Virgin Blue

Essay by onglt1University, Bachelor's April 2006

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Company background

Virgin Blue, one of the airline companies in Australia, which provides lost cost, low fare domestic airline, offering frequent passenger services on routes between all of the Australia's major cities, is one of the subsidiaries of the Virgin Group that established on 3 August 2000 with two aircraft initially offering seven return flights a day between Brisbane and Sydney. And this has been expanded to cover the major cities in Australia.

By now, Virgin Group's holding in Virgin Blue has been reduced via a sale of half interest to Patrick Corporation, and later by a public float. By the closure of the offer, Patrick Corporation has hold 62% of the company, giving it control. And Virgin Blue retains a 25% share.

According to Virgin Blue, the objective of launching the company is to develop a Virgin branded, low cost, low fare carrier operating in the Australian domestic aviation market.

In fact, Virgin Blue has been become one of the fast growth rate airline company in the world that grew rapidly to become second domestic carrier in Australia. Until 2003, Virgin Blue's overall passenger share of the total domestic market of Australia was more than 28% and available capacity share was 27% (Virgin Blue Prospectus, p.57, 2003).

The business model adopted was similar to those successful low cost carriers in Europe and North America, such as Southwest Airlines and Ryanair. Similarly, Virgin blue operates only one type of aircraft, the Boeing 737 series, of which it currently has 49 and plans to acquire more and provides in-flight meals and printed tickets in favour of selling food on board and using telephone and internet booking systems to eliminate the costs (

In September 2003, Virgin Blue announced its wholly-owned subsidiary, Pacific Blue to offer a...