To introduce the article, it would suffice to say that each of the five forces that are discussed subsequently differ in their impact on Virgin Atlantic as the dynamics underlying them vary and the strategy employed by the airline is subject to the fluid and the changing external environment. Virgin Atlantic is a pioneer in the low cost business model though in recent years, many of its competitors have successfully incorporated its strategies in their operations. The entry and the exit barriers for the aviation industry are quite high as can be seen from the fact that it takes a lot of capital to enter the sector.
Thus, if the established companies were to respond by adopting the strategies of their attackers, they would run the risk of damaging their existing business and undermining their existing strategies. What, then, was the appropriate response? This was the question facing many of the traditional airlines in recent years.
The concept of a low cost airline was started in the seventies by the American domestic carrier Southwest with the sole objective of offering cheap airfares to the consumers. This created a situation where already established flag ship carriers or legacy airlines to lose a significant amount of the market share to these newly formed low cost airlines, purely because of their ability to charge a lower price over traditional full cost airlines. Pacific Southwest, New York Air, Jet America entered the market of which, some survived the competition and others did not. In Europe the low cost concept was originated in the UK and Ireland based on the Southwest model with the introduction of easyJet and Ryanair in
Ian Douglas does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment. Republish our articles for free, online or in print, under Creative Commons licence. A dual brand strategy gives you protection when there is a downturn in the economic cycle.
We will be coming to Liverpool on Saturday May 12 and have planned to come from London with the Virgin fast train. It has been a while since we have taken this route as we have flown into Manchester on our recent trips. I see the same prices for 28 April and 5 May but if I check prices for earlier weekends I can get much cheaper train tickets.
For the first time in many years, Qantas ' international network is profitable while Virgin's is not. The improving domestic result was in comparison to deterioration at Virgin's smaller international network. Perhaps an indicator of the challenges Virgin has faced restoring domestic profitability, the airline is only now turning its attention to international.
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