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This report illustrates two ways that Virgin Atlantic Airway uses to invest successfully in Africa. The two aspects are business and local directions. These are based on company’s website, academic journals and newspapers. Business means companies should catch the opportunity to expend their business. Local means the company should be concerning about the local economic situation and the local people’s lifestyle, in order to let the local accepting them invest in Africa, therefore makes that Virgin Atlantic Airway invest in Africa successful.
The two ways used by Virgin Atlantic Airway have been mostly successfully invest in Africa.
If Virgin Atlantic Airway keeps considering about these two aspects to their investment program, it can make their investment program more successful than their current situation. 1. Introduction Virgin Atlantic Airway is one of the most famous airline giants in the world. Its successful investment in Africa is an important essential that makes this company reaches this rank. 1. 1 Background Virgin Corporation was founded in 1968 by Richard Branson in the United Kingdom.
Until 2012, the Virgin Corporation employed almost more than 50,000 people over 50 countries in the world. Global branded revenues of ?
15bn ($24bn). Virgin Corporation is a transnational private company. In 1970, the Virgin Group has gone on to grow successful businesses in sectors ranging from mobile telephony, travel, financial services, leisure, music, holidays, health to wellness. Virgin Atlantic set up in 1984. The company has become Britain’s second largest carrier serving majority of cities in the world. In 1999. Virgin Atlantic started cooperation with South Africa Airways.
At the same time, Virgin added a new airline flight to South Africa. In 2004, Nigerian investors and Virgin Group founded in Virgin Nigeria.
However, Virgin, the major shareholders announced their withdrawal from the partnership in 2009. 1. 2 Purpose The purpose is explaining how successful Virgin Atlantic Airway investment is in Africa. 1. 3 Methods The method of this report is based on business and local perspectives to prove that Virgin Atlantic Airway makes a successful investment in Africa. 2. Findings and Discussion 2. 1 Business The growth rates of a number of African countries were achieving impressive levels with consistency. When transnational corporations choose to invest in Africa, business opportunity is one of the biggest reasons.
In 2009, Virgin Atlantic Airway found a proper time when they moved into Africa. The economic achievements after Virgin Atlantic Airway moved in Africa included: Table 1 From 2003—2007 Virgin Atlantic Financial Y/E April 2003 2004 2005 2006 2007 PAX NO (cal year) 3. 8m 4. 3m 4. 4m 4. 6m 5. 1m TURNOVER ?1401m ?1272m* ?1630m ?1912m 2140m PROFIT/(LOSS) ?15. 7m ?20. 9m* ?20. 1m** ?41. 6** ?46. 8 (Source: From “Virgin Atlantic Airways – Company Overview,” n. d. ) The table shows Virgin Atlantic financial position from 2003 to 2007, it was increasing. From 1999, Virgin Atlantic Airway started investment in Africa.
They found a new space to expand their business. From Table 1, from 2003 to 2007, their profit obviously increased from ? 15. 7m to ? 46. 8m. Especially, in 2006, the profit of Virgin Atlantic Airway almost doubled that in 2005. Furthermore, at the same time, Virgin Atlantic Airway invested in Nigeria which is one of the important reasons for the fast increase in company profit. Virgin Atlantic Cargo today announced revenues for the 2010/2011 financial year increasing 39 per cent to A? 224. 4 million (“Virgin Cargo sees 39% ,“n. d. ). In EMEA, sales increased 47 per cent over 2009/10.
(“Virgin Cargo sees 39%,” n. d. ) In February 2009, SAA and Virgin Atlantic expanded their existing code-share. In March 2009, SAA offered additional flights and increased capacity on the route between Johannesburg and Mumbai. (“Market Overview – Travel,” 2010) Table 2 Overall ownership 51% Nigerian, 49% Technical Partner (Virgin Atlantic) 49% Virgin Atlantic Technical Partner (owned 51% Virgin, 49% Singapore Airlines) 11% Capital Alliance Leading private equity investor blue-chip investors/management 10% Dantata Leading industrial/services conglomerate based in Muslim North 4% Standard Trust Bank
Largest Nigerian bank, “new generation” strategy 26% Other Nigerian institutional investors 17 other Nigerian insurance companies, banks, corporates, private equity firms. (Source: From“Investment Environment in Africa,” 2005) This Table explains that the percentage of Virgin Atlantic invested in Nigeria. Virgin Atlantic is the major share-holder in Virgin Nigeria. In 2009, Virgin Atlantic Airway quitted from Virgin Nigeria. Virgin investment in Nigeria announced failed. However, Virgin Atlantic Airway invest in Africa had failed in some situation. In 2009, Virgin Atlantic Airway quit from Virgin Nigeria.
From Table 2, Virgin was the major share-holder in Virgin Nigeria, Akpo. E (2013) states,” external factors include but are not limited to poor infrastructure in Nigeria, conflicts with government’s aviation authorities as regards use of facilities and poor profit turnout”(p. 6). It means Virgin has a negative factor in choosing a place. Thus, Virgin Atlantic Airway should be concerning that knows what other international investment companies method about investment and management. If they have strengthen communication between company and the company, they can avoid failed in Nigeria and their business space in Africa will wider than now.
2. 2 Local The company plans to move into another country, the leader will consider the local problem first. When the local support the company that means the company’s investment program has succeed and has a good beginning. In 2004, Virgin Atlantic Airway invested in Nigeria, and the leader of Virgin has considered this issue. Lumess Talent Acquisition has executed across all of the business by Virgin Atlantic, which received 130,000applications from 2,200vacancies advertised every year (“Virgin Atlantic uncovers the best talent and cuts time to hire by 20%” n. d. ).
Virgin’s investment in Africa started from 1999, Virgin Atlantic Airway got the supporting from local that Virgin Atlantic Airway had received 130,000 applications for 2,200 vacancies advertised annually. This way boosts international economic cooperation, and promotes the relationship between investment company and local. Moreover, investment in Africa has promoted the tourist industry of Africa because it can bring many business chances and enhance local economic. Brand new air crafts and a mix of expatriates and local employees was commenced operations by Virgin Nigeria (“The birth, the rise and the fall of Virgin Nigeria” 2013).
High traffic growth occurred because the emergence of budget airlines and the booming economic climate in South Africa (“Market Overview – Travel” 2010). On the other hand, Virgin Atlantic Airway invested in Africa solve the problem of employment. Akpo. E (2013) states, “Virgin Nigeria commenced operations with brand new air crafts and a mix of expatriates and local employees” (p. 6). Recruitment of locals is one of the reasons that Virgin Atlantic Airway gets support from the local. Therefore, Virgin Atlantic Airway’s method is right to have achievement in Africa for the company.
In this aspect, Virgin Atlantic Airway should be keeping the balance of local employees and service quality. If they perform regular inspections every month, they will solve the problem between local employees and service quality and keep of it. 3. Conclusion This report clearly states that Virgin is almost successful to invest in Africa. The reason is that they catch the opportunity to expand their business and consider about the local situation of Africa. Virgin can provide working opportunities to the local, and help the economics of Africa growth.
Overall, Virgin is one of the best examples to demonstrate how well a company investment in Africa. 4. Recommendation and implementation As a company, investment is one of the most important programs. Companies should know about how to catch the business opportunities and cater for the local. Therefore, Virgin Corporation attaches importance to business and local. They catch a good opportunity for the investment program. However, in order to make Virgin Corporation become more successful investment in Africa.
Accordingly, the following recommendations are made: If Virgin Corporation concerns about communicating with other local air company, the company will know more about the local situation and find more new partners. Virgin should not only communicate with their work partner because they need expanding in the future. If Virgin Corporation improves the ability of regulating conflict and keeping the balance with inner and outer. Virgin Atlantic Airway will not withdraw from Virgin Nigeria. For example, having a regular assignment to the employees can avoid poor employee attitude as a minus.
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