Download - Corportate Communications Report
Megan Beard / Q79730558/CCA502
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.’
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
Figure 2:
http://www.facebook.com/virginatl
antic
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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
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 an influential source and
stakeholder that can further 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
Figure 3: Press Office page
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easily retrieved, with a flavour for Virgin Atlantic with a visual outlook; however lacks in-
depth 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.
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
Figure 4: Flying High CSR
Report
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Figure 5:
Environmental page on
Virgin Atlantic website
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
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
Figure
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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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Figure 8: ‘What Virgin is up to
around the World’
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
companies. This gives the
Community and 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
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 Community how
successful Virgin Atlantic is.
Figure 7: CSR Report
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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.
Megan Beard / Q79730558/CCA502
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
Megan Beard / Q79730558/CCA502
Appendix A.
COMMUNITY
SUPPLIERS
SHARHOLDERS/
INVESTORS
CUSTOMERS
MEDIA
REGULATORS
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SHAREHOLDERS
SINGAPORE AIRLINES
THE VIRGIN GROUP
RICHARD BRANSON
www.virgin.com
http://www.singaporeair.com/SAA-
flow.form?execution=e2s1
Megan Beard / Q79730558/CCA502
AIRPORT
COMMUNITES
SURROUNDING
AIRPORT
COMMUNITIES
http://www.gatwickairport.com/
http://www.heathrowairport.com/
http://www.orlandoairports.net
http://www.horleysurrey-
tc.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-charangas-
de-bejucal/
COMMUNITY
Megan Beard / Q79730558/CCA502
TRAVEL
ONLINE/WEBSITE
CUSTOMERS
http://www.statravel.co.uk/travel-help-
new.htm
www.tripadvisor.com
www.virgin-atlantic.com
www.expedia.com
www.twitter.com
www.facebook.com
www.tumblr.com
www.flickr.com
SOCIAL NETWORKING
CUSTOMERS
CUSTOMERS
Megan Beard / Q79730558/CCA502
LEGISLATORS
ACTIVISTS
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/
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
http://www.infrastructure.gov.au/aviation/le
gislation/index.aspx
http://www.aviationlaw.eu/
http://www.hg.org/aviation-law.html
PUBLIC AFFAIRS
REGULATORS
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ONLINE MAGAZINES
BLOGS
JOURNALSTS
MEDIA RELATIONS
WEBSITE
http://www.ft.com/magazine
http://uk.cision.com/Resources/Social-Media-
Index/Top-UK-Social-Media/Finance-Week/Top-
25-UK-Finance-Magazines/ - below lists came
from this website – list from the top 25
http://www.cimaglobal.com/
http://www.theneweconomy.com/
http://www.moneyweek.com/
http://fw.ifslearning.ac.uk/home.aspx
http://www.theforwardgroup.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.smartplanet.com/blog/tr
ansportation/virgin-atlantic-to-use-
waste-gas-to-fuel-its-planes/1046
http://blog.vtravelled.com/
http://news.yahoo.com/blogs/techn
ology-blog/virgin-atlantic-promises-
help-develop-eco-friendly-jet-
011916875.html
http://blog.bookingbuddy.co.uk/virgi
n_atlantic/index.html
http://techblog.smashing.net/2011/1
1/01/virgin-atlantic-launches-all-
new-economy-service/
http://www.aero-
technics.co.uk/blog/index.php/interi
ors-contract-with-virgin-atlantic-
airways/
www.telegraph.co.uk
www.dailymail.co.uk
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FAIRTRADE
BOEING
SUPPLIERS
VIRGIN CARGO
TESCO CLUBCARD
http://www.fairtrade.org.uk/work/news/ne
ws.aspx
http://www.virgin.com/people-and-
planet/blog/fairtrade-at-virgin-wines
http://cargo.virgin-
atlantic.com/gb/en/index.html
http://www.cargo-
overseas.co.uk/index.php/spotlight-on-
suppliers/61-virgin-atlantic-cargo-a-supplier-
of-contracted-services-to-lagos. (Virgin also
supply to other companies such as overseas
transport)
http://www.boeing.com/
http://www.virgin-
atlantic.com/en/gb/allaboutus/ourfleet/inde
x.jsp
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-Atlantic-
cabin-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.