Since its launch in 1984, Richard Branson's Virgin Atlantic Airways has used innovative services focused on improving the passenger experience to differentiate from its rivals.

At the end of the 1980s, Virgin became the first airline to offer individual TV screens to passengers in business class. Today, an onboard entertainment system streams movies on demand to individual seats, for all passengers, from a central server.

'We think it's a winning formula for long-haul travel, so we continually upgrade our systems,' says IT director Simon Fox.

The airline's v:port system, already installed on 13 of its 31 planes, even lets passengers play games, such as trivia quizzes, with each other.

But IT initiatives often have to overcome competing business proposals to get the go-ahead. 'The business demands what projects are done, so IT competes against things such as new seats or planes,' says Fox.

Although the airline is excited about the prospect of in-flight wireless broadband, for instance, it baulks at the cost of providing it. While two rival technologies are gaining a grip in the market, neither are particularly cheap.

'It's coming, but it's expensive,' says Fox. 'We will innovate, but in specific areas such as passenger services, rather than in back-office functions.'

This is not to say that the airline doesn't try to be as competitive as possible. While the threat of low-cost carriers isn't as great in the long-haul market in which Virgin operates, Fox says competition on certain routes is just as intense.

'On the route between London and New York, you have Virgin Atlantic, British Airways, United Airlines and American Airlines. It's a bloodbath,' he says.

As a result, Fox is deploying a range of initiatives, from e-tickets to self-service check-in kiosks, and says the airline is already halfway through rolling out e-tickets to all passengers, and hopes to completely kill off paper ticketing in the next 12 to 18 months. 'We're pretty aggressive about this,' he says.

The more difficult step is linking its e-ticketing systems with other airlines, so if a passenger books a journey involving more than one carrier, the ticket will remain valid throughout.

Progress has already been made, with ticketing between carriers recently launched with Continental Airlines.

In the past 12 months, Virgin has also invested in an online check-in service, and recently launched self-service check-in kiosks (Computing, 20 January).

Rather than take on the expense of providing kiosks in every destination, Fox has ensured his systems are compatible with standards set by the International Air Transport Association (IATA), allowing Virgin to share kiosks with other airlines in airports around the world.

'The reality is that we can't put kiosks in, say, Sydney, so being based on standards is key for our rollout,' he says.

Radio frequency identification (RFID) is another technology being watched closely by the company, although there are currently no plans for its adoption.

'RFID has the potential to revolutionise bag handling, and in due course it will happen,' says Fox. 'It's also relevant for aeroplane spares, a very taxing activity.'

Outside these processes, Fox devotes much of his attention to building better systems for communicating with the company's 8,000 staff.

'We need to modernise how we interact with our employees. The challenge is that many of our staff never come into an office, so we rely primarily on sending them letters. IT has to try to solve that problem,' he says.

Much of the technology is already in place, with a company intranet, HR self-service , and email access already online.

The remaining challenge is to add applications relevant to all staff, and to support employees that aren't comfortable online.

But the airline's transformation doesn't end there.

'We need to do more. We're at the beginning of this process, not the end,' says Fox.

'The worldwide travel system works terrifically well, but there's a big blot on check-in processes, which are based on legacy systems that we're trying to kill off.'

The big question is establishing when these legacy reservations, inventory and departure control systems can be switched to next-generation offerings from vendors such as Amadeus, SITA and Sabre.

The new systems offer a wide range of exciting features, but making a mistake with such fundamental components could bring the airline to a halt.

'Current passenger systems are based on 1960s technology, but they work fantastically well, with response times ahead of most new technology,' says Fox.

Virgin's current goal is open-ended, with a general plan to switch over sometime between 2007 and 2010.

Until then, passengers will have to make do with the airline's 64-channel entertainment system and the 300 hours of movies and television available onboard.