Virgin America
VIRGIN AMERICA LANDS IN THE UNITED STATES
Virgin Group is the corporate umbrella for a large network of almost 300 different companies offering varieties of services including but not limited to telecommunications (virgin mobile), cable TV (virgin media), financial services (virgin money), fitness (virgin active), and soft drinks (virgin drinks). The most famous of them all is the Virgin Atlantic. Virgin Group is owned by European business tycoon, Richard Branson. Virgin America debuted in August 2007 with headquarters currently based in California. Their mission according to their company’s website (www.virginamerica.com) is “to make flying good again, with brand new airplanes, attractive fares, topnotch service, and a host of fun, innovative amenities that are reinventing domestic air travel”. The United States of America is the largest single market in the world with an expected annual growth rate of 3.4%. It also has a demand of passengers traveling by air. The airline industry was regulated by the government until 1978, when the deregulation act eliminated price and entry regulation of the U.S. airline industry. It led to the privatization of many airlines and inflow of low cost carriers into the market. Despite that, the Government still continues to play a role in the deregulation and taxation of the industry through fuel duties and ticket prices that includes taxes and security fees. This degrades the airlines profit margin hence, passing the cost to consumers. Part of the deregulation by the Government requires that a company be 75% owned and controlled by a U.S. citizen before been awarded an operating certificate. Richard Branson saw this as a trade barrier which made him to set up Virgins airlines International (VAI) Partners – a U.S. based subsidiary of the U.K. based Virgin Group. VAI owns 75% of the capital stock and appoints two third of the board of directors. Virgin Group has the remaining 25%. Virgin Group reinvests its profit back into
Virgin Group is the corporate umbrella for a large network of almost 300 different companies offering varieties of services including but not limited to telecommunications (virgin mobile), cable TV (virgin media), financial services (virgin money), fitness (virgin active), and soft drinks (virgin drinks). The most famous of them all is the Virgin Atlantic. Virgin Group is owned by European business tycoon, Richard Branson. Virgin America debuted in August 2007 with headquarters currently based in California. Their mission according to their company’s website (www.virginamerica.com) is “to make flying good again, with brand new airplanes, attractive fares, topnotch service, and a host of fun, innovative amenities that are reinventing domestic air travel”. The United States of America is the largest single market in the world with an expected annual growth rate of 3.4%. It also has a demand of passengers traveling by air. The airline industry was regulated by the government until 1978, when the deregulation act eliminated price and entry regulation of the U.S. airline industry. It led to the privatization of many airlines and inflow of low cost carriers into the market. Despite that, the Government still continues to play a role in the deregulation and taxation of the industry through fuel duties and ticket prices that includes taxes and security fees. This degrades the airlines profit margin hence, passing the cost to consumers. Part of the deregulation by the Government requires that a company be 75% owned and controlled by a U.S. citizen before been awarded an operating certificate. Richard Branson saw this as a trade barrier which made him to set up Virgins airlines International (VAI) Partners – a U.S. based subsidiary of the U.K. based Virgin Group. VAI owns 75% of the capital stock and appoints two third of the board of directors. Virgin Group has the remaining 25%. Virgin Group reinvests its profit back into