Since It gives new and fantastic service comparing to Indian market had before (e.g.: Air India),

Virgin Atlantic kept on grabbing market share of frequent flyers between India and UK. They

positioned itself as a unique aviation provider in consumers mind in India. Yearly, the growing

flow of traffic is nearing about 1.5 Million passengers between India and UK. As there was lack

of direct flights, passengers used to travel using transit flights. Virgin Atlantic Airways is

Britain’s second largest long haul airline and currently operates 7 flights between India and the

UK, with daily services to London from Delhi that grab 20% market share of those passengers.

By May 2009, heat of recessionary period affected the Virgin Atlantic’s services on Mumbai –

London. Even though they had to stop the flights, they have made code sharing agreements with

Jet Airways to keep the customers with them, that is customers can fly from Mumbai to London

on Jet Airways and from there they can move onto Virgin Atlantic for their further journey to

New York, San Francisco and other places. According to Michael Burke, General Manager –

India Virgin Atlantic, they are market leader on Delhi – London route and are outstanding in

providing the best value for the money and customer service. (India Info line Limited, 2010).

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Virgin Atlantic’s Adaptation to Indian requirements

Since its launch in the year 1984, Virgin Atlantic has enjoyed huge popularity, winning top

business, consumer and trade awards from around the world. Differentiation of their product by

taking the customers’ expectations one step further through communication with their customers

and service innovation is the specialty of Virgin Atlantic. Drive-thru check in and in-flight

beauty therapy are some unique offerings made by Virgin Atlantic.

India is the country known for its diversified cultures all around the nation. So before launching

its services there, Virgin Atlantic had to take into account Indian traditions and customs. Indians

have the traditions of treating guests with utmost respect, they have varied music taste and the

most important thing was the food. Beef is strongly prohibited in Indian culture. Thus, keeping

these things into mind, Virgin Atlantic had made changes in their standard menus by serving

their passengers with Indian food. India is a nation with a growing population with 25% (2007

est.) of population still below the poverty line. That means most of the Indian people who opt to

travel would prefer economic class.

Different people have different needs and tastes and that needs and tastes are greatly influenced

by their country’s culture and traditions. Thus, In order to survive in that market (where India-

UK is supposed to be one of the busiest route), Virgin Atlantic had to make some changes to

meet Indian Customers’ needs. So Virgin Atlantic provided services to Indian Customers with a

mix of traditional Indian standards, on flight entertainment, music and games and many more

onboard amenities. Virgin Atlantic offers three classes in its flights initially but to make Indian

passengers feel pampered they introduced a new class named “Upper Class Suite”. Moreover,

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local Indian staffs were hired so to overcome the cultural conflicts alike language convenience.

Arrival timing at Heathrow was 21:00 hours which was later changed to 18:00 hours for the

convenience of their passengers in commuting to destinations without having to look for a costly

temporary accomodation nearby. Most importantly, Virgin Atlantic had to make serious changes

in its food menus because of raising concerns from passengers like Martin (Mr. Martin Smith,

2010)

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Virgin Atlantic Fares for Indian Market Virgin Atlantic positioned itself on a value for money grounding rather than price leadership

although the market was intensely growing competitve and the indian customers economic

choice of flights was acting against Virgin Atlantic‘s pricing philosophy, in order to accomodate

the prices virgin atlantic offered bundled packages and early registration offers along with its

famous mile club memberships that adds points adding to it there were no extra charges for any

auxillary services like picking up from origin, food and luggage charges unlike traditional budget

airlines. At one point of time Virgin Atlantic had to make its way out on bombay to london long

haul journeys for quite some time that it cited to be on pricing grounds which were not

generating revenue to meet its running expenditure. However later it resumed with the

intervention of Air India supported by aviation ministry of indian government. (Telegraph,

December 2008), currently Virgin Atlantic charges about 500 GBP for a return journey from

delhi to london when booked a month before, which is quite reasonable when compared to other

airways. (VirginAtlantic,2010)

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Virgin Atlantic’s Promotion Campaigns for Indian Market Virgin Atlantic is not known for it to be trumpeting with massive promotional campaigns but it

believes in a quality speaks for itself policy with a long-standing relationship vision with its

customers that being is its fundamentals behind promotions, but its messages have been very

catchy, fun but marketwise different like “Our Crew talk back” to convey that customer service

is different as when compared with orthodox Air India, “Ours is longer” for a long journy

together in a single go, “We do it thrice a day” – frequency of flights between delhi and london

as then it was the only airways with such a frequency, Virgin Atlantic stressed its medium of

advertising on print media. Different to its approach of television promotions in UK, they opted

for print media advert annually in India. Low cost but effective channels of reaching customers

like Direct mails, FM radio campaigns, SMS Marketing, Tele-Sales, selective product

placements are Virgin Atlantic’s usual marketing activities. Different to note with Virgin

Atlantic is the owner and CEO Richard Branson himself projecting freely in advertisements quite

casually and promoting the brand via his persona reflection of being fun loving but professional,

committed individual, etc. Unlike brands that spend on celebrities. Virgin Atlantic did modify its

strategy of promotions and advertisements narrowly and subtly according to the Indian consumer

market, nevertheless the brand ambassador remained himself both in UK and Indian

Advertisements.

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Distribution and Payment Systems of Virgin Atlantic in India

As the product is intangible, the distribution channels doesn’t involve physical transportation of

goods like in case of any tangible products, Virgin Atlantic Airways running its operations from

Delhi and Mumbai as of now although it has plans of expanding it to other metropolitan cities by

2014 provides customers with online booking facility . ‘Authorized Agents’ of Virgin Atlantic

has networking across all major cities in India majorly with Delhi and Mumbai as their head

offices, Virgin Atlantic Airwaays (VG), Travel Planners (P) Ltd. A-244, etc. are some of them

and passengers as well book through sub agents of such authorized agents registered with

financial services authority of UK like ebookers.com, makemytrip.com, etc. -

http://www.ebookers.com/flights/India/Goa/ (22 August 2010). While Virgin Atlantic’s ‘General

Sales Agents’ takes care of cargo apart from passenger bookings. Some of the major generals

Sales Agents for Virgin Atlantic are ‘INTERGLOBE’, JBW Aviation Pvt. Ltd, Group Concorde,

Ajanta Travels, Great India Aviation Services, Global Aviation Services, etc.

http://www.azfreight.com/azworld/aw17504.cfm, Virgin Atlantic pays around 7% towards agent

commissions to its ‘Authorized Agents’. Also on availability a passenger may buy a ticket from

the counter at Mumbai or Delhi just before boarding directly through Virgin Atlantic counters.

Almost all commonly available payment channels are open for a passenger to buy his tickets like

credit cards and debit cards, cheque payments to agents and Cash purchases. Unlike earlier there

are only online tickets issued to passengers with journey and passenger information.

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Analysis And Recommendations By Ezika John Chieme (9100031)

Virgin Atlantic is a renowned company established by Richard Branson and has a lot of

intangible assets in its portfolio. The whole Virgin Businesses indicate Richard Branson image.

Before Virgin Atlantic entered into Indian market they should have taking into account that they

will be competing with the strong competitor in the market, which was British Airways. British

Airways is a powerful player in international carriers, in relation to other competitors. Virgin

Atlantic did not have the great influence that British Airways had in Indian government and this

affected their businesses in India. Recently, they are overcoming this problem and becoming

steady in the busiest aviation route. When Virgin Atlantic entered into Delhi market they had so

many problems in starting their third flight in Delhi-London route, because they did not take into

consideration the business behaviour of Indian companies when signing the Code-Sharing

Agreement with Air India and Bilateral Agreement between the two countries. In 2005, Virgin

Atlantic had great negotiations and fought with the Indian Aviation Authorities for their business

expansions. When they obtained this right to expand from the authority, they started their

business expansions by establishing Mumbai-London route in that same year. But, for four years

now their businesses had not being doing so well in India which they said it was caused by

economic depression that adversely affected their businesses. Virgin Atlantic made use of

outdated aircrafts when they originally entered India, which was not suitable for their customers.

This made most of their customers to be switching to British Airways, which was their

immediate competitor.

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Although, by the end of this year Virgin Atlantic is completing their ten years in Indian

subcontinent, but they are still finding it very difficult to get used to Indian culture. Most of the

times Virgin Atlantic delivered bad services to their Indian customers, which their customers

many times neglect it. According to open letter written by the founder and CEO of “Justmeans”

Mr Martin Smith (2010), he complained badly about the food served in the Virgin Atlantic

aircraft during a journey. He said that Virgin Atlantic is promising their customers to be the

world’s most sustainable airline, but when it relates to provision of good food they are

disappointing their Indian customers and which is not morally right.

When Virgin Atlantic initially entered into Indian market they did not take their Indian

customers’ service delivery expectations very serious and recently they are becoming aware of

its bad impact on their business. Virgin Atlantic failed to consider their domestic competitors

such as Kingfisher and Jet Airways, which created a lot of problems for them in Indian market.

Virgin Atlantic was not giving their yearly annual report to their Indian customers that will

enable them to know more about the company’s overall services delivery and financial

performance. They planned themselves to possess different rock style and pop of culture, but

they are still not considered as having good corporate goodwill sometimes, which they suppose

to work on properly.

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Analysis Section Of Kasun Prabasara (9100155)

Dominating his enduring value to his unbeatable businesses, Richard Branson, the 48-year- old

chairman of the London-based Virgin Group, has parlayed a for conventional business wisdom

into a $3.5 billion international conglomerate and one of the world's most powerful and

recognizable brands. The goal of Virgin Atlantic was to “provide all classes of travelers with the

highest quality of travel at the lowest cost.” After teaser advertising entitled “WAIT FOR THE

ENGLISH VIRGIN…,” Virgin Atlantic launched their introductory flight from London to New

York on June 22, 1984. There are Upper Class, Premium Economy, and Economy, which are the

main positions of products. Each class is differentiated by the benefits associated with the

products. After entering to the aviation businesses, virgin could introduce new technological

ideas like personal music, movies, games, special J-class with lounges etc… After signing the

Code-Sharing Agreement with Singapore an airline which is a minority shareholder at 49%,

virgin could increase their destinations expand services by getting experience from established

airliner. They build their image as a new, innovative, “RED Hot”, has superb customer service

etc…those positioning characters they used to entering to Indian market.

India was the virgin’s first south Asian experience that they had to face a big challenge.

For the first instant they had to compete with well established and experienced giants such as

British Airways and Air India. Although virgin had competitive advantage over Air India with

new technology, innovations and attractiveness they couldn’t understand the Indian culture as

Indian local air lines such as Jet. For compete with BA, they could use innovations to attract

customers for India – UK route, but at that time BA had great influence from the Indian

government that virgin didn’t have and this affected their businesses in India. In 2005 virgin had

to face number of problems regarding expansion of their flight frequent and they had to negotiate

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with Indian Aviation Authorities and Air India to make some bilateral agreements. From the

result of virgin could initialise the Mumbai – UK route.

Even though virgin celebrating their 10th anniversary in 2010 for India – UK route, they are still

finding problems for their business. Main reasons for this are, didn’t analysis the Indian culture

and customers in deep. For an example they started India – UK route with old Boeing 707

aircrafts that Indian didn’t prefer (Indian didn’t want to treat them as 3rd world customers), they

had more trouble with catering as Indian customers like more spicy foods than they provided.

Other reason is virgin totally depends on Branson’s image and his innovative ideas that can be a

reasonable for UK. But in India Branson is not a very popular as in UK, so that didn’t apply for

Indian Market. For marketing aspect virgin still can’t position its service clearly in customer’s

mind, like whether it is a budget airliner or a premium quality airliner. Though they tried to

differentiate by innovations mentioned above, it was not enough for grab the market share from

excising competitors. By May 2009, heat of recessionary period affected the Virgin Atlantic’s

services on Mumbai –London and they had to stop the service. This kind of highly economic

vulnerability, High break-even point and Lack of economies of scope are still creating problems

for virgin.

What virgin can do for win the Indian customers? First they have to transform core values into

unambiguous positioning strategy by make more innovations and use more marketing

communications with Hindi language as well. Apart from those, they have to use new strategic

way, like they have to show that they have local values such as spicy food. Finally they can use

strategic alliances with Indian government to expand the width of their business.

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Analysis by Rachana (9100140)

Richard Branson, the founder and the President of Virgin Atlantic is himself a brand ambassador

by doing extensive publicity of his image associated with the brand Virgin Atlantic. This might

prove to be good to some extent however, Branson’s face appearing everywhere in the in-flying

magazine to IFE (In-flight-entertainment), can be annoying to passengers.

Advertisement plays an important role in selling products and services. Bollywood is famous all

around the world because of its excessive publicity. In spite of this, the Virgin Atlantic Airlines

has very few adverts. Thus, more expending can be done on advertisements and publicities of

Virgin Atlantic using some famous sportspersons or celebrities or singers rather than Branson all

the time and everywhere. Because of the influence of globalization, India is experiencing a huge

increase in the number of passengers, travelling to and from the country via air. Thus this share

of passengers can be grabbed by Virgin Atlantic (one with reasonable price) with some efforts

made on improvement on the quality of food and services offered.

British Airways is the major competitor of Virgin Atlantic from the initial period. British

Airways has this very established and strong brand image. British Airways is quite traditional

whereas Virgin Atlantic is ‘modern’. If one has to choose comfort, British Airways is the better

option than Virgin Atlantic according to one of the customers Captainks, 2006. Since long haul

travelling is all about safety and comfort, Virgin Atlantic should not compromise on the seat

comforts be it in economic class.

British Airways is renowned for its professional service; good food etc. Whereas Virgin

Atlantic’s offering is more of the differentiated product and services. Thus, proper trainings to

the amateur crew members of Virgin Atlantic can definitely assist the Virgin Atlantic to give the

edge over its competitors.

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Virgin Atlantic has been operating in India since 2000. Thus with already ten years of its service

in India, Virgin Atlantic is still unable to adapt Indian culture properly. And since Indians are

very strict with their culture, customs and traditions, it becomes vital for Virgin Atlantic to move

as per the demands of Indian Culture.

Quitting its Mumbai-London route because of drastic price drop, might have created bad

impression among its customers. Thus to compensate that loss of brand image and to regain its

lost customers, Virgin Atlantic should offer average price with high qualitative service.

Lufthansa, Jet Airways, Fly Emirates, British airways etc have increased their clients in India.

Moreover, because of their offering of world-class on board services, they have not just been

successful to attract the passengers but also attract them to use their services time and again.

Thus, to survive in the aviation industry with such strong competition and beat its strong

competitors, Virgin Atlantic must stick to its ‘product and service innovation’ theme and value

based pricing.

Conclusion:

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As a step of Corporate Social Responsibility (CSR), Virgin Atlantic became the first commercial

airplane operator to fly a plane partially powered by bio fuels. Bio fuels are the cleaner and

cheaper method of reducing global warming.

Considering itself a challenger brand and with a strong commitment to challenge itself its

coming up with rebranding so as to maximize impact across social media channels. (Clark, 2010)

Winning the best Transatlantic Airline award at the 2010 World Airline Awards in itself is the

proof of Virgin Atlantic Airways clearly achieving some good levels of customer satisfaction

and satisfying the actual air travellers. (www.worldairlineawards.com)

Thus, Virgin Atlantic has started its journey to become the world’s most sustainable airline and

with Richard Branson they will be able to soon reach that destination by taking the customer’s

expectations, needs and demands.

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Analysis and Recommendation by Sonam Rinzin

Virgin the name itself conveys the brand image to the customers. On top of it Richard Branson

(chief executive and owner of Virgin) plays an important role in their company portfolio. During

virgin promotional adverts they don’t use celebrity; instead they use their CEO Mr Richard

Branson. Every customer associates Mr Branson with Virgin brand image. Virgin has created

300 branded companies worldwide and it currently employs 50,000 employees in 30 countries.

In July 2010, Virgin Atlantic celebrated its 10th anniversary of flying between London and New

Delhi. This particular flight route was success to the company. This route was launched in 2000

and was virgin’s twentieth destination with flights initially operating twice weekly. The flight

was extended to daily services from February 2005. Over the past decade, virgin has played a

major role in ensuring that India was an accessible destination for both business travellers as well

as leisure travellers. Before virgin came people were forced to fly via third countries and made

their journey extended by 5 hours more. Their direct flight service has reduced travelling times

between those two countries.

During the ten years’ service. Virgin Atlantic flew over a million passengers to and fro India.

During this year 2010, Virgin plans to carry over 140,000 passengers. Due to recent ash cloud

the flights were severely affected. In their decade over services. Virgin Atlantic had made

changes in their customer services especially their in-flight services. Initially in the beginning of

their operations they were not accustomed to Indian culture. Hence there was mismatch in

customers’ expectations and what Virgin Atlantic have to offer in flight service. Mainly the

problems were communication barriers, food (since Indian prefer their own food) so changes

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were made, for passengers travelling in all cabins three meals choices were made available- one

of which caters for the Indian palate and the British love of Indian foods. As a part off in-flight

entertainment services, Virgin Atlantic offers new releases of movies so that people can be

entertained in best possible ways. Even subtitles are available in English for Hindi movies.

Virgin have also recruited Indian employees on the flight to make the communication easier.

Initially in the beginning of its operations in India, Virgin was having difficult time finding its

own place since its niche market were narrowed down by their competitors ( British Airways)

which operates in more than 150 routes. Slowly they put on their momentum by giving good

services to the people. Even they have scheme going extra miles, which are given to those

customers who always travel in Virgin Flights. Virgin on the other hand has been trying its best

to get approval from Indian government to start their domestic flight. There had been three

meeting between Virgin Atlantic and Indian communication minister. Indian on other side fear of

market capitalization by the Virgin group and its influences on their other flights services. They

also don’t want foreign influences on their domestic market. Virgin stated that if they compete in

India’s domestic market, Jet airlines will be their closest competitor. Virgin also showed interest

on other markets such as Indian Telecom, music, financial services but Indian government was

not keen on the ideas showed by Virgin, since they are foreign company.

Conclusion

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Fighting in an airlines industry is difficult for any airline’s company. Virgin have come across

their hardship and maintained their niche market. Several factors have contributed to their

success: the power of their Virgin name which makes them Unique among any other brands, Mr

Richard Branson personal reputation, and their unrivalled network of contacts, partners, good

employees and services. Over all virgin atlantic runs as a family rather than hierachy and this

makes them one of the unique airlines in the world develping at higher pace.

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Analysis by Chakradhari Pratapagiri : 9100088 Virgin Atlantic airways has passed through many ups and downs ever since its entry into India in

2000, as the market was gaining momentum and entry barriers were not too many, as there were

other airlines that were readily competing on prices like Air France, Iberia and a serious

competition with British Airways, which are even today offering low prices for a long haul

journey from Delhi or Mumbai to London, any new company can lease aircrafts alike kingfisher

which started as a domestic player by hiring a few and now operating internationally, because of

low barriers of entry and low exit barriers the market has grown competitive with low price

operators running on wafer thin margins. The impact of economic factors combined with

competition leading to a closure of its services in 2009 of its Mumbai to London long haul

operations leaving it with just Delhi to London, to and fro services for some time although they

have restarted their operations recently. Richard Branson chose to be a brand ambassador himself

by extensive publicity of his image associated with the brand Virgin Atlantic. Virgin Atlantic

although chosen not to be a price leader in the market but offer value for money as a strategy

with a qualitative market penetration, the brand made a firm standing now, although not

popularly advertised across through various marketing channels like TV advertisements, video

broadcastings at cinema halls, etc., some of popular brand mantras were “Let’s Get Physical”,

“Our Crew Talks Back”, “We Do It Thrice a Week”, “Hello Gorgeous”, trying to reflect the fun-

loving attitude of crew on flight. There was no consistency in frequency of advertisements and

took quite a time in striking a balance between its professional and fun cultures; it could be

because it has already established its name in the market. Its philosophy of difference in

operations is quite appreciable as the challenge with Indian market was intense. There are many

27

firsts in Virgin Atlantic like first operator to introduce on flight ticketing system, first to have

passenger control video screens at the back of the seat also ‘The premium economy’ started by

Virgin Atlantic was between economy and business class many of which are replicated by its

competitors. The under estimation of Air India on its code-sharing agreement which did not

permit Virgin Atlantic to expand with ease, certain procedural obstacles led to delay in

expansion which caused quite a situation to handle for management of Virgin Atlantic. Indian

culture is different and it took time for Richard to adjust to the cultural shocks when on board

massages and other luxury provisions were introduced in its business class which eventually

slowed down on Indian journeys and limited to its US and other international destinations.

Richard is a quick learner who catered to customers what was needed although failed on certain

instances in proper prior planning like caterers who serve food on flight to customers which he

readily admitted to the faults and catered what was liked by Indian customers.

Corporate Social Responsibility: Gold Standard certified as per KYOTO protocol

specifications on energy efficiency projects taken up by Virgin Atlantic towards its responsibility

on climate. The emission reductions are reported between 2001 and 2006, while Indonesia

project is still in progress. Richard promised 10 years profit of travel business towards climate

which is a pledge of around 3 Billion USD.

http://www.virgin-atlantic.com/en/us/allaboutus/environment/bransonpledge.jsp

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Conclusion:

Virgin made a quick and serious headway into the business with majority of its decade, operating

in losses. Virgin Atlantic has learnt on its journey through many crux situations which could

have been avoided had it well planned like Competitors Hold on the market, Indian consumer

behavior are being two important aspects of all. Now, stabilized with decent profits despite

decline in aviation industry due to recession impact, there is an immense possibility of vertical

growth with its current positioning in the industry and would not be surprising if it becomes a

largest private player in the business of aviation in the world.

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References

1. http://www.quickmba.com/strategy/global/marketentry/, accessed on August 19 2010.

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