Introduction
The given paper is devoted to the comparison of Richard Branson, one of the founders of Virgin Atlantics, and Fergus McMaster, a creator of Qantas, outstanding Australian airlines, their visions, ideas, and strategies employed by companies to guarantee their rise. It also shows the importance of strategic management of aviation as it helps to generate a competitive advantage and evolve (Zhang et al., 2019).
Vision
Successful companies are created based on a unique vision, which is a mental image of the rise of the firm and its state in the future. Qantas was founded with the prior goal to provide people with opportunities to reach various regions in Australia and the world. The firm’s mission states that a brand should be “a great airline that champion’s the Spirit of Australia” (Qantas, 2019, p. 3). It also presupposes optimism, experience, unity, and innovativeness (Qantas, 2019).
Virgin Atlantic has a similar vision as it appeared as a company that would provide services to people living in Britain and helps them to travel. The brand states that it follows the idea to “grow a profitable airline, that people love to fly and where people love to work” (Virgin Atlantic, 2018, p. 3). The given assumption impacts the functioning of the organization and its strategies.
Profit, Shares
In 2019, Qantas managed to generate an underlying profit of about $1,30 billion (Qantas, 2019). It is 17% lower than in 2018; however, it remains high, and there are forecasts predicting further growth and the stable functioning of the firm (Sarina & Wright, 2015). The brand remains a leading domestic airline (65% of the market), with about 28% passenger share in international markets (Qantas, 2019).
Virgin Atlantics can also be described as a powerful and influential airline that shapes the global discourse. Its market share constitutes 3,1% in 2018, or about 5.1 million out of the total 165 million passengers on scheduled services (Virgin Atlantic, 2018). Both compared companies remain prosperous and potent actors that might compete with rivals.
Fleet Type
The type of employed aircraft depends on the routes, maintenance and fuel efficiency, and business models. Virgin Atlantic’s fleet is not too large as the company has 37 aircraft in service, such as Boeing 747-400, 787-9, and Airbus A330-300, A340600, based at Heathrow. It means that the company’s facilities and resources are limited. Being a long-haul carrier, it possesses aircraft that can guarantee transportation to distant regions; however, the number of planes is low due to the nature of the firm and its vision, which presupposes the gradual growth from a local organization (Lutte & Bartle, 2017).
Qantas has many planes, which is explained by the nature of the company as it is considered a major domestic and one of the leading international carriers. At the moment, it uses 137 aircraft of various types, such as Airbus 330 (27), Airbus A380 (10), Boeing 737 (78), Boeing 787 Dreamliner (11), Boeing 747 (5), and Boeing 767 (1) (Qantas, 2019). The use of these models is explained by their ability to guarantee safety and comfort to passengers. Moreover, as a long haul carrier, Qantas benefits from its fleet characteristics such as the combination of maintenance and fuel cost, and distance covered. Altogether, both fleets meet companies’ needs and correspond to their business models.
Number of People
The high number of aircraft and the scope of the company means that Qantas employs multiple specialists who guarantee its functioning. At the moment, the company has 26,150 employees working in various departments and regions (Qantas, 2019). Moreover, it carries about 22 million passengers every year (Qantas, 2019). This data evidences that the company has a sophisticated and complex structure along with a developed organizational culture (Hobbs & Lyall, 2016). The company offers training for all workers as a part of the quality improvement process. Additionally, there is a social package for workers to provide them with safety guarantees. In general, Qantas has all elements of the corporate culture.
Virgin Atlantic is a smaller company, which means that it also has a limited number of people. In 2018, it had 8571 workers who functioned in different departments (Virgin Atlantic, 2018). Additionally, the company carries about 5.1 million passengers every year. (Virgin Atlantic, 2018) The given difference indicates that analyzed companies have opposite approaches to their evolution and functioning (Abeyratne, 2016). It means that as a comparatively small carrier, Virgin Atlantics can create a close and friendly atmosphere within the collective, which reflects its main vision. Additionally, there are multiple opportunities for successful training.
Strategy
At the first stages of Qantas Group’s evolution, McMaster introduced a simple and effective strategy that considered safety and convenience as the central priorities (Cusick, Cortes, & Rodrigues, 2017). It tries to become the world’s leading airline with an outstanding quality of care. For this reason, customer data and digital innovation are considered a competitive advantage for Qantas as these factors help to overcome rivals and attract new clients (Qantas, 2019).
From Porter’s five forces perspective, the strategy of Qantas rests on the power of its customers and suppliers, which helps to compete with rivals and face the threat of new entries (Agarwal et al., 2015). The company is a full-service carrier (FSC), and it targets the segment of business travelers who move outside Australia and are characterized by the middle or high level of income (Qantas, 2019).
As for Virgin Atlantics, as one of the founders and its leaders, Branson promotes another growth strategy. It presupposes the transformation of the airline from a point-to-point company to a network carrier with the appearance of multiple opportunities for further evolution and growth (Virgin Atlantic, 2018). It will also help to engage passengers in group flights and meet their requirements for the diversification of provided services and their quality.
Applying Porter’s concept, the strategy of the company presupposes dominance in a particular segment, which helps to increase the power of buyers and suppliers and meet new entries or competitors (Singh, Sharma, & Srivastava, 2018). Virgin Atlantics is also a full-service carrier with the target audience consisting of upper-class clients or business passengers who travel on transatlantic routes (Virgin Atlantics, 2018).
Competitors
As it has already been stated, the civil aviation industry is characterized by the high level of rivalry that is explained by the strategic importance of the sphere and the high revenues that can be accumulated by companies working here. For this reason, both Virgin Atlantics and Qantas face fierce competition and have to shape their strategies regarding this factor. The most important rivals for Branson’s company are Qatar Airways, Emirates, Jet2, Easy Jet, Etihad (More, 2019).
These companies work in the same market segment and have a similar target audience. For Qantas, the pool of competitors has some different brands: Singapore Airlines, Cathay Pacific, AirAsia, Malaysian Airlines, Emirates, British Airways, and Delta (Qantas, 2019). The divergence in the brands that should be considered the primary competitors come from the geographic location of selected firms, and their focus (Kearns, 2018). For instance, Qantas also tries to cover Asian regions, which means that airlines operating there are significant actors that should be considered.
Branding and Pricing Strategy
One of main Branson’s ideas was to create a recognizable and memorable brand that would attract people’s interest. Today, Virgin Atlantic benefits from its unique branding strategy, which emphasizes the high quality of the provided services. Striking red elements and decorations peculiar to all aircraft and the image of a flying lady attract customers (Clarkson, 2016). Additionally, the relevant pricing strategy is characterized by high flexibility. The company does not fall into the low category; instead, it offers unique opportunities to differentiate provided services and establish a desired price.
Qantas employs a similar branding strategy as it tries to create a recognizable image. Kangaroo, as a unique Australian animal, is selected by McMaster as the symbol of the brand that represents its spirit and focuses on the domestic market. (Qantas, 2019). The company promotes its outstanding services and quality as two primary factors that should attract clients and guarantee their devotion. Additionally, there is a Price Promise stating that if a client finds a better price for the same dates, conditions, and offer, he/she will be refunded the difference (Qantas, 2019; Sharma & Singh, 2017). It means that the company’s pricing strategy considers its close competitors and tries to make costs more attractive to passengers.
Motivation to Achieve Success
One of the main success factors that motivated McMaster to move forward was the absence of an effective and reliable domestic carrier that would meet people’s requirements for the quality of travel (White, 2018). For this reason, this idea influenced all employees to engage in the activity that would help to create an Australian carrier.
Virgin Atlantic’s founders followed other visions and motifs. There was a need for innovation and reconsideration of traditional approaches used in the aviation sector to guarantee its further evolution, growth, and the ability to fulfill diversified requirements of clients (Vision Atlantic, 2018; IATA, n.d.). For this reason, Branson engaged in the activities that fostered the rise of the firm and its successful transformation.
Customer Service and Promotional Activities
Both brands recognize the significance of useful promotional activities and customer service. Thus, Branson emphasized the fact that clients’ satisfaction is the fundamental factor for the evolution of any carrier. Virgin Atlantic offers multiple loyalty programs for passengers who have many miles and continue using the brand’s services (Virgin Atlantic, 2018). At the same time, the firm’s customer service employs specific tactics involving social media, Internet, and online platforms to remain in touch with all clients, monitor their feedback, and offer specific changes that will help to stay attractive for people (Lin, 2017). They help to ensure the loyalty of the target audience and monitor their feedback.
Qantas also prioritizes promotional activities and customer service as the basic tools needed to generate a competitive advantage and remain beneficial. For instance, the Frequent Flyer program is designed to reward individuals who use the airline’s services often and are devoted to it (Joyce, 2017). Special points can be generated and then redeemed to acquire the desired benefit.
Quality Improvement and Marketing Strategy
One of the major common features of the airlines is that they operate as full-service carriers. It means that they offer passengers the opportunity to select economy or business class travel (Doyme, Dray, O’Sullivan, & Schäfer, 2019). There are additional services, such as meals, beverages, and comfort packages that can be selected by individuals if needed (Chandu, 2018). This approach provides all customers with the desired flexibility and diversification levels (De Syon, 2019). The adherence to this strategy is a part of the organizational culture of both brands as they position themselves as high-quality, reliable, and safe carriers that have a wide range of options suitable for representatives of different classes (Crane, 2017; Ongaro & Ferlie, 2020).
Virgin Atlantic and Qantas encourage passengers to leave their feedback to be able to respond to it and eliminate factors that trigger the growth of dissatisfaction (Clarkson, 2016). This idea was one of the fundamental concepts introduced by founders with the prior goal to align the continuous improvement of carriers (Lutte & Bartle, 2017; Grant, 2017). As a form of quality improvement, Qantas uses external catering businesses to provide passengers with premium food that will be able to meet their requirements (Qantas, 2019). It guarantees an increased level of loyalty and the desire to use the company’s services again (Cook & Billig, 2017). Virgin Atlantic follows similar patterns with the leading purpose to avoid deterioration of its image and acquiring new clients.
Conclusion
Altogether, both Branson and McMaster managed to found successful airlines that transformed into the leaders of the industry with multiple opportunities for further growth. Virgin Atlantics and Qantas are full-service carriers that are focused on the business class that uses transatlantic routes or moves from Australia. The firms benefit from successful branding methods, flexible prices, and effective strategies that meet their visions.
References
Abeyratne, R. (2016). Rulemaking in air transport. Montreal, QC: Springer.
Agarwal, R., Sehgal, S., Saranga, M., Sinha, P., & Nagpal, R. (2015). The aviation sector pricing strategies and the game of expansion. The Indian Economic Journal, 63(1), 52–65. Web.
Cook, G., & Billig, B. (2017). Airline operations and management. London, UK: Routledge.
Crane, D. (2017). Aviation mechanic handbook: The aviation standard (7th ed.). New York, NY: Aviation Supplies & Academics, Inc.
Chandu, A. (2018). Pioneering flying: The vision and the failure of Australasian Aerial Transport, 1919–20. The Journal of Transport History, 39(1), 92–109. Web.
Clarkson, N. (2016). How Virgin Atlantic has developed its brand sky. Web.
Cusick, S., Cortes, A., & Rodrigues, C. (2017). Commercial aviation safety (6th ed.). London, UK: McGraw-Hill Education.
De Syon, G. (2019). Alan Dobson, a history of international civil aviation: From its origins through transformative evolution. The Journal of Transport History, 40(2), 286–287. Web.
Doyme, K., Dray, L., O’Sullivan, A., & Schäfer, A. (2019). Simulating airline behavior: Application for the Australian domestic market. Transportation Research Record, 2673(2), 104–112. Web.
Grant, R. (2017). Flight: The complete history of aviation. London, UK: DK.
Hobbs, A., & Lyall, B. (2016). Human factors guidelines for unmanned aircraft systems, Ergonomics in Design, 23(3), 23–28. Web.
International Air Transport Association (IATA). (n.d.). Future of the airline industry 2035. Web.
Joyce, A. (2017). Positioning the Qantas Group for growth and sustainable returns. Web.
Kearns, S. (2018). Fundamentals of international aviation. London, UK: Routledge.
Lin, W. (2017). Skywatching: Vertical surveillance in civil aviation. Environment and Planning D: Society and Space, 35(3), 399–417. Web.
Lutte, R. K., & Bartle, J. R. (2017). Sustainability in the air: The modernization of international air navigation. Public Works Management & Policy, 22(4), 322–334. Web.
More, A. (2019). General aviation market 2019 global industry growth analysis, segmentation, size, share, trend, future demand and leading players updates by forecast to 2023. Web.
Ongaro, E., & Ferlie, E. (2020). Strategic management in public organizations: Profiling the public entrepreneur as a strategist. The American Review of Public Administration. Web.
Qantas. (2019). Annual report. Web.
Sarina, T., & Wright, C. F. (2015). Mutual gains or mutual losses? Organizational fragmentation and employment relations outcomes at Qantas Group. Journal of Industrial Relations, 57(5), 686–706. Web.
Sharma, M. G., & Singh, K. N. (2017). Servitization, coopetition, and sustainability: An operations perspective in the aviation industry. Vikalpa, 42(3), 145–152. Web.
Singh, J., Sharma, S. K., & Srivastava, R. (2018). Managing fuel efficiency in the aviation sector: Challenges, accomplishments and opportunities. FIIB Business Review, 7(4), 244–251. Web.
Virgin Atlantic. (2018). More to love. Annual report. Web.
White, L. (2018). Qantas still calls Australia home: The spirit of Australia and the flying kangaroo. Tourist Studies, 18(3), 261–274. Web.
Zhang, B., Ritchie, B., Mair, J., & Driml, S. (2019). Is the airline trustworthy? The impact of source credibility on voluntary carbon offsetting. Journal of Travel Research, 58(5), 715–731. Web.