VIRGIN ATLANTIC AIRLINES Tim Dunlea Tristan Richards Bob Dunoskovic Philip Winchester Lindsay Charles

HISTORY

VIRGIN GROUP Parent Company London Broncos Virgin Express Virgin Atlantic Virgin Holidays Virgin Trains Virgin Balloon Flights Virgin Mobile V2 Music V.Shop Virgin Bride London Broncos Virgin Express Virgin Wines Virgin Cosmetics Virgin Cola Virgin Publishing Virgin Megastores Virgin Energy Virgin Direct

CURRENT SITUATION Second Largest Long Haul Carrier in UK Third Largest European Airliner operating in US Fifth Busiest Trans-Continental Airliner in 1999 Behind: Continental (1,947,000 Passengers) Delta (1,827,000 Passengers) British Airways (1,611,000 Passengers) Lufthansa (877,000 Passengers) Virgin (872,000 Passengers)

CURRENT SITUATION Average Growth Rate Through 2000 was 26.4% September 11, 2001

ALLIANCES Singapore Airlines Continental Airlines Malaysia Airlines BMI British Midland Nationwide (South African) Air India

FLIGHTS From UK to: Africa Asia North America Johannesburg, SA New York (Newark, NJ) Miami Los Angeles Boston Orlando San Francisco Washington DC Las Vegas Chicago Toronto Africa Johannesburg, SA Cape Town, SA Lagos, Nigeria Port Harcourt, Nigeria Asia Tokyo, Japan Hong Kong, China Shanghia, China Delhi, India

FLIGHTS From UK to: Caribbean Barbados St Lucia Antigua Tobago Grenada

US DOMESTIC AIRLINE FLIGHTS (1998) (Business Ranking Annual 2001) New York to Los Angeles * (3,625,000) New York to Chicago * (3,069,000) New York to Miami * (2,834,000) New York to San Francisco * (2,683,000) New York to Boston * (2,651,000) Honalulu to Kahului, Maui (2,541,000) New York to Orlando * (2,251,000) New York to Atlanta (2,377,000) New York to Washington * (2,372,000) Dallas to Fort Worth-Houston (2,313,000)

MARKETING

PROBLEMS The Richard Branson Factor

SWOT Strengths Richard Branson Privately Owned Good Image / Good Marketing Youngest Aircrafts in the Industry Low overhead Leased Aircrafts Flights to Major World Cities Alliances Sr. Leadership Team

SWOT Weaknesses Richard Branson Cash Flow Direct Routes One Hub Limited Destinations

SWOT Opportunities More Cities Bankruptcy of US Airline Companies European Union

SWOT Threats World Economy New Airline Restrictions Fuel Cost Terrorism Over Flight Restrictions New Airline Companies

POSSIBLE STRATEGIES OVERVIEW Expand partnerships to broaden service Invest in U.S. expansion, more cities Increase service between cities Increase advertising Explore alternative marketing strategies Reconsider use of Gatwick Airport

EXPAND ALLIANCES Currently, Virgin has five alliance airlines Three partners offer service from London to only one other city The fourth offers connections from London to five cities: Amsterdam, Brussels, Dublin, Milan, and Madrid The fifth offers service only between South African cities

EXPAND ALLIANCES To reduce risk and costs, Virgin could partner with other high-quality airlines to broaden the area covered Frequent flier miles would transfer easily between alliance airlines Virgin could provide service to smaller markets

U.S. EXPANSION Virgin offers service from London to NINE cities in the United States Cities such as Chicago, Detroit, Atlanta, and Philadelphia are not on the list Possibility of capturing market share in cities not currently being served by Virgin

INTERCITY SERVICE Currently, Virgin only offers flights to or from London There is a great opportunity to offer flights between cities in which Virgin already offers service The London market, while large, is very limited – intercity service could increase Virgin’s market The U.S. needs an airline that will provide consistently high-quality service

INCREASE ADVERTISING Virgin spends only 2% of turnover on advertising The industry standard is 5 – 7% Virgin has marketed itself very successfully using only 2% of turnover; the possibility exists to increase advertising while still staying well below the industry standard

MARKETING STRATEGIES Introduce a credit card that offers airline miles for every dollar charged Use Richard Branson, the charismatic Chairman of Virgin, in some of its advertisements Emphasize the quality of British service in American advertisements (case in point: the English butler)

GATWICK Gatwick Airport is located 28 miles south of London, and cannot be reached using the city’s extensive Underground system The airport has only one runway When travelers think of London, they think of Heathrow – Gatwick is out of the way and not an option that springs to mind Virgin may want to reconsider using Gatwick

OPTIMAL SOLUTION Broaden service by: Partnering with other high-class, high-quality airlines to provide service to cities currently not being served Offering service between U.S. cities currently served by Virgin If these strategies are successful, gain entry to other airports in the U.S. to expand to more cities

OPTIMAL SOLUTION cont. Increase advertising slightly to cover new markets in the United States Strive for better recognition in the United States, as Virgin is not necessarily regarded as an option by travelers Offer a Virgin Atlantic credit card in partnership with Visa or American Express, with a good rewards program for cardholders