Analysis of Operational Issues: Virgin Australia Case Study Report

This report provides a detailed analysis of Virgin Australia's operations management, focusing on two key aspects: operational strategy in a global context and job design. It examines the airline's strategies for achieving on-time performance, managing operational risks, and utilizing technology like e-procurement to streamline processes. The report also explores Virgin Australia's approach to job design, including its recruitment process and employee engagement initiatives. Furthermore, the report identifies operational issues, analyzes the company's performance relative to competitors, and provides recommendations for improvements, such as leveraging technology and fostering a transparent organizational culture. The analysis is supported by data from various sources, including the Virgin Australia Group's financial reports and industry performance data.

3/31/2020
Running Head: MANAGEMENT 0
Operations Management in Global Context

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Contents
Introduction..............................................................................................................................2
Identification and analysis of operational issues...................................................................2
Recommendations....................................................................................................................5
Conclusion.................................................................................................................................5
Reference List...........................................................................................................................6

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Introduction
The research is done about the operations strategy of Australia largest airline in terms of fleet
size and the name of the company is Virgin Australia have started commencing its operating
in 2000. In relation with the course, the two operational aspects have been selected for further
research and in interrelation with the company includes Operational Strategy in Global
context and Job Design. Operations are one amongst the many functions that needed to be
aligned with the overall business strategy so as to pull organisational practices and efforts in
the same strategic directions. Drohomeretski et al (2014) also stated five possible operations
objectives applied on most of the organisations and these include – speed, quality, cost,
flexibility and dependability. In relation with Virgin Australia, they are known to be as part
of world-leading Virgin Group entered the Australian air travel marketplace early in 2000
carrying actual competition in the leisure area of the marketplace. The company new vision is
to bring transformation in aviation industry and through all market segments. The total
passenger revenue in 2019 was nearly 5.32 billion Australian dollars as per the Virgin
Australia Group (statista.com, 2019).
Identification and analysis of operational issues
Operation strategy in global context
The nature of operations management is changing and is no longer extended the process of
set of activities that builds value in the form of products and services by converting input into
outputs (Ostrom et al, 2015). At a global scale, operations management must contend with
various decision areas due to shifting of the world’s economic equilibrium and changing
dynamics. Airline operations present an outstanding contrast by safety moving millions of
peoples from one and other countries around the world. In relation with the Virgin Australia

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operation strategy in global context, it presents a competitive advantage to the firm while
placing it in exceptional and distinct position to contend effectively with the other carriers in
the world-wide air travel marketplace. Most of the competitors found challenges when
putting efforts to imitate company operational strategies, procedures and policies as it has
been developed a much time before and the company is trying to innovate in all these aspects
for heightening its brand reputation and cultural values.
In relation to company operation strategy, the main focus area is towards achieving on-time
performance and show commitment towards safety and operational risk oversight and
management (virginaustralia.com, 2020). The company plan its each and every operational
strategy in a way that can help Virgin Australia to assess its on-time performance as all
flights that depart inside 15 minutes of their mentioned departure period. In addition, Virgin
Australia makes no exception for air traffic control, bad conditions of weather, unscheduled
maintenance and other external factors. The airline also shows complete transparency in its
operational decision area like reporting of their on-time performance data to the BITRE
authority and hence also makes the integrity. Taking an example of February 2020 industry
performance, the Virgin Australia network recorded 76.6 % for on time arrivals in
comparison with the other airlines such as Qantas network who recorded 76.1 %
(bitre.gov.au, 2020). Being a domestic carrier, Virgin Australia attained the maximum on
time arrivals amid the leading national airlines at 76.8 %. It shows the combination of
effective operational programs and strategies used by Virgin Australia at both domestic and
international level.
Towards commitment on operational risk and safety oversight and management, Virgin
Australia pursues efficient mechanism for improving its performance in this area like
maintaining best practice in operational safety management comprising compliance with
regulatory and legal commitments and inside systems of control. The company also has a
safety management system (SMS) by which they control and reduce operational safety risks
and observers their operations to check that whether they surpass Civil Aviation Safety
Authority standards and international safety regulators or not (virginaustralia.com, 2020).
Furthermore, the airline also works with various government agencies, airport operators and
regulators in Australia and globally to certify that they have fulfil with all necessary protocols
and presented the safest operations likely.

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Virgin Airlines also strengthen its global operations strategy with its e-procurement approach
as with this system, the airline boosts up the procurement cycle and decreases the time and
costs for both Virgin Australia Airlines and its suppliers. Virgin Australia also builds its
operational practices in relation with essential competitive priorities and factors including
time, cost, speed, quality and flexibility. Taking an example, Paul Scurrah - CEO &
Managing Director of Virginal Airlines Group found increased operational cost last year in
2019 and this makes him engage in substantial cost cutting programme while merging the
corporate and operational utilities of its regional, local and Tiger air operations. To achieve
this, the company last year also slashed 750 jobs (Janda, 2019).
Job Design
Job Design identifies the work activities of an individual or group in provision of business
aims and the core dimensions and techniques of job design is important to be identified so as
to stimulate employees to achieve set targets either in an operational area or for a specific job
role integrated to the overall corporate strategy (Pee and Lee, 2015). Virgin Australia prides
themselves in finding right individual for the right job roles and that is why they have to mark
tough screening procedures for the individuals to be a part of Virgin Australia. For instance,
the careers panel on the company websites states their recruitment process, pit crew
recruitment, indigenous employment program, engineering apprenticeship program,
department profiles and many more.
Simply taking company recruitment process, the company first accept online applications of
the various likely candidates and applicants followed by a cover letter. After receiving the
data and necessary documents such as resume, the selected candidates will be having a phone
screening and interview for nearly 20 to 30 minutes and afterwards, for some of the roles, the
person will be asked to attend a recruitment day as a part of this process (virginaustralia.com,
2020a). Ultimately, the company also determine how an applicant will perform duties relying
upon their previous behaviour in the organisation and it is made as a part of behavioural
interviews session. The selected candidates will be later on go with pre-employment medical
tests and then become the part of the leading Virgin Airline Group in Australia. At present,
nearly 10, 620 employees are working in Virgin Australia as per their 2019 annual report
(virginaustralia.com, 2019). The effectiveness of company job design can be identified with
the company practice towards becoming a well employer as like Randstad awards Virgin
Australia as Australia’s most attractive employer in 2016 with a survey of over 10, 000

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Australians of working age, to scale which companies and industries they are most concerned
to work for (randstad.com.au, 2016).

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Recommendations
The global airline business environment is becoming highly competitive and this requires
companies in this industry to strengthen its both corporate and operational strategy. Firstly,
Virgin Australia can leverage technological capabilities such as block chain and AI to
improve every layer of the airline operations and infrastructure and modernizing airline
operations regionally and globally. Talking about Virgin Australia, the management and
leaders must shift their traditional mindset towards operational approach so as to practice a
greater integration over all operational areas and exploiting the data and information across
the operational silos. The efficiency of inbound operations of Virgin Airlines can also be
improved with use of modern technology such as AR and VR and therefore, save costs in
several areas of the group.
Furthermore, the operation strategy of Virgin Australia is also associated to its vision and
corporate strategy which is bound by the inclusive business environment. In order to gain
success for a long period of time, Virgin Australia must embrace over transparent culture and
decentralise its organisational structure in a more inclusive way so as to create a platform of
innovation composite of all areas, management and employees. In relation with its job design
approach, the airline should make tie-up with top Australian universities and institutions so as
to acquire skilled human set annually without spending much cost on employment.
Conclusion
Ultimately, Virgin Airlines is successful and lists constant progress in the extensive arrays of
business it undertakes. The big rivals such as Qantas have a tough time when putting efforts
to imitate the processes, operations and policies of Virgin Australia as it has incorporated and
achieved over the years of time span. Virgin Australia revels in the synergy of the Virgin
group while focusing on making excellent yields and growth both regionally and
internationally. For the long term sustainability and growth, Virgin Australia must undertake
its operational decisions holistically and in the proper direction of the industry forces.

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Reference List
bitre.gov.au. (2020) Domestic airline on time performance February 2020 [ONLINE]
Available from:
https://www.bitre.gov.au/sites/default/files/documents/bitre_otp_report_february_2020.pdf
[Accessed 30/03/2020].
Drohomeretski, E., Gouvea da Costa, S.E., Pinheiro de Lima, E. and Garbuio, P.A.D.R.
(2014) Lean, Six Sigma and Lean Six Sigma: an analysis based on operations
strategy. International Journal of Production Research, 52(3), pp.804-824.
Janda, M. (2019) Virgin Australia to slash 750 jobs after posting $349 million loss
[ONLINE] Available from: https://www.abc.net.au/news/2019-08-28/virgin-to-chop-750-
jobs-as-it-posts-349m-loss/11455840 [Accessed 30/03/2020].
Ostrom, A.L., Parasuraman, A., Bowen, D.E., Patrício, L. and Voss, C.A. (2015) Service
research priorities in a rapidly changing context. Journal of Service Research, 18(2), pp.127-
159.
Pee, L.G. and Lee, J. (2015) intrinsically motivating employees’ online knowledge sharing:
Understanding the effects of job design. International Journal of Information
Management, 35(6), pp.679-690.
randstad.com.au. (2016) Virgin lands top spot to become Australia’s most attractive
employer [ONLINE] Available from: https://www.randstad.com.au/hr-news/talent-
management/virgin-lands-top-spot-to-become-australias-most-attractive-employer/ [Accessed
30/03/2020].
statista.com. (2019) Airline passenger revenue of Virgin Australia Group flights in the
financial years 2017 to 2019 [ONLINE] Available from:
https://www.statista.com/statistics/1017619/australia-airline-passenger-revenue-virgin-
australia-group/ [Accessed 30/03/2020].
virginaustralia.com. (2019) Operational performance [ONLINE] Available from:
https://www.virginaustralia.com/cs/groups/internetcontent/@wc/documents/webcontent/
~edisp/fy19-annual-report.pdf [Accessed 30/03/2020].

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virginaustralia.com. (2020) Operational performance [ONLINE] Available from:
https://www.virginaustralia.com/us/en/experience/operational-performance/ [Accessed
30/03/2020].
virginaustralia.com. (2020a) our recruitment process [ONLINE] Available from:
https://www.virginaustralia.com/au/en/about-us/careers/our-recruitment-process/30/03/2020].