Virgin Atlantic

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Business in Context

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Table of Contents
Introduction......................................................................................................................................3

Task 1...............................................................................................................................................4

PESTLE Analysis........................................................................................................................4

SWOT analysis:...........................................................................................................................6

Task 2...............................................................................................................................................7

How the changes in PESTEL factors has influenced the Opportunities and Threats for the
business........................................................................................................................................7

How the company is addressing their Strengths to negate Threats and Weakness affecting their
Opportunities...............................................................................................................................8

Task 3 Evaluation of different styles of leadership.........................................................................9

Task 4: Recommended leadership style for Virgin Atlantic airlines.............................................13

Task 5 Corporate Social Responsibilities of Virgin Atlantic Airlines..........................................13

Conclusion.....................................................................................................................................14

Reference.......................................................................................................................................15

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Introduction
In today’s competitive environment business are facing different challenges which affects their
business activities and Airline industry is no exception. This report critically discusses the
impacts of different environmental factors on British airlines named Virgin Atlantic by doing a
PESTLE analysis. It further evaluates different leadership style and recommended a suitable
style for the company. It also discusses different CSR activities of the company. Virgin Atlantic
Airways is a privately airline company established in the United Kingdom that began operations
in 1984. It is 51 percent controlled by Virgin Group and 49 percent controlled by Singapore
Airlines and serves up to 40 locations in North America, Asia, and Africa.

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Task 1

PESTLE Analysis

Virgin Atlantic's PESTLE Analysis examines the company's business strategies.


Virgin Atlantic's PESTLE Analysis looks at how political, economic, social, and technical
(PEST) issues, as well as legal and environmental considerations, affect its company.
The PESTLE Analysis identifies the various extrinsic situations that have an influence on the
brand's business.
Political: In the United Kingdom there are two large political parties (labour and conservative)
that affect the country's political climate. Because of the recession in different nations,
consumers are often choosing cheap airlines because of the problem of cash shortage. The firm
will be worried because it will lead to decrease in the company's revenues. Brexit will also
adversely affect the amount of persons visiting the UK and will also lead in the firm's loss of
income (Hasan et al, 2019). Political instability has a detrimental influence on the different
businesses and the aviation sector is also one of the key sectors

Economical: The aviation sector has suffered as a result of the global downturn in COVID-19
wherein numerous airlines face survival issues and which is  truly why Virgin Atlantic struck
severely.   On May 2020, the company determined that by the summer of 2022, the company lay
off 3,000 people plus it it will have therefore floats up to 35 (Lenoël, and Young, 2020).
Gatwick's activities would not likely be resumed after the epidemic. The firm sued for Chapter
15 Bankruptcy Protection.   The firm is presently in a really difficult time because of lower
revenues and deficits.

Social factors: In several nations Virgin Atlantic does have to examine closely at their lifestyle,
expenditure preferences, gender distribution, demographic factors, etc. Much of the company's
income comes from the United Kingdom, so that it cannot  neglect UK social aspects. The
aviation sector is facing major concerns from the danger of air traffic control since it tends to
make it hard for the airline to function (Bottasso et al, 2015). Because to COVID-19, people
increasingly shun travel because they are afraid of viruses which has really affected the entire

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aviation sector quite badly. The company is facing enormous loses because airlines are unable to
function efficiently as a result. However in many cases consumers are increasing preferring
premium services at a premium charge than before which is a good side.

Technological Factors: In the aviation sector, technical considerations play a major role, since
continual technological improvements enable airline companies enhance their quality levels and
lower operational costs. Given the rise of digitization, the different firms have generated
numerous chances to engage to the digital economic disruption. To please its consumers, and at
the while enhance performance with improved technology, the firm needs grasp the newest
technological developments because the internet is readily available, customers may contrast the
services of other companies, implying that the service should be upgraded. Virgin Atlantic has
also embraced modern technologies, such as IT-based services, self-service kiosks, websites, and
mobile app applications.

Legal: In order to ensure appropriate sanitation and maintenance of the space among passengers,
the government of several nations has established new legislation aiming at ending COVID 19
spreading. In order to please its different stakeholders, the firm needs ensure that it complies
with these regulations.

Environmental: People are becoming more environmentally-friendly and comprehend the


environmental and health impacts of excessive carbon emissions. The aviation sector is always
attacked for its large emissions of carbon, leading to various difficulties. Moreover, different
nations now possess different environmental legislation in place to tackle global warming so that
the airline should obey such legislation to prevent the government and other NGOs from
intervening(Albers and Rundshagen, 2020). In environmental problems, Virgin Atlantic has
indeed been highly responsive. The firm, for example, declared intentions to reduce its
greenhouse gas emissions.

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SWOT analysis:
Strengths Weaknesses
 Strong brand image for efficient  Virgin Atlantic's market share growth is
services constrained due to fierce competition.
 They  have a happy client base as well  Low worldwide penetration,
as a favourite consumer's airline. particularly in emerging markets
 One of the Britain's major airlines with  The Company's performance has also
more than 35 locations been limited by its reliance on Richard
 Richard Branson's exceptional publicity Branson's methods.
and ingenious marketing  The company's scope has also been
 High brand recognition as a luxury severely constrained due to private
aviation company ownership.
 Over 8,000 qualified and competent  Due to Brexit, there are financial
staff difficulties.
 They are seen as a trailblazer in the
industry
Opportunities Threats
 Increasing consumer preference for  Evolving aviation rules
Premium services  Increasing fuel prices
 A new runway at Heathrow  Virgin Atlantic's profits may be
 Relationship with the Delta impacted by rising labour expenses.
 The European market is becoming
more competitive.

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Task 2

How the changes in PESTEL factors has influenced the Opportunities and
Threats for the business.
From the PASTLE Analysis it can be seen that changes in external environment are creating
several threats challenges as well as advantages for Virgin Atlantic. These changes environment
have created several opportunities and threats for the company. Political instability affecting the
business activities of the organisation as there are two major parties in UK and they seem to
always conflict each other which impact business climate. New elected party seems to change
the previous laws which were created by their rival party. Again Britain’s government decision
Brexit hugely created a threat for the company as there will be less people visiting in UK which
will directly impact on their revenue. Economic downturn due to covid 19 posing a major threat
for the company as consumer’s spending pattern is decreased and they are looking for affordable
airlines. Social factors are imposing both threats and opportunities for the company (Albers and
Rundshagen, 2020). Though due to covid consumers are becoming more reluctant to travel
however they are also becoming more favourable for buying premium service which is an
opportunity for the company. The technological factors are creating opportunities for the
company as the company is adopting new technologies. The already providing online serviced,
mobile app services, Self service kiosk which are creating opportunities for the company. Legal
factors creating an opportunities for the company as it demands to maintain proper safety and
sanitisation which may help the company to create a positive image among the consumers if
they can provide proper safe and secure travel experience to the consumers. And lastly rising
environmental concern among the consumers and different initiate of the government to
safeguard the environment is a potential threat for the company which may require the company
to modify their business activity. However it is also an opportunity for them as they are already
very concerned about the environmental issue which can create a positive image among the
consumers.

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How the company is addressing their Strengths to negate Threats and
Weakness affecting their Opportunities.
One of the weaknesses of Virgin Atlantic is their global presence is very limited. The company
can increase their global presence by expanding in the international market. In that case their
strong brand recognition will greatly help them. Again their unique and creative promotional
strategies by Richard Branson can get the consumers attention in the global presence. The
company is facing high competition in the global as well as domestic market. Their efficient and
premium service quality can offer them competitive advantages in this regard. Again they have
highly skilled employees who can provide quality services to the consumers which ultimately
give them competitive edge(Albers and Rundshagen, 2020). Due to Brexit issue the company is
facing financial difficulties as less consumers are entering in the county. However they can
overcome the issue by introducing new route and expanding in the foreign market which can
certainly help them to generate more revenue. Another threat is the increasing price of fuel and
labour cost which will impact the pricing of their service as they will have to increase the price to
generate profit. The company can address the issue by focusing on their loyal customers. By
proving premium service and with excellent quality they can ensure consumers that they are
getting the service worth money. So applying these methods Virgin Atlantic is addressing their
threats and weaknesses as well as grabbing opportunities.

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Task 3 Evaluation of different styles of leadership
There are different leadership styles are developed which are compared and contrasted below:

Authoritarian Leadership: Authoritarian forms of leadership make it possible for a leader to


set objectives and achieve results. In cases when a leader is the league's most experienced, one-
on-one show can prove fruitful (Ali et al, 2015). Even though this is a successful technique over
time, innovation is compromised because the group is not sufficiently involved. The
authoritarian style of leadership is utilized if group members want unambiguous guidance.

Pros:

 There might be a reduction in the time spent on decisive choices.


 Clear emphasis may be placed on the control chain.
 Errors can be minimised in the execution of plans.
 The use of authoritarian style of leadership produces coherent results.

Disadvantages:

 Sometimes a highly stringent management style might lead to staff revolt.


 It destroys creativity and inventiveness for employees.
 It decreases synergy and cooperation between groups.
 The contribution of the group is significantly decreased.
 Leadership of authority raises the rate of staff turnover.

Participative Leadership 

The styles of participation are founded on a philosophy of democracy. In the decision-making


process, it is essential to include entire team. The members of the group therefore feel involved,
committed and driven to participate. In the decision-making process, the boss will usually get the

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final say. If differences exist inside one group, nevertheless, an agreement might be a long
tedious procedure.

Advantages:

 It promotes enthusiasm and happiness for employees.


 It promotes creativity for employees.
 A participatory management approach assists to build a strong team.
 It is possible to have high efficiency.

Disadvantages:

 Decision-making take time.


 Leaders are very likely to be decreased by staff.
 Often communication problems may occur.
 Due to openness in information exchange security problems might occur.
 If the personnel are untrained, inappropriate judgments may be taken.

Delegative leadership

A delegative leadership style is sometimes described as "laissez-faire leadership," which


emphasizes on distributing tasks to members of the team. If Group members are skilled, accept
accountability or choose to engage in solo tasks, that could be an effective method (Gandolfi,
and Stone, 2018). Disputes between members, meanwhile, can fracture ultimately break a group,
resulting in negative desire and low morals.

Advantages:

 Employees are given the opportunity to put their leadership talents to the test.
 Greater creativity and innovation are possible outcomes.
 Dread of failing is reduced.
 Promotes group members and the leader to have faith in each other.

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 Inculcate a feeling of self-sufficiency.

Disadvantages:

 This can lead to a loss of efficiency.


 It's not uncommon for team members to have disagreements.
 It's possible that roles and duties will be misunderstood.
 With an inexperienced or uninspired crew, it will not be successful 

Transactional management

To accomplish the tasks completed, transactional leadership styles employ "transactions" in


between manager and subordinates, such as incentives, penalties, as well as other trades. The
leader establishes clear objectives, and members of the team understand how they will be
compensated for overall cooperation. Such "mutual benefit" style of leadership seems to be more
focused on efficiently adopting standard protocols and processes than with implementing
significant organizational changes.

Advantages

 Leaders set precise, quantifiable and time-based goals for workers.


 Increases Motivation of employees and production
 Removes or reduces complexity inside the control chain.
 It establishes a structure which leaders can easily deploy and workers can easily adopt.
 Staff may pick rewards.

Disadvantages:

 Creativity and inventiveness is reduced to a minimum.


 Compassion is not appreciated.
 Transactional leadership produces greater supporters among workers than leaders.

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Transformational Leadership

The leaders motivate his subordinates with such a goal and enables employees to do accordingly
in the approaches of transformational leadership.  The leader also functions as a guide.

Advantages:

 This reduces the turnover rate of employees


 Company strategy is highly important for transformational leadership
 Employees are typically trained in high morality.
 It employs enthusiasm and encouragement to receive staff assistance.
 It's not a forceful leadership technique.
 It attaches great importance to relations.

Disadvantages

 Leaders may mislead staff.


 Regular encouragement and evaluation might become necessary.
 Lacking of the consent of workers, activities cannot be carried forward.
 Transformation management can occasionally result in norms and rules being deviated.

Virgin Atlantic airlines employs a various leadership approaches instead of relying only at one.
This helps the organization to cope up with different situation and also provide the organization
the best benefits. The company uses authoritarian leadership, participated leadership and also
transactional leadership approaches. Applying these three types leadership facilities the company
to give the employees certain democracy but not too much to lose control.

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Task 4: Recommended leadership style for Virgin Atlantic airlines.
The transformational style can be considered as the most appropriate and most suitable
leadership style for Virgin Atlantic Airline. Transformation leaders build a vision aligned with
organizational requirements and steer their employees by encouragement towards that shared
purpose. The major distinction among transformative leadership and certain other approaches
is unlike transactional leadership or bureaucratic management that doesn't want to alter the
existing system that is, change the mechanisms and procedures which are not effective. This
leadership approach will enable virgin Atlantic to achieve its corporate goals while empowering
their employees (Al Khajeh, 2018). It encourages innovation and creativity among the
employees. The company can reap the benefits of motivated and satisfied employee who will
offer increased productivity to the organization. This leadership will also develop strong
relationship with employees and the management. As virgin atlantics is facing financial
difficulties as well as their market share is decreasing this leadership style can help them to
achieve their strategic business objective. Therefore the company should implement
transformational leadership into their organizational structure.

Task 5 Corporate Social Responsibilities of Virgin Atlantic Airlines


Virgin Atlantic has the vision  to ensure excellent social connections, its workers, customers as
well as other stakeholders. Huge profits is not really the primary goal of the company, but is
complemented with ethical duty in the community. It has performed various social activities
through its various program to address the different social issue which helped to build a strong
image in the society. Some of them are given below:

Environment: Their primary environmental goal is airplane fuel and carbon savings, while They
also care about aircraft trash and pollution They've set a goal of decreasing CO2 emissions from
airplanes by 35% by 2022 (Lee et al, 2018). They've been keeping an eye on Their onboard load
over decades optimizing airplane sanitation and maintenance and coaching Their pilots about to
perform more effectively. Every one of these factors have the potential to the amount of gasoline

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They consume on each flight. They're also considering the sustainability of energy. Since 2011,
They've been collaborating with LanzaTech, a cleantech firm, on their technique for converting
commercial waste emissions and other abundant waste streams into energy.

Diversified and inclusive workplace: In 2018, they set a clear ambition to have a 50:50 gender
balance in leadership roles and 12% Black Asian and Minority Ethnic (BAME) representation
across their business by 2022.  Their aim is for their diversity to reflect the diversity of the
communities they serve. In 2018 Virgin Atlantic’s median gender pay gap was 30% while Virgin
Holidays’ pay gap was 23.1% (Corporate.virginatlantic.com, 2021).  They believe in treating all
of their people fairly, which is reflected in the fact that their analysis showed They do not have
an equal pay issue.

Charity and fundraising: Their collaborations with charities constantly seem to be important to
them. They have collected more than 9 million via the Virgin Atlantic Trust, Their private
charity that was established in 2003. In addition, They collect more than £100,000 each year
from Their workers (Albers and Rundshagen, 2020). They also the very first airlines to start a
charity campaign on aircraft gathering replacement cash and charitable foreign currency . The
Virgin Atlantic Foundation and other charitable organizations collect thousands of pounds per
month.

Conclusion
Virgin Atlantic is leading airline company operating in UK which is offering premium services
to its customers. Different external environmental factors are affecting their business operations
which has been discovered by PESTLE analysis. Their different types of leadership styles and
transformational leadership style is seemed to be the most suitable style for virgin Atlantic. Also
their CSR activities to the society are very impressive.

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Reference
Al Khajeh, E.H., 2018. Impact of leadership styles on organizational performance. Journal of
Human Resources Management Research, 2018, pp.1-10.

Albers, S. and Rundshagen, V., 2020. European airlines′ strategic responses to the COVID-19
pandemic (January-May, 2020). Journal of air transport management, 87, p.101863.

Ali, N.M., Jangga, R., Ismail, M., Kamal, S.N.I.M. and Ali, M.N., 2015. Influence of leadership
styles in creating quality work culture. Procedia Economics and Finance, 31, pp.161-169.

Bottasso, A., Bruno, M., Conti, M. and Piga, C., 2017. Competition, vertical relationship and
countervailing power in the UK airport industry. Journal of Regulatory Economics, 52(1), pp.37-
62.

Corporate.virginatlantic.com. 2021. Sustainability | Virgin Atlantic. [online] Available at:


<https://corporate.virginatlantic.com/gb/en/sustainability.html> [Accessed 4 July 2021].

Gandolfi, F. and Stone, S., 2018. Leadership, leadership styles, and servant leadership. Journal
of Management Research, 18(4), pp.261-269.

Hasan, M., Khan, M.N. and Farooqi, R., 2019. Service Quality Measurement Models:
comparative analysis and application in airlines industry. Global Journal of Enterprise
Information System, 11(2), pp.29-41.

Lee, S., Kim, B. and Ham, S., 2018. Strategic CSR for airlines: does materiality
matter?. International Journal of Contemporary Hospitality Management.

Lenoël, C. and Young, G., 2020. Prospects for the UK economy. National Institute Economic
Review, 252, pp.F10-F43.

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