How Virgin is Re-inventing the Airline Industry

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In true Richard Branson style Virgin has once again found a way to take an unprofitable industry and make it profitable by being fun, innovative and sexy.  The price point is attractive and the service level truly appeals to an up and coming generation while addressing the needs of business travelers.  There are some lessons that Virgin beautifully exemplifies in the way they do business.  It is obvious that before moving into this industry they did a ton of research on what works and how things can be improved. Their branding is perfectly integrated into all customer touch points, and they have found a way to make it fun and cool beyond the cheesy flight attendant routine that so many other airlines have been milking for the past 10 years.

My experience traveling to and from Boston and San Francisco was incredible. From the moment I approached the front counter to pick up my ticket I knew I was in for a different type of traveling experience.  The design elements of the front booth were intriguing; from the purple lights in the back drop, branded booth elements, and corporate reds and silvers. Interesting writing on the wall sparked my curiosity by hinting text messaging, wireless internet, food and video on demand.   Upbeat music was playing, the front desk staff were relaxed and friendly and they quickly handed me my boarding pass which fit comfortably into my passport. I was on my way.

As I entered the waiting area, I noticed Virgin had teamed up with Google Chrome to provide free net books and wifi in both the waiting area and onboard to their guests.  Yes, you read that right – free wireless internet on an airplane!  I am currently writing this article on the plane and have achieved 5 hours of straight productivity thanks to this service. Although that is a matter of choice since the passengers next to me have been on Facebook and watching cartoons with the same privilege.

Options to upgrade to a luxurious first class cabin were available, and they conveniently renamed their exit row seats to their Premier Cabin.  First Class and Premier Cabin both require upgrade fees ($99 for Premier Cabin and $299 for First Class on a cross country flight) and they provide traditional service elements of food, alcohol, extra room, etc.  They still charge for checked luggage, food is not included in the main cabin service (even on a cross country flight), and movies are not included BUT the value components are still there.  Let me explain:

1. Entertainment – In the past, airlines would play one or two movies that you may or may not be interested in.  If the movie was boring or the timing did not work for you then you were out of options.  What Virgin does is provide you with a complete video console called RED. It offers seat to seat text messaging, movies and TV on demand, food service, games, shopping, kids play, and radio all in one.  The gaming console comes out of the arm rest and looks like a wii controller.  The innovation is inherent and people are willing to pay for the convenience.  I like to watch movies on my terms and I am willing to pay for that service which comes priced at $8 a flick.  They guy in front of me watched a total of 4 movies this flight, ordered food, and bought headsets all from the comfort of his seat.  That is an extra $50 in revenue for that passenger and a 15% increase in the average sales price that he was happy to pay for.

2. Food on Demand.  Who actually likes airplane food anyway?  Options are limited yet somehow I feel compelled to eat everything in front of me when I travel.  It is probably because my Mom always taught me to eat everything on my plate – good or bad.  Virgin provides you with an assortment of options including snacks, meals, and pairings.  Meals mostly consist of sandwiches and salads which are easy to prepare and distribute.  All ingredients are listed on the screen and the food comes out fresh and tasty whenever you want it during the flight.  What is really neat is as soon as you make your order the system automatically updates the inventory to ensure they are not overstocking and wasting food.  As the flight continues the remaining perishable food items are bought and everyone is happy.  Very, very smart.

3. Cabin Features.  Virgin charges $25 per checked bag, however the cabins are large and have plenty of room for big carry ons. The leg room in the standard cabin is about 2-3 inches bigger than most airlines and even offers more space for bags underneath.  Being 6’2″ this is huge benefit for me. Thanks for the leg room Richard!

The flight experience is fantastic.  The attendants are friendly, attractive and …. not cheesy.  The introductory safety video is comical yet well done and for once I think I actually fully understand all the safety features while laughing along the way.  The airplane design reminds me of an Apple product.  The tray tables, seats, and interior walls are simple and sleek.  The cabin has purple and black lights that make you feel vibrant and relaxed.  The bathroom is spacious and they use method soap (one of my favorites)!

Virgin has done a fantastic job branding, pricing, and creating value in an industry that is notorious for not doing well.  I am confident that they will continue to grow and prosper in this industry.


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