Virgin America Essay Example

including the expansion of domestic destinations, increasing fleet size to 60 new Airbus A320 by 2013 – all funded through continuous revenue growth, and implementing an effective marketing campaign that aligns with the "Green Movement" without compromising on customer service and innovation. Investing in fuel-efficient aircraft would aid in cost reduction, allowing for the reinvestment of savings towards research and development of renewable fuel sources.

The case study report highlights Virgin America's innovative approach to domestic air travel, which has been widely recognized for its exceptional service, stylish design, and advanced technological amenities since it was founded in California in 2007. The report also notes that expanding the airline would create more jobs and contribute to economic growth. Additionally, a survey of over 8000 frequent flyers rated Virgin America as the top performer.

Virgin America has won the "Midsize Domestic Premium Class" and "Midsize Domestic Economy Class" categories for best service on Virginamerica.com for three consecutive years. The airline strives to maintain its position as one of the world's top airlines while also expanding as a major carrier, which requires achieving $1 billion in operating revenue and complying with regulations from the Department of Transportation regarding baggage handling, punctuality, and other operational metrics.

Virgin America operates with 39 Airbus 320A planes and flies to 14 destinations within the US and Mexico. Despite a year-over-year increase of 32% in operating revenue, which totaled $724 million for full year 2010, the airline's domestic flights are confined to select cities such as San Francisco, Los Angeles, New York, Washington D.C., Seattle, Las Vegas, San Diego, Boston, Fort Lauderdale, Orlando and Dallas-Fort Worth. However starting on May 25th of 2011 they will

initiate service to Los Cabos and Cancun. The main challenge for Virgin America is expanding their national reach while maintaining high levels of customer satisfaction.

In order for Virgin Airlines to reach its desired outcomes, it must focus on expanding its domestic niche markets through the addition of more aircraft and destinations. Meanwhile, Virgin America should prioritize expansion within the United States while preserving its position as a superior customer service airline in its specialized market. To accomplish this goal, it is crucial to examine multiple alternatives that emphasize driving forces and reduce resistant ones. Ultimately, increasing domestic destinations is a key strategic requirement.

Increasing Virgin America's fleet size to 60 new Airbus A320 planes by 2013 is one way to accomplish the goal. These new planes will be delivered from 2013 through 2019, with a total potential of 111 planes by 2019. Four of these planes will be from Jazzier Airways, a Kuwaiti airline, and four will be on the property by the end of 2011. Another 10 will arrive in 2011 and the last four will be on grounds beginning in 2012. Continual revenue growth is the second crucial factor that will fund this expansion. Virgin America will continue to achieve strong revenue performance, improved unit costs, and industry-leading load factors. The airline aims to narrow its operating loss and improve its operating margin while increasing its scheduled service capacity year-over-year.

(Virginamerica.com) In order for the company to succeed, it must prioritize a successful marketing strategy centered on the "Green Movement," while maintaining customer service and innovation as key factors. To effectively promote their unique, youthful airline experience, Virgin America will launch the "Breath of Fresh

Airline" advertising campaign, emphasizing their innovative and refreshing approach. Overall, this campaign aims to distinguish Virgin America's flight experience from other airlines.

S. carriers are revolutionizing conventional airline advertising to mimic the stylish and sophisticated ambiance that passengers experience on a Virgin America flight, as stated on Virginamerica.com. Additionally, another crucial step towards Virgin America's strategic plan would entail purchasing more energy-efficient planes that can decrease expenses and allocate funds towards sustainable fuel initiatives. With the new A320 aircraft model, fuel efficiency is projected to increase by 15%, accompanied by improvements in carbon efficiency, including significant reductions in NOx emissions (Virginamerica).

Virgin America could become a major airline by expanding its destinations internationally in order to increase revenue. The A320neo, which offers reduced engine noise and lower operating costs, will be used for this expansion. The plan also includes increasing the company's workforce to provide additional jobs and stimulate economic growth. Creating a work environment that values employees will lead to higher morale and positively influence consumer perception of Virgin America. These are the three alternatives that Virgin America could consider to achieve its goal.

Virgin America currently focuses on serving only 14 cities with exceptional service as a strategy for a niche market, disregarding the potential demand in the international market. However, expanding internationally can bring growth in revenue necessary to become a major airline. In 2010, the airline reported $724 million in operating revenue, falling short of the classification of a major airline by $276 million. The international flights can generate additional earnings, contributing to the major airline status.

Expanding the airline's destinations to Europe, Asia, Africa, the Caribbean, and other locations would generate more revenue. However,

it is essential to maintain the same amenities as domestic flights to compete with major airlines and provide excellent services globally. Furthermore, extending international flights can benefit economies by creating employment opportunities that lead to job growth and stimulate economic development.

Virgin America could improve its reputation by expanding internationally, but doing so may present difficulties in maintaining the exceptional service it provides domestically. To ensure that its top-notch quality remains unchanged, Virgin America must first evaluate the requirements of international passengers and determine if it is feasible to offer comparable amenities and perks while preserving revenue and excellence. Additionally, expanding may necessitate reducing some of the current amenities and perks offered to domestic customers. Some contend that Virgin America's success stems from its focus on creating perks and amenities for a targeted niche market as opposed to a wider audience.

Expanding to a larger international market can lead to a decrease in service quality and the need to reduce perks in order to accommodate an increase in flights and avoid financial loss. Additionally, increasing the price of airline tickets to match domestic market offerings could potentially harm both customers and revenue. Therefore, catering to a small niche market may be an easier and more sustainable option.

Given the present condition of the economy, a lot of customers are prepared to sacrifice additional advantages to cut costs. Virgin America may possibly experience a financial setback if their customers opt for cheaper tickets offered by other airlines for the same destinations. It is thus of utmost significance for this airline to examine the passengers' requirements before deciding on international expansion. Another option would be for Virgin America to procure

a smaller airline. This acquisition would entail uniting two cost-effective airlines to form a major carrier.

By consolidating two airlines into one, they can form an alliance and become a major airline, better equipped to compete with other leading names. One option for Virgin America is to merge with another airline, such as Southwest or Airtran. Merging brings the advantage of potential reductions in orders for new planes, which would save the airlines millions.

Consolidating with another airline presents the opportunity for earning profits and cutting expenses, as well as reducing traffic and delays (Smith, 2010). Combining operations typically leads to downsizing the fleet and getting rid of overlapping services in particular markets, resulting in shorter wait times and improved customer contentment.

Instead of offering international flights, expanding in the domestic markets could be the airline's final alternative. By increasing the number of destinations within the domestic market and offering more domestic flights, the airline can avoid sacrificing the current in-flight service and amenities for domestic customers. However, this requires the airline to increase their number of aircrafts which costs millions. Virgin America's present success indicates that passengers in the domestic market are willing to pay for additional amenities and perks. Introducing more domestic flights may generate extra revenue needed to classify as a major airline.

Although there may be initial expenses involved in acquiring extra aircraft, increasing the airline's domestic destinations could lead to long-term revenue growth and establish it as a significant industry player. Virgin America is advised to concentrate on developing two niche markets: expanding their domestic market by providing service to more US destinations, and investing in eco-friendly technologies to

capitalize on the "green" movement.

Individuals who value the excellence of Virgin America's services are willing to pay a premium price. Currently, Virgin America provides flights to 12 notable cities in the US and two destinations in Mexico. Nevertheless, the airline plans to expand its fleet from 39 to 60 planes by 2013.

Virgin America's objective is to grow as a major carrier and expand globally by establishing new routes and improving brand recognition. To realize this goal, the company invests significantly in engine technology research and development aimed at reducing fuel usage and emissions - an initiative that resonates with environmentally-aware customers. Since companies now prioritize efficiency and eco-friendliness, Virgin America's investment in sustainability serves as a critical growth strategy.

Virgin America has the potential for substantial expansion by concentrating on luxurious in-flight experiences and environmentally-friendly practices. The company should aim at two specific markets, acquire more planes within 2-3 years, and extend their domestic routes to accommodate this growth. By investing in future revenue growth currently, Virgin America can integrate "green initiatives" without raising sales and marketing expenses. Their existing advertising budget can be used to allure a new niche market that prioritizes eco-conscious decisions while upholding their pledge to top-notch in-flight service.

Virgin America's focus on eco-friendly operations and fuels is gaining appreciation from fliers as the green

movement grows. This positive feedback leads to continued patronage of the airline, resulting in the company receiving accolades and awards. As long as Virgin America continues to implement sustainable practices, they will continue to experience growth and require hiring hundreds of employees to fully staff new aircraft and airports they fly to. With over 1,800 people already employed, this expansion will significantly increase their team.

Virgin America's creation of jobs during a slow economic period will aid in reducing the unemployment rate across 31 states (Regional and State Unemployment Rates, 2011), consequently promoting economic growth. In addition to contributing to economic development, Virgin America aims to establish an example of sustainability and eco-friendly fuel and operations. The benefits of job generation and achieving a distinguished reputation are undeniable (BLS).

The information on regional and state unemployment for the year 2010 can be accessed at http://www through the citation gov. (2011). The data pertains to annual averages.

Smith, P. bls.gov/news.release/srgune.nr0.htm

(2010) The article "Who benefits when airlines merge?" was obtained from http://nytimes.com/2010/05/04/who-benefits-when-airlines-merge/. Furthermore, according to P. Smith's (2010) findings, Southwest will hold greater sway over Boeing.

The information originates from an article accessible at http://www.wsj.com/article/SB10001424052748704654004575518293648206492.html and is credited to Virginamerica.com.The information was retrieved from the website of Virgin America, found at http://www.virginamerica.

Visit the link com/va/press/2008/Feb/National-Ad-Campaign. html