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How successfully does Virgin Atlantic Airways, Investor Relations Officers communicate performance and success to other key Virgin Stakeholders? Virgin Atlantic Airways Investor Relations Officers necessitate the requirement to communicate performance not only to shareholders but also to all Virgin Atlantic stakeholders. Virgin Atlantic’s performance and success can be determined by flight efficiency in relation to runways, customer sales/tickets purchased destinations and Jets supplied. ‘Stakeholder analysis is a clear way of defining those groups and individuals who have a significant relationship with an organisation and those with a vested interest in organisations operations’, Tench and Yeoman’s (2009, pg. 105). Virgin Atlantic has a large quantity of stakeholders and it is the Investor Relation Officers job to communicate information what they know best to everyone involved in the Organisation. To get the voice of Virgin Atlantic heard the Investors need to begin by setting out who to communicate to and how. The Virgin Atlantic stakeholder map (see appendix a) gives a detailed list of who the stakeholders are. Obviously, the main target for the investor relations team is investors, but every other stakeholder group will be interested to some degree about how the company is doing in terms of financial performance. The second part to this process will be determining which channel is used to communicate with each stakeholder group. To successfully communicate with Shareholders in an Organisation, the most effective way is through an annual report. The law requires this; however, most Organisations go the extra mile to reveal their performance but also involve their Corporate Social Responsibility. Financial PR increasing importance is reflected in the Economist statement: ‘to keep share price up, it is no longer enough merely to have a strategy. The strategy also needs to be articulated smartly as any manager at BT, Ford or Marconi tell you,’ (The Economist 2001:75). This suggests Organisations have increasing pressure to develop their annual reports to the highest standard. As the investor relations team is aiming at keeping investors informed, who the investors are is crucial. In the case of Virgin Atlantic, this is actually quite easy, as it is not listed on a stock exchange, and is owned by only two investors- the Virgin Group and Singapore airlines. So, there is no legal need to publish an annual report. That said, other stakeholders need to know about the organisation's financial performance, which the Investors should communicate efficiently. Cultip et al (1994) 7 c’s of
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Communication 5) Channels: different channels should be used for reaching different target audiences. Different channels are associated with different values and this should considered by the public relations practitioner.’ This emphasises the need to use the correct channels to communicate effectively to each stakeholder group as the wrong channel may cause the audience to receive the information in the right form.
Customers Customers are an important stakeholder in your organisation as they are the key group to benefit from the organisation as you aim to sell your product towards and drive your sales to result in great performance and overall profit. As customers drive the sales of an organisation, they have the right to know how well you are doing, as they are a contributing factor to performance. The investors of Virgin Atlantic use different channels to communicate with their customers. ‘The internet continues to gain ground as the preferred means for companies to manage registered shareholders accounts’ (trade journals, 2003), even though this is aimed towards providing financial information online for shareholders via annual reports, this also relates to using the internet as an effective channel to communicate services. Virgin Atlantic communicate most successfully with stakeholder group by using channels such as their online travel website (www.virgin-atlantic.com), blogs, social media and the Virgin group website as a whole (www.virgin.com). The Virgin Customers who travel with them can find information in terms of performance on the travel website. Assessing the depth of information (figure1) the website provide for Customer stakeholders, shows Virgin only use information in regards to facilities, upper class on board services, operation and biofuels. This may seem like a variety of accomplishments, however it does not measure the values or sales in performance that customers can evaluate, for example how well they are doing in contrast to last years sales to compare performance. Customers can
Figure 1: History of Virgin Atlantic’s success
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be directed to the ‘our fleet’ section of the Virgin Atlantic website to see the quantity of airplanes Virgin fly and can take a look at the capacity and seating arrangement. Customers can also be seen as a part of the Community stakeholder group, with this is mind Customers will care about the environment around them, however are not supplied with a channel to provide performance information. Customers care about how well a company are doing as they require a stable relationship with an airline to secure their customer service to Virgin Atlantic and come back again. Customers rely on performance information to ensure they can trust a business and if they are not supplied with performance material they may doubt the business and go elsewhere.
Suppliers Virgin Atlantic provides Virgin Cargo fuels however have recently partnered with Boeing saying ‘we have partnered with Boeing to help us in our quest to become the most sustainable airline in the world. We ordered 15 787-9 Dreamliners in April, which burn around 27% less fuel per passenger than the A340-300 they will replace. We will also be doing a biofuel demonstration with Boeing, Virgin Fuels and engine maker GE Aviation during 2008 which will be the first worldwide by a commercial airline.’ Figure 2: http://www.facebook.com/virginatl antic
Other partnerships they have made are with Fair-trade, by supplying this as alternative Tea on-board flights and have also teamed up with Tesco and their Club card incentive, to earn air miles. However these
new partnerships and supplier are not provided with their own channel of communication with Virgin Atlantic in ways that other stakeholders are. With this in mind, lack of communication with a group of stakeholders can be crucial to building trust and furthering a relationship for future business. Suppliers are just as important as any other stakeholder and need to be informed on performance and success if they are contributing to the business, for example; Boeing will be relying on Virgin Atlantic delivering on their
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performance as this is vital to their performance too. To determine the performance of Virgin Atlantic, the supplier must be provided with a means to view this information; however the Virgin Atlantic Investors fail to do so.
Media The most significant media effect is seen to be the role that media play in an audience’s Figure 3: Press Office page
social construction of meaning. The media offer their messages and meaning to audiences. It is then up to the audience how they read the message (McQuail 2000, p.g.228). The media
is
stakeholder
an
influential
that
can
source further
and your
exposure. If they are given the right information they can cover this via their resources. To communicate with the media to cover your news many elements can be used such as blogs, websites or magazines. Virgin
Atlantic
has
a
successful
communication strategy with the media as they provide them many options to view their performance and success. Primarily they include a Press Office page (figure 3) on their website for journalists to turn to. Here they provide journalists with press releases with performance information regarding new fleets, additional services and worldwide success. This appears to be a successful way to communicate with journalists as it cuts the function of telephoning or email. Another useful channel for Media stakeholders to access is ‘Richard’s Blog’ via the Virgin Groups website. The blogs supply information on what Virgin as a whole is doing and more specifically what Virgin Atlantic are doing. These blogs can provide easy reading information for all members of the Media stakeholder group whether they are personal bloggers, online journalists or local/national press. Information that can be found relates to Airline Staff contributions, landing slots and expansion as a whole. This means of communication can be
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easily retrieved, with a flavour for Virgin Atlantic with a visual outlook; however lacks indepth information on facts and figures about performance overall.
Public Affairs S, Cain (2009, Pg. 174) says stakeholders within Publics affairs are those who are ‘involved in the public policy-making, legislation and regulation, which may affect the interests of organisations and their operations.’ Virgin Atlantic must communicate with these organisations and regulators to provide with the evidence to support how they implement their rules in business. Figure 4: Flying High CSR Report
Law ensures all requirements are kept to by an organisation and enforces
regulations.
Virgin
Atlantic
communicates with stakeholders from the Public affairs group, regarding performance mainly
through
a
Corporate
Social
Responsibility PDF file available from the Virgin Group website. The 2011 CSR report informs Politicians and Regulators with information about Reduction targets and history for example ‘Virgin Atlantic were the first commercial airline to use biofuel in demonstration
flights.’
Boasting
these
statics, Virgin can successfully communicate basic information through this channel to show their achievements and what they set out to accomplish. Building the reputation of the airline with politicians is crucial and financial performance is imperative. Virgin Atlantic has a high media profile and Branson has views on things like landing slots, competition etc. that are influential, so keeping the image of Virgin Atlantic as successful is important to its public affairs work as they need to monitor the strengths and weaknesses of Virgin Atlantic, in terms of environmental performance. This particular means of communication supplies Public Affairs stakeholders with a great amount of information of Virgin Atlantics performance with statistics they would find
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successful and satisfying. These statistics include: Emissions, Global policy, fuel and Operational efficiencies. Another group within the Public Affairs stakeholders are activists, who are important stakeholder group as they are passionate about the environment, especially when it comes to the Airline industry. Virgin Atlantic can use their CSR report as a key channel to communicate with activists as it contains all the essential information they require to show how ‘green’ they are. The CSR report gathers information on the success of Virgin Atlantic including fuel types and emission’s as touched upon above. An additional channel that communicates to Public Affairs stakeholders is the Environment section on their official website. This specific channel is not effective in itself as it lacks any Figure 5: Environmental page on Virgin Atlantic website
precise information on the website. Furthermore a sustainability report can be downloaded through this channel which gives a detailed report on aviation. As well as producing information regulators or activists are passionate about, Virgin Atlantic also provide information on how ticking all the boxes in reference to aviation through emissions, waste, water and supplies etc. show how these resources have gained strengths in the business and helped
develop
performance
and
success.
This
downloadable report gives Virgin Atlantic a positive image on sustaining Publics Affairs stakeholder’s needs and likewise successfully communicates to them.
Employees and Community The Employees and Community of Virgin Atlantic can withhold the reputation and face of Virgin Atlantic as well as be the main stakeholder to be effected by them also. As a proportion of the Community stakeholders will be the surrounding local, national or worldwide communities of the Airports Virgin fly from, they call for awareness of the performance of Virgin Atlantic concerning building work, influence on Community events, Carbon emissions and expansion, which all equate to the overall performance Virgin Atlantic
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aim to achieve. With these factors in mind, the Community require the performance and success information of Virgin Atlantic to ‘give the go ahead’ or agree to any plans they have. ‘An institutions relationship with its neighbours in its community are crucial because these neighbours supply the organisations workforce, provide an environment that attracts or fails to attract talented personnel…if angered impose restraints on the institution,’ Cutlip et al (1985, p.g.52). Employees need to feel secure in their job and having information supplied to them via specific channels will make them feel safe, to know Virgin Atlantic are doing well and keeping a strong performance to secure their jobs. In addition employees of the local community for example, Gatwick Airport community will also be interested in the work of Virgin Atlantic as it may affect the way they work. This can be seen through a personal experience in Gatwick Airport, as Virgin Atlantic set out to change its conveyer belt system, and were required to move from their original zone to desks one zone along. Virgin Atlantic faced a communication problem as passengers would be directed by signs to the original zone. Virgin Atlantic failed to communicate with their passengers and finally called in an outside team to communicate with their customers, from the Airport community employees. This affected the way the outside team worked and all employees of the airport as passengers/customers would approach any member of the airport for directions. As Virgin Atlantic failed to communicate the situation, it caused further problems creating a domino effect on the community and employee stakeholder group. This situation proves how powerful a simple communication channel can easily solve a problem, where stakeholders need information to resolve a problem. Furthermore, Virgin Atlantic supplies a Corporate Social Responsibility (CSR) report, in PDF form on the Virgin Group website for Employees or members of a Community to access. Firstly, this channel of communication can be hard to find from the main website itself, unless ‘Virgin Atlantic CSR report’ is typed into a search engine to locate this information itself. Figure 6: Google Search engine results. www.google.com
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When directed to the Virgin Group website, the CSR report is available under the name ‘flying high.’ This PDF contains highlights of Virgin Atlantic and other Virgin Group’s airline Figure 7: CSR Report
companies.
This
Community
and
gives
the
Employee
stakeholders the opportunity to investigate Virgin Atlantics social responsibility activities in terms of fuel
and
emission
which
are
important. Virgin refers to the local Airport Communities personally in their CSR report (figure 6). This part of the report communicates to Community Stakeholders the performance of Virgin Atlantic over a period of time, showing how Investor Relations can transfer success, without mentioning any financial factors. On the other hand Employees will feel satisfied to know Virgin Atlantic are growing as a business and increasing to secure their jobs, in terms of acknowledging Virgin’s performance through expansion and use of resources. For example a more visual channel Virgin Atlantic has communicated to the worldwide community and Employees is through a map (figure 8) on the Virgin Groups Official website called ‘What Virgin is up to around the World.’ This map gives a vague outlook of how Virgin Atlantic is Figure 8: ‘What Virgin is up to around the World’
contributing to the Carbon footprint, fuel use and value of employee
contribution
estimation.
This
again
communicates what they are doing through performance and is an extra way to tell Employees
and
the
successful Virgin Atlantic is.
Community
how
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Conclusion The research concludes Virgin Atlantic Investor Relations team communicate Performance successfully to only a handful of stakeholder groups, suggesting some stakeholder groups necessitate information more than other groups. All stakeholder groups are as important as another and require a channel to provide information, proving that Virgin Atlantic do not communicated effectively to all stakeholder groups as a whole. The communication channels are seen mainly through the Virgin Atlantic and Virgin Group Official websites, showing Virgin Atlantic are lacking further channels and resources of information to communicate with. The content in these channels communicate very effectively the performance Virgin Atlantic has undertaken, without producing any major financial statistics they could illustrate, if they obtained an annual report. The research taken suggests the Investor Relations team needs to begin to address their channels of communication when it comes to communicating performance and success to all stakeholder groups, the content of information incorporates positive and effective material, but needs to be communicated to all stakeholder groups and not just a minority.
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References Tench and Yeomans, Exploring Public Relations, 2nd edition, (2009 pg.105), Pearson Haig, M, E-PR, The essential guide to Public Relations on the Internet, (2000 pg.120), Kogan Page limited, London Wragg, D, Targeting Media Relations, (1993. Pg.101), Kogan page limited, London Cain, S, Key Concepts in Public Relations, (2009, pg. 174), Palgrave Macmillan, Hampshire, England Editorial Staff, 2003, Trade Journals, Investor Relations business, [online], 1, [accessed 15/12/2011] Available from search.proquest.com
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Appendix A.
SHARHOLDERS/ INVESTORS
CUSTOMERS
MEDIA
COMMUNITY
SUPPLIERS REGULATORS
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SHAREHOLDERS
THE VIRGIN GROUP
RICHARD BRANSON
www.virgin.com
SINGAPORE AIRLINES
http://www.singaporeair.com/SAAflow.form?execution=e2s1
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COMMUNITY
AIRPORT COMMUNITES SURROUNDING AIRPORT COMMUNITIES
http://www.gatwickairport.com/ http://www.heathrowairport.com/ http://www.orlandoairports.net
http://www.horleysurreytc.gov.uk/ http://www.holidayextras.co.uk/ in-and-around-heathrow.html http://www.crawley.gov.uk/stell ent/idcplg?IdcService=SS_GET_P AGE&nodeId=25
http://globalvoicesonline.org/20 11/01/03/cuba-las-charangasde-bejucal/
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CUSTOMERS
SOCIAL NETWORKING CUSTOMERS
www.twitter.com
ONLINE/WEBSITE CUSTOMERS
www.facebook.com www.tumblr.com www.flickr.com www.virgin-atlantic.com www.expedia.com
TRAVEL
http://www.statravel.co.uk/travel-helpnew.htm www.tripadvisor.com
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PUBLIC AFFAIRS
REGULATORS
http://www.caa.co.uk/default.aspx?catid=503 http://www.faa.gov/regulations_policies/ http://www.hse.gov.uk/pubns/hsc13.pdf http://www.asa.org.uk/
ACTIVISTS
http://aviationjustice.org/tour/ http://www.airportwatch.org.uk/ ?p=4656 http://www.planestupid.com/cat egory/blog-tags/virgin http://www.1010global.org/uk http://uk.oneworld.net/guides/e nvironmentalactivism
LEGISLATORS
http://www.infrastructure.gov.au/aviation/le gislation/index.aspx http://www.aviationlaw.eu/ http://www.hg.org/aviation-law.html
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MEDIA RELATIONS BLOGS
http://www.smartplanet.com/blog/tr ansportation/virgin-atlantic-to-usewaste-gas-to-fuel-its-planes/1046
JOURNALSTS
http://blog.vtravelled.com/ http://news.yahoo.com/blogs/techn ology-blog/virgin-atlantic-promiseshelp-develop-eco-friendly-jet011916875.html
www.telegraph.co.uk www.dailymail.co.uk
http://blog.bookingbuddy.co.uk/virgi n_atlantic/index.html
http://techblog.smashing.net/2011/1 1/01/virgin-atlantic-launches-allnew-economy-service/ http://www.aerotechnics.co.uk/blog/index.php/interi ors-contract-with-virgin-atlanticairways/
ONLINE MAGAZINES
http://www.ft.com/magazine
WEBSITE
http://uk.cision.com/Resources/Social-MediaIndex/Top-UK-Social-Media/Finance-Week/Top25-UK-Finance-Magazines/ - below lists came from this website – list from the top 25 http://www.cimaglobal.com/ http://www.theneweconomy.com/
http://www.airlinequality.com/Airlines/Web _menu.htm http://us.makemytrip.com/traveltips/links.ht m http://www.travelandleisure.com/articles/air -travel-update-best-new-airline-websites www.tripadvisor.com
http://www.moneyweek.com/
http://fw.ifslearning.ac.uk/home.aspx http://www.theforwardgroup.com/#
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SUPPLIERS
VIRGIN CARGO
BOEING
http://cargo.virginatlantic.com/gb/en/index.html http://www.cargooverseas.co.uk/index.php/spotlight-onsuppliers/61-virgin-atlantic-cargo-a-supplierof-contracted-services-to-lagos. (Virgin also supply to other companies such as overseas transport)
http://www.boeing.com/ http://www.virginatlantic.com/en/gb/allaboutus/ourfleet/inde x.jsp
FAIRTRADE TESCO CLUBCARD
http://www.fairtrade.org.uk/work/news/ne ws.aspx http://www.virgin.com/people-andplanet/blog/fairtrade-at-virgin-wines
http://www.tesco.com/clubcard/clubcard/ http://www.tesco.com/clubcard/deals/brow se.aspx?N=4294967217+4294966541 http://www.virginholidays.co.uk/info/about/ tescoclubcard/
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Appendix B Debate Questions “All Publicity is Good Publicity” On behalf of Virgin Atlantic Investor Relations team, I am for the motion “All Publicity is Good Publicity.” We feel that all publicity can effective your business in relation to sales and performance. As we have such a big franchise in itself we have gained loyal customers and know that any bad publicity can be potentially be good publicity in the long run when any issue can be turned into a good outcome. For example in autumn 2008, Virgin Atlantic launched their new TV Advert campaign, an entertaining advert, boasting their cabin crew and on-flight experience. After the press publishing bad news stories about this advert, in relation to it being sexist the ASA has decided that there were no grounds for a formal investigation and said that it 'considered that the ad was unlikely to be seen as sexist or derogatory towards women or to cause serious or widespread offence.' Furthermore there has been no drop in sales and performance, showing that bad publicity only produces free publicity for the company, leading to more interest and in some cases benefiting the company as a whole. Niall Firth, Niall Firth, Virgin Atlantic cabin crew ad 'is sexist and offensive to women', claim viewers, 2011 [accessed:17/12/2011],http://www.dailymail.co.uk/news/article-1140618/Virgin-Atlanticcabin-crew-ad-sexist-offensive-women-claim-viewers.html#ixzz1gzvsw7xF “What the public thinks does not always matter” From an Investor Relations point of view what the public thinks does always matter and therefore am against the motion. What the public thinks always matters as if they have a bad impression of your business, they will not use your service. Investors rely on the sales of a company and need to make every effort to ensure there is a return for shareholders. The public can use certain channels of communication to share their opinions, through social networking or blogs. For example, Thompson Airlines were targeted after a Customer and his partner were not satisfied with their Holiday experience and furthermore their customer relations team when approaching them with their problem. When Thompson did not respond, the customers took it upon themselves to blog about their experience. This rant blog topped Google search rankings above the Thompson website itself. This incident resulted in a lot of publicity for Thompson and caused customer satisfaction to drop and their reputation was at risk from there on. This shows what the public think does always matter, emphasising on the word always, as the public opinion will always matter on how well they perceive your business at all times. When customer use social networking websites such as ‘twitter,’ their opinions can go viral and create a domino effect towards the opinions of other followers. “You don’t always have to tell the truth to the press” The Investor Relations team at Virgin Atlantic would vote for the motion “You don’t always have to tell the truth to the press.” As some news is essential to the business and at times may not be legally authorised for public viewing. In reference to Virgin Atlantic as a company, we do not require to share an annual report, as it is owned by the Virgin Group and Singapore Airlines only, so any
Megan Beard / Q79730558/CCA502 performance and sales information cannot be seen and therefore does not ‘always’ have to be told to the press as it is not authorised information for any other stakeholder. This in fact is not, not telling the truth, but lawfully not sharing information. A reason many companies do not talk to the press is because the press are known for spinning and lying about news stories. Withholding information about your company in the long run may help the press from covering a story in a negative light, with only a fraction of the truth. Virgin Atlantic have been victimised in the past when stories rose about ‘suspected’ price fixing agreements with another airline, Cathay Airlines. This story was a tip-off and written as an alleged story. The press had no proof of this agreement and went forward with releasing it anyway. Nothing came of the story and any investigations made did not prove anything. This shows the press will do anything to make a story more exciting and lie to get what they want, showing you do not always have to tell the truth to the press, they will lie for you instead. “Shareholders are more important than customers” Virgin Atlantic Investor Relations team would be for the motion “Shareholders are more important than customers.” When a business is born, it is created by the investors themselves. Without the investment into a company, the company would not exist or grow. Customers would be able to use a service from a company if it was not there in the first place, proving shareholders are more important because without the investment of shareholders, the company would not be able to strengthen or even exist.
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Appendix C
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