Abstract

The case is about Virgin America, a California-based airline that was launched in 2007. The airline aimed to reinvent domestic air travel in the US. The case describes Virgin America’s journey to becoming a leading domestic airline with a focus on innovation which helped it create a strong and unique brand, get a loyal following, and also a host of travel industry best-in-class awards for its service innovations. However, the company was struggling to remain competitive in the dynamic global aviation industry. It had struggled financially since its launch and had reported more than US$670 million in losses over the first five years of its existence before turning a profit. In early 2016, Virgin America was acquired by Alaska Airlines, which had a distinctive brand of its own. This sparked speculations on whether the Virgin America brand would survive.

Learning Objectives

The case is structured to achieve the following Learning Objectives:

• Evaluate the strategies adopted by the airline to build a highly-differentiated brand image and a loyal customer base
• Analyze the competitive strategy adopted by Virgin America as a late entrant into the US airline industry
• Discuss the importance of innovation in a competitive industry

Keywords

Brand management, Branding: Brand image, Brand personality, brand experience, Competitive strategy, Innovation, Differentiation, Service innovations, Services marketing, Business strategy, Positioning, Digital, Social media