Virgin Blue Holdings Limited Report

Introduction

Virgin Blue Holdings Limited is a low-cost Australia-based airline company headquartered at Fortitude Valley in Brisbane, Queensland. The company that was started in 2000 with only one route and 200 staff currently operates across 24 cities within Australia as well as South Pacific and South East Asia regions e.g. New Zealand, Samoa and Tonga with over 2100 weekly flights with an average of 15 million passengers annually (Virgin Blue, 2008a, par.4).

With significant share of 28% of the Australian domestic market, Virgin Blue is in a position to mount a substantial competition against earlier established locally owned airline companies, Qantas and its subsidiary counterpart company Jetstar who both own 68% of the market share. However, there is a fierce competition among the existing companies and the recent entry of new players such Regional Express and Tiger Airways within the same routes has worsened situation (IBIS World, 2009; Ledwidge 2007, p.7).

The company’s continuous effort to maintain and increase their market share is seen in its strategies such lowering air fares and going into direct competition with QANTAS and Jetstar through innovative approach to service provision that has pushed the market boundaries (Sadler 2007, p.9). With this approach, the company has branded itself with low airfare and better services packaged together for its customer to gain competitive advantage in the Australian domestic market (Virgin Blue, 2008; Asia Travel 2007, par.3).

Some of the unique human resource issues at Virgin Blue are:

1. their ability to retain their employees through a change in job offerings at a time when many airline companies are laying off their staff to make their workforce as lean as possible in response to the global economic crisis.
2. Maintaining culture fit through recruitment, i.e. all their employees go through a five-stage recruitment stage thus instilling their culture of ease at job place.
3. Further training and development of their employees at all levels.

This paper seeks to identify and analyse the Virgin Blue’s current human resources system and position, with emphasis on their change of job offerings and adopting cultural fit through unique recruitment process. It also offers critical recommendations on the areas to be addressed and emphasized in order to maintain and continue expanding their market share.

A change in job offerings

Since financial crisis takes hold and many companies has suffered and affected badly. To save the face of their employees, Virgin Blue has decided to retain as many of their employees as possible. This they have done by switching their employees to part time and letting them take voluntary unpaid leave. According to Wirtz, Heracleous & Pangarkar (2008, p.6) unpaid leave have proved very important for any companies in that employees who take some three to four month unpaid leaves tend to be more productive and creative when they come back. This is because they share information and ideas with other parallel companies that make them adopt new strategies of working harder and smarter for organization’s benefits (p.7).

Many studies have also concurred that keeping human resource issues within the close focus of the management and giving employees time to mingle within other departments outside their areas of specializations creates a culture of “I can do it” hence more productivity (Ledwidge 2007, p.7).

Analysts say that this is one way of maintaining business survival and achievement of the organizational goals in the present global financial crisis, without forgetting the interests of the loyal employees who could only be victims of circumstances (p.7).

Maintaining culture fit through recruitment

The company has a very unique corporate culture of creating a fun, modern and different yet hardworking culture that encourages teamwork and fresh ideas and innovation. This cultural identity is the basis on which it makes its advertisement promotions and is cultivated among the new recruits in the company to ensure continuity. The staffs acknowledge and understand that it is their responsibility to maintain the culture as it uniquely identifies the corporate identity of Virgin Blue. In this aspect, the company operates in specific core values that guide their conduct of all VB employees, irrespective of the pecking order of the operations and management. These values are:

• Safety – the need for safety at all times for staff members, their customers and the general public;
• Innovation – the quest to always have better systems, processes and procedures.
• Quality – striving to make sure that all of their guests experience quality service, both in the air and on the ground;
• Challenge – the quest to shake up the market and challenge rival airlines to be competitive;
• Fun – the need to enjoy themselves, both the workers and to create a friendly environment for their customers;
• Caring – to create a feeling of mutual respect for everyone; and
• Value – to provide value to their customers in their service (Virgin Blue, 2008a, par.2).

This culture is uniquely cultivated to ensure that the airline becomes employee of choice for people wanting to break into the aviation industry (Virgin Blue 2008b, par.6). What do VB do to cultivate this culture? The company has adopted a recruitment strategy where all their new recruits go through a five- stage process of recruitment. The airline solicits for people who are optimistic, humble, and enthusiastic and humble (Wirtz, Heracleous, Pangarkar 2008, p.12). They do this through behavioural activities they organize as part of the interview process, to cultivate one of their most important attributes; customer service.

According to Thomas (2009 p.13), human resource issues have become critical aspects of many organizations in the recent years considering the nature of the constantly changing business environment, more so in the service industry that requires excellent customer care. He explains that this can only be achieved through good cultivation of good customer care among the employees.

Theoretical perspectives have also been fronted that supports arguments that first impression created during the recruitment process may mean a lot in terms of what the employees will “want to produce” rather than what the organization will want them to do (Wirtz, Heracleous & Pangarkar 2008, 5). This is said to create a culture of “strong urge” that the new recruits will carry on through their whole working life (p.5).

Recommendations

As Virgin Blue continues to roll out its new international airline, V Australia, it has been recruiting for new staff members to join this organisation. (Virgin Blue, 2008)

I recommend that the airline focuses on putting more people from Virgin Blue into these new positions within V Australia. This would have more than 1 benefit and that can be:

• the costs of recruitment, selection and induction are slashed
• saves time
• The staff are already skilled and wont be rusty
• They can arrange less Virgin Blue domestic staff by shifting them into their new company.

The industry leading services are usually achieved through proper on-job training to achieve change process. Human Resource Information System is critical in the change management. In order to manage change process, it is important that Virgin Blue adopt the HRIM to track HR issues that are crucial for changing the management process. For example, HRIM has been proved important when designing people side of business so as to match the business model, a concept that has proved more than critical to the service industry’s change management process.

Conclusion

The critical value of human resource means that it needs to be critically looked at in an organization. The VB’s human resource department have identified the importance of good recruitment process. However, they need to address their future needs in order to help them maintain competitive advantage and pull through the harsh economic climate for eventual destination of corporate goal (Doyle 2007, p.12; Ledwidge 2007, p.4). this will call for proper on-job training and handling other human resource to get them have a cutting edge in service provision. This will not only confirm and maintain their current market share but also acquire more of the region’s passengers.

Reference

Asia Travel Tip.com 2007. Virgin Blue Signes Sponsorship Deal with South Sydney Rabbitohs. Web.

Compart, A., 2009, “Virgin Blue Retrenches In Face Of Recession And Second Half Loss”, Aviation Daily, Vol. 375, Iss. 37; p. 4

Creedy S 2008. Virgin loyalty program may be spun off. Web.

Doyle A 2007 Virgin Blue takes delivery of its first Embaer E-170 airliner. Web.

IBISWorld, 2009, Domestic Airlines in Australia Industry Report, Web.

Kelly, E., 2008, “Australian Task Force to Tackle Problem of Pilot Shortages”, Flight International, Vol. 173, Iss. 5127; p. 23

Ledwidge, J., 2007, “British Airways: the Case for a Human Makeover”, Human Resource Management International, Vol. 15, Iss. 5; p. 7.

Sadler, P 2007, “A Red Storm Rising”, Australian Aviation magazine No 244, Phantom Media Pty. Ltd., Fyshwick ACT. ISSN 0813-0876

Thomas, G., 2009, “Virgin Group Chairman Richard Branson and Virgin Blue Australia CEO Brett Godfrey”, Air Transport World, Vol. 46, Iss. 4; p. 45

Thorn, J., 2008, “Flying the Over-Friendly Skies”, Risk Management, Vol. 55, Iss. 12; p. 18

Virgin Blue Annual Report, 2008a, Web.

VB 2008b. Virgin Blue lands jet service in Albury- Wodonga. Web.

Wirtz, J., Heracleous, L., Pangarkar, N. (2008), “Managing Human Resources for Service Excellence and Cost Effectiveness at Singapore Airlines”, Managing Service Quality, Vol. 18, Iss. 1; p. 4-7