Swot Of Virgin Atlantic And The Airline Industry Tourism Essay

For its service company is good recognized and has been acquiring wagess which are supplying them with a strong trade name image. Zagat, 2009 ranked them as taking participants for international inflight services like amusement and flyer plan. Besides by travel weekly ‘s 2009 virgin Atlantic was ranked as the best international air hose.

hypertext transfer protocol: //www.travelweekly.co.uk/Articles/2009/01/28/30064/globe-travel-awards-2009-all-the-winners-by-category.html

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Besides in Western Europe, company has been ranked on first topographic point in comparing to British Airways, Air France and Lufthansa. Besides in January 2010, company has received award of Best Scheduled Airline and Favourite Airline. A good trade name is a competitory advantage for the company to do place in planetary market and besides to vie with its rivals.

hypertext transfer protocol: //www.travelweekly.co.uk/Articles/2010/01/20/32852/globe-travel-awards-2010-the-winners-in-full.html

Comprehensive Servicess

Company provides a good service to its clients. Servicess like cheque in installations, luggage handling, repast catering, and in-flight amusement. It is one of the largest British companies which provide long haul international air hoses. Sometimes they besides provide riders with particular intervention i.e. supplying them with the particular repasts, mobility AIDSs and besides with the wellness cantonments at the clip of going and reaching.

Virgin Atlantic besides offers winging nines on which they can gain stat mis and after holding a specific figure of stat mis they can hold a free ticket. It is one of the largest air hoses that provide long haul Tourss all over the universe.

Strong fiscal public presentation

Company is basking a strong fiscal public presentation even during the fiscal crisis and economic system crisis.

2007

2008

2009

Employee turnover

1,816,200

2,010,900

2,238,800

Net income Before Tax

31,400

6,000

49,800

Net income Margin

1.73

0.30

2.22

In 2009 the company turnover has increased by 10.17 % as compared to 2008. Besides the net income before revenue enhancement increased by 87.95 % to make ?49,800 in financial twelvemonth 2009 compared to ?6000 in 2008. Besides profit border increased from 0.30 to 1.73 in 2009. From the fiscal analysis we can see that company is basking the strong fiscal public presentation that has allowed the company to spread out its operating activities in both markets i.e. domestic and international.

Failing

Private Ownership

It ‘s truly hard for the company to raise capital as it is private owned, which gives unfavorable place to a company in comparing to publicly owned company. Publicly owned company have healthier entree to capital market, and besides superior fiscal flexibleness in funding enterprises. Virgin Atlantic airways demands extended capital to turn its concern market for that they have to be under public ownership instead than private ownership as private ownership provide limited sum of funding option for the company.

Lack of Scale

Virgin Atlantic airways in its operation is missing behind with big participants in the market i.e. big participants like British Airways and Air France- KLM operates in 300 and 249 finishs whereas Virgin Atlantic is merely working in 30 worldwide finishs merely. Besides British air passages and Air France- KLM got swift base of 245 and 635 aircrafts whereas Virgin Atlantic got swift base of 38 aircraft merely. So we can reason that its rivals are big in size which gives them a competitory disadvantage.

Opportunity

Growth of Global Airlines Industry

With the aid of research it has been found that air hoses industry has got a enormous growing in past few old ages and is expected to turn more in future. Research workers found that air hoses industry worldwide had entire gross of $ 467.4 billion in twelvemonth 2008. By 2013, the air hoses industry globally will acquire the gross of $ 609.3 billion i.e. addition of 23.30 % .

In 2008, 2.1 billion riders travelled with the beginning of air passages. Research workers forecasted that by 2013 the volume of riders will increase to 2.6billion i.e. by 19.23 % since 2008. Right now Virgin Atlantic is merely runing in 30 finishs globally. In future as the planetary air hoses industry is turning, it will supply an chance to company to increase their operating finishs which help them to increase their gross and market.

Global travel and touristry industry is turning

Air travel industry is well-known within the conveyance and touristry industry, as it is the lone beginning of conveyance for international travelers. With the aid of research it has been found that in 2009 over half of the UK population had travel by the beginning of air travel, which tells that the demand for the air travel is really strong. Even at the clip recession, the mentality for the air industry remains stronger for the long term prospective.

With the aid of World Travel & A ; Tourism Council ‘s Tourism Satellite Account research we are able to discovery that the gross passenger-Km has grown to 11.9 % in June 2010. This has helped air industry to retrieve from the volcanic eruption in April. Besides it has been found that the Real GDP for the Travel & A ; Tourism Economy was -4.8 % in 2009 and now in 2010 is expected to be 0.5 % . Besides they have predicted that the universe travel and touristry will bring forth over $ 13trillion for the period of 2008-2017, i.e. is the mean growing of 4.3 % per annum. We can reason that in future increasing of planetary travel and touristry industry will bring forth extra gross for the virgin Atlantic air passages.

( hypertext transfer protocol: //www.wttc.org/eng/Tourism_Research/Economic_Research/Monthly_Update_of_Tourism_Indicators/ )

Menace

Intense competition and monetary value discounting

Intense competition and monetary value discounting

The air hose industry is characterized by significant monetary value competition, particularly in domestic markets.

Carriers use price reduction menus to excite traffic during periods of slack demand.Virgin Atlantic competes

on the footing of monetary value, client service, costs, frequence and convenience of programming, frequent

flyer benefits, efficiency and productiveness. Some of its major rivals include, AMR, Air France-KLM,

British Airways, Cathay Pacific Airways, Continental Airlines, Delta Air Lines, Japan Airlines System,

Lufthansa and UAL.

In recent old ages, the domestic market portion held by low-priced bearers has increased significantly and

is expected to go on to increase, which is dramatically altering the air hose industry.The increased

market presence of low-priced bearers, which engage in significant monetary value discounting, has diminished

the ability of the web bearers to keep sufficient pricing constructions in domestic markets to

achieve profitableness.

In add-on to monetary value competition, air hoses besides compete for market portion by increasing the size of their

path system and the figure of markets they serve. The increased competition in these markets,

peculiarly to the extent the company ‘s rivals engage in monetary value discounting, may hold a stuff

inauspicious consequence on the company ‘s consequences of operations, fiscal status and liquidness.

EU ordinances

The European Union has passed statute law that came into consequence get downing early 2005, for counterbalancing air hose riders who have been denied get oning on a flight for which they hold a valid ticket. The statute law besides imposes fixed degrees of compensation to riders for off flights, except where the air hose can turn out that such cancellation is caused by extraordinary fortunes, such as conditions, air-traffic control delays or safety issues.

Passengers subject to long holds ( in surplus of two hours for short draw flights ) would besides be entitled to assistance including repasts, drinks and telephone calls, every bit good as hotel adjustment if the hold extends nightlong. In add-on for holds, over five hours, the air hose would be required to reimburse the cost of the ticket or supply rerouting to the rider ‘s concluding finish. The infliction of the ordinance would significantly increase the disbursals incurred by Virgin Atlantic and may impact its profitableness.

Rising air power fuel monetary values

Due to the lifting oil monetary values globally, the monetary values of air power fuel have gone up well in the yesteryear

few old ages. The mean cost of a gallon of commercial jet fuel in the US has increased since 2000,

from $ 0.7 per-gallon in 2000 to $ 1.9 per-gallon in 2006. Harmonizing to the Air Transport Association

( ATA ) , at a usage rate of 19.5 billion gallons of fuel a twelvemonth, each penny addition in monetary value per gallon

adds $ 195 million in one-year costs for the air hose industry. Aviation fuel, which comprises the largest

cost constituent for a transporter, is responsible for the worsening borders of most air transit

companies. As a consequence, some logistics companies incurred immense operating expenses while runing in many

low-volume finishs. This tendency could impact Virgin Atlantic ‘s borders excessively as it is largely reliant

on air cargo concern.

Slowdown of planetary economic system

Harmonizing to the IMF universe economic system mentality, the universe economic system will decelerate aggressively in 2008 and in

2009, with the US likely to skid into recession triggered by the current fiscal convulsion. The IMF

prognosiss, that the planetary economic system, which grew by 5 % in 2007, will lose considerable velocity decelerating

to 3.9 % in 2008 and 3 % in 2009, taging the lowest growing rate since 2002. In the yesteryear, the IMF

has called planetary growing of 3 % or less the equivalent to a planetary recession. Virgin Atlantic operates

through 30 states globally. A weak planetary economic mentality is likely to impact demand for air

travel and the company can non offer any confidences in respects to the public presentation of its concern

theoretical account under changed economic conditions. Therefore, Virgin Atlantic ‘s concern is likely to be

adversely affected