Virgin Atlantic's Successful Investment Strategies in Africa

The report demonstrates how Virgin Atlantic Airways successfully invests in Africa through two main strategies: focusing on business opportunities and understanding local dynamics. According to information from the company's website, academic journals, and newspapers, successful investment in Africa involves both expanding business operations and considering the local economic conditions and lifestyle of the people. By integrating these two approaches, Virgin Atlantic Airways has achieved considerable success in its investments in Africa.

If Virgin Atlantic Airways concentrates on these two elements within their investment strategy, they can improve the success of their current position.

1. Introduction: Virgin Atlantic Airways is a renowned international airline with successful investments in Africa that have greatly bolstered its reputation.
1.1 Background: Established in 1968 by Richard Branson in the United Kingdom, Virgin Corporation had more than 50,000 employees operating in 50 countries globally until 2012. Global branded revenues totalled ?.

Virgin Corporation, a multinational private company, has achieved success in multiple industries such as mobile telephony, travel, financial services, leisure, music, holidays, health, and wellness.

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A notable accomplishment was the founding of Virgin Atlantic in 1984 which has grown to become the second largest airline in Britain with operations in numerous cities globally. In 1999, Virgin Atlantic collaborated with South Africa Airways to introduce a new flight route to South Africa. Furthermore, Nigerian investors joined forces with the Virgin Group in 2004 to establish Virgin Nigeria worth around $24bn.

Virgin, the main owners, decided to pull out of the partnership in 2009. This report aims to analyze Virgin Atlantic Airways' successful investment in Africa by considering both business and local viewpoints.

The report highlights how the growth rates of many African nations have been consistently high, making Africa an appealing investment destination for multinational companies.

Virgin Atlantic Airways showed dedication to Africa through investments in 2009, leading to economic prosperity. This choice is backed by Table 1, displaying the company's financial progress between 2003 and 2007. Virgin Atlantic saw an increase in passengers, revenue, and earnings during this period. It should be noted that the airline began investing in Africa as early as 1999 (Source: "Virgin Atlantic Airways - Company Overview," n.d.).

They discovered a new location to grow their business. According to Table 1, their profit rose significantly from ? 15.7m to ? 46.8m between 2003 and 2007. Specifically, in 2006, Virgin Atlantic Airway's profit nearly doubled compared to 2005. Additionally, the company's investment in Nigeria played a crucial role in the rapid profit growth. Virgin Atlantic Cargo reported a 39% increase in revenue for the 2010/2011 financial year, reaching A? 224.4 million ("Virgin Cargo sees 39% ," n.d.). Sales in EMEA also saw a 47% increase from the previous year.

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.
Table 2 Overall ownership:
51% Nigerian,
49% Technical Partner (Virgin Atlantic),
49% Virgin Atlantic Technical Partner (owned 51% by Virgin, 49% by 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

The largest bank in Nigeria is implementing a "new generation" strategy, with 26% ownership by Nigerian institutional investors and 17 other Nigerian insurance companies, banks, corporates, and private equity firms. Virgin Atlantic previously had a major stake in Virgin Nigeria but exited the investment in 2009. Despite encountering difficulties with its investments across Africa, Virgin Atlantic's endeavor in Nigeria was not successful.

Virgin Nigeria, Akpo. E (2013) reported that Virgin was the major shareholder in Virgin Nigeria, with external factors such as poor infrastructure in Nigeria, conflicts with government aviation authorities, and poor profit turnout affecting their investment decisions (p. 6). This indicates that Virgin may have negative influences in their location selection process. Therefore, Virgin Atlantic Airways should take note of how other international investment companies handle their investments and management. By improving communication within the company and with other organizations, they can avoid failures in Nigeria and expand their business presence in Africa.

2. 2 Local The company plans to expand into a new country, with the leader prioritizing local considerations. Successful local support signifies the company's investment program is off to a good start. In 2004, Virgin Atlantic Airway invested in Nigeria, with Virgin's leader addressing this issue. Lumess Talent Acquisition has been implemented throughout all of Virgin Atlantic's business operations, resulting in 130,000 applications received from 2,200 vacancies advertised annually ("Virgin Atlantic uncovers the best talent and cuts time to hire by 20%" n. d.).

Virgin's foray into Africa began in 1999 when Virgin Atlantic Airways received support from the local community, leading to 130,000 applications for 2,200 vacancies advertised annually. This collaboration has enhanced international economic cooperation and strengthened the relationship between the investment company and the local community. Furthermore, investing in Africa has stimulated the tourism industry by creating numerous business opportunities and boosting the local economy. Virgin Nigeria launched operations with new aircraft and a diverse team of expatriates and local employees ("The birth, the rise and the fall of Virgin Nigeria" 2013).

The high growth in traffic was due to budget airlines and a thriving economy in South Africa ("Market Overview - Travel" 2010). In contrast, Virgin Atlantic Airways made investments in Africa to address employment issues. Akpo, E (2013) reported that Virgin Nigeria started operations with new aircraft and a mix of expatriates and local staff. By recruiting locals, Virgin Atlantic Airways gained support from the community. This approach has contributed to the company's success in Africa.

Virgin Atlantic Airway should maintain a balance between local employees and service quality. Conducting monthly inspections will help resolve issues between local employees and service quality. In conclusion, this report highlights Virgin's success in investing in Africa by capitalizing on business expansion opportunities and considering the local context of Africa. By providing job opportunities to locals, Virgin can contribute to the economic growth of Africa.

Virgin Corporation is a prime example of successful investment in Africa, emphasizing the importance of understanding business opportunities and catering to the local market. To further enhance their success in African investment, it is recommended that companies prioritize investment programs and strategic implementation.

Therefore, it is recommended that Virgin Corporation prioritize communication with other local air companies to gain insight into the local situation and potentially discover new partnerships. In addition, Virgin should focus on improving conflict resolution abilities and maintaining a balance between internal and external relationships to prevent the withdrawal of Virgin Atlantic Airways from Virgin Nigeria. Providing employees with regular assignments can also help prevent negative attitudes.