California Management Review
California Management Review is a premier academic management journal published at UC Berkeley
by Adam Berman and Frank C. Schultz
This case illustrates how Virgin America, founded in 2007, craved a niche of dedicated urbanite-flyers in the highly competitive -- but staid -- airline industry by redefining the passenger flying experience. In 2012, approximately 20 percent of Virgin America's passengers accounted for 80 percent of the airline's revenue. The A case begins with Virgin America's launch in August 2007, when the airline began with transcontinental flights between New York City and Los Angeles and San Francisco, and then goes through August 2012, after the airline had expanded into 19 market destinations across the United States and Mexico but was still unprofitable. In the A case, the dynamics of the airline industry, customer experience and loyalty, and niche marketing are explored. The A case ends with several questions, including those asking students to evaluate Virgin America's business model and to identify the action steps needed to reach profitability. The B case then covers Virgin America during 2013 and the decisions Cush and his management team made to make the airline profitable that year, an important financial milestone prior to any possible IPO. The C case concludes with Virgin America's successful IPO in November 2014. Please note: This case also has (B) and (C) supplements available.
Pub Date: Jul 14, 2016
Discipline: Entrepreneurship
Subjects: Organizational behavior, Startup, Decision making, Management styles, Entrepreneurship, Leadership, Risk management, Organizational culture, Marketing, Market positioning, Start-ups
Product #: B5828-PDF-ENG
Industry: Airlines
Geography: United States, California
Length: 21 page(s)
