Sir Richard Branson on Virgin Atlantic Business Strategy

Speaking to reporters on an inaugural flight to Ghana, Sir Richard has provided a rich seam of material for business strategy students and teachers…

Branson’s interview is widely reported in the Press. A detailed account is provided here in the Telegraph

It would be well worth providing a printout of the article as a stimulus piece for group discussion. Perhaps the task initially would be to highlight and define some key terms, and then to go on to assess some of the strategic issues facing Virgin Atlantic.

Some key points that I noted down on first reading:

- The short & long-term damage to customer service and profitability from industrial disputes (BA & cabin crew)

- The impact of changing taxation on specific markets (air passenger tax)

- The importance of building customer loyalty and repeat business in the business air travel market (use of Virgin Club)

- Impact of different leadership styles - Branson implies that Willie Walsh’s confrontational approach to leadership is damaging BA

- The crucial link between maximising capacity utilisation and profitability. In the airline industry, the relevant term is “load factor” - the proportion of total available seats that are occupied by paying passengers

- The potentially damaging impact on Virgin Atlantic if the BA/AA alliance is permitted (reducing competition on key North Atlantic routes)

- The impact of the environmental lobby on the UK airline industry + political response - which means no third runway at Heathrow