Browsing Posts in Virgin America

Good morning from Long Beach. I love when a conference comes to me instead of making me go to it. This year, the World Airline Entertainment Association came back to Long Beach, (and changed its name to the Airline Passenger Experience Association to make it sound more awesome). I was asked to be one of the judges to determine the single best achievement in inflight entertainment this year, so I thought I’d share with you some detail on how I looked at the group. Etihad may have won, but there were others that were quite deserving as well.

When the winner was announced, I found myself wishing that any further information had been given. I mean, it’s great to win, but shouldn’t other airlines get the benefit of knowing what made for a winning entry? I wrote about Etihad over on BNET, but here I want to focus on the other four finalists. Here they are in reverse alphabetical order (’cause it’s just more fun to shake things up like that sometimes).

Virgin America
Virgin America (and V Australia which also uses the Red entertainment system) were big winners overall, as you would expect, but the airline came up just short in this category. After winning last year with its menu-ordering system, Virgin America submitted its open tab functionality this year. I love this functionality, as I wrote before. In short, instead of having to swipe your card every time you want to buy something, this allows you to simply swipe once and then close-out at the end of the flight, like a bar tab.

The beauty of this is that it’s good for everyone. Passengers like it because they only have to swipe their credit cards once. The airline likes it because people spend more. In fact, Virgin America says that in the short month that it’s been on the fleet, there has been an appreciable increase in revenue, primarily food and beverage. Great stuff, an incredibly simple concept, and this is certainly worthy of being a finalist.

Emirates
The entry from Emirates was for a complete revamp of its passenger service video. This was a very strong entry as well, though I imagine many of you don’t even know what the service video is. When you depart on Emirates, you used to get a bulky, 5 minute long video explaining all the features on the flight. Using the entertainment system, making calls, frequent flier program benefits, etc, were all part of it. What the airline found was that 5 minutes was too long, and having shot these in aircraft cabins made for a very difficult process when a change was required. (Emirates doesn’t have any spares, so an airplane had to be pulled out of service for filming.) Instead, Emirates came up with a new concept.

Instead of getting into details on how to do everything, Emirates decided to make the video more of a primer to whet your appetite. It was cut down to 2 minutes, and nothing was filmed on the aircraft. Instead, most of it was filmed on a green screen and cut in ways that images could be inserted very easily, if changes were needed. The result? A very slick video that gets across enough basic info to get you interested. It also is so easy to update that it will never need to cost an arm and a leg to update in a timely manner. That’s good for the airline since it keeps costs low and good for the passenger since it keeps things up to date. And at only 2 minutes instead of 5, it’s much more pleasant as well.

El Al
El Al submitted its first new safety video in 8 years, and I think that makes it tough off the bat.

I mean, passengers don’t care about the safety video in general, and in fact, they hope they never have to use the information in there. But it’s obviously important information, and if a new video can get passengers to pay attention, that’s a big benefit. Air New Zealand has seemingly mastered that effort with its Nothing to Hide campaign (which won the award for best safety video this year). But El Al did create an entertaining, mildly funny, and informative video here.

The video is animated, and it’s hosted by a fairy that’s a flight attendant. (Hold your jokes, please.) The helpful fairy floats through the cabin explaining what needs to happen. It’s a good safety video, for sure, but it’s hard to see how this could be the single best achievement. Still, El Al has done a really good job of creating something that will keep passengers’ attention. And that does deserve some recognition.

Air France
Lastly, we have Air France which submitted its USB download feature this year. This is only on the A380, but essentially the airline will let you download a variety of content to a thumb drive so that you can take it with you to use on a layover or in a destination. I can see this being helpful with things like destination guides and transport maps (which are both offered) and with games for kids to keep them entertained. But will this be worthwhile? An increasingly large number of people are connected on the ground, so they might not be as interested in this. Also, who wants to carry a thumb drive around? I have to assume the ultimate goal is to have it sent via the internet to a smart phone or computer for easy access.

But for now, it’s hard to judge this. One of the proposed benefits is that it will enable the airline to create a new stream of revenue. Advertisers and content providers will need to line up to pay for this, but that hasn’t happened yet. It’s only on the A380 so there aren’t enough eyeballs for that to happen just yet. I could imagine a time where someone browses a destination guide and then has a coupon sent directly to a smart phone. That’s compelling, but it’s just not there now. Maybe this will prove to be a great move in a year or two, but it’s too early right now.

And that was it. They put us judges in a room on Sunday to listen to presentations from each of these. We had some really good debate about each one, and in the end, Etihad came out the winner, but not without a lot of contemplation.

Finally, Virgin America has picked a new city that makes sense. It only took them a few years to get there. Starting in December, the airline will roll into Dallas/Ft Worth from LAX and SFO. Will it be successful? I have no clue. I mean, the Metroplex is littered with carcasses from American’s kills, but hey, it’s worth a shot. If Virgin America is going to work, this is a market that should work for the airline. If it doesn’t work, well, at least we’ll finally know for sure.

So why do I say that Dallas/Ft Worth makes sense? A few reasons.

  • It’s a big business market
  • There is no nonstop low cost competition to LAX or SFO
  • The 3-4 hour flight times means the Virgin America product is more relevant
Typical American Airlines Competitive Response

Now, why would Dallas/Ft Worth not make sense? It’s a short list.

  • American

Yep, that’s right. American has killed many a competitor who has tried to come into Dallas. In fact, instead of trying to create a better product and compete that way, American usually goes with the old school, full-on scorched earth strategy.

Remember when Vanguard came to town? No, neither does anyone else, because American destroyed it mercilessly. How about the Legend debacle at Love Field? Legend flew airplanes in executive configurations, and American got nervous. It actually refitted a fleet of airplanes just to go to Love Field and kill Legend. Once that was done, the airplanes were reconfigured and sent back into the main fleet.

We can also look at more recent events at Love. Remember when Missouri got approved for nonstop flights from Love Field? American wasted a ton of money going into the market just to compete with Southwest. Now, winning against Southwest is a hard thing to do, and American failed, but that’s one of the few times that American hasn’t won in Dallas. Is Virgin America up to the task?

It has an advantage over other failed efforts, that’s for sure. The airline has built up a nice little following in San Francisco, so it has a base to pull from. Meanwhile, American has been retrenching in San Francisco, most recently dropping Boston. In LA, it’s going to be tougher. American has called LA a key part of its strategy, but it actually hasn’t done anything new in the city for a long time. Maybe this will kick start American to finally do something there.

But competing with American is going to be virtually impossible for the serious business traveler. Virgin America will have two measly flights per day in each market. American has 16 a day to LA and 9 day to SFO. There’s just no comparison. But United has two a day in each market as well, some on tiny CRJ-700 aircraft. Virgin America should compare quite favorably there.

The real question, however, is how will American react? There’s no question that fares will be matched, if not undercut. I would assume there will be some huge frequent flier promotion and probably a bulking up of schedules. American will do anything to protect DFW. This may even push it to fight in other markets as well.

So, this puts us in a good place for seeing if Virgin America can actually make a go of things. The airline is finally entering a market that it should be serving, considering its previous strategy of big city business markets. It offers a much better product than American, which doesn’t even offer an overhead screen on half the flights in these markets. But can it survive American’s scorched earth tactics? We’ll finally find out.

It’s a rare day when I agree with what Virgin America is doing, but I have to say that they’ve made some really strong changes to the Red inflight entertainment system. My guess is that this should help them bump up their ancillary revenues, and they desperately need that to happen.

Buy OHare Gates for Virgin America

The big change is that there is now inflight shopping via Red. It’s a natural extension when you have internet, personal screens, and a captive audience. The shopping is powered by SkyMall, so the next time you need a toilet paper iPod holder or wine glass holder necklace, you know where to go. Come on, admit it. You love flipping through the SkyMall catalog on the plane. And you know you’ve been tempted to buy something while flying but couldn’t pull the trigger because you had to wait until you hit the ground, by which time you’d already realized it was a bad idea.

But now, you won’t have to wait. And as if that’s not enough, you’ll earn frequent flier points when you buy something. Two points per dollar, so that means you’ll get 460 points when you buy that foot tanner. I believe they’ll be running a special offer as well. Buy terminal space at Chicago O’Hare, give it to the airline, and you’ll get quadruple points!

I’m still not sure why SkyMall is so compelling. Maybe it’s the thin oxygen-deprived air, but now Virgin America will help you act on your impulse. It’s about time they make Red earn its keep. Red ain’t cheap. But just in case the thin air isn’t enough to get you to open that wallet, Virgin America will help push you along by getting you drunk.

That’s right. Another feature of the new Red is an open bar tab. It’s not actually just a bar tab. Basically, anything you purchase during the flight – movies, food, drinks, etc – will go on a tab and then you swipe your card once to pay for everything. This avoids the annoyance of having to whip your card out regularly, and it will undoubtedly encourage people to spend more. Why do you think bars allow people to keep tabs? Because when you don’t pay every time, you drink more.

Drunk people + crazy shopping opportunites = ancillary revenue gold!

As Allegiant has shown quite nicely, you don’t need to make money flying airplanes as long as you can make up for it elsewhere.

[O'Hare Photo via Flickr user Incase]

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Regional Airline Association Annual Convention Video
The videos are up from the RAA convention, and here’s my intro speech (about 5 minutes):

If you’d like to know the Tweet that I talk about not responding to, it’s right here.

You can also see part of the panel discussion with Benet Wilson and Mary Kirby here.

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Virgin Atlantic Says U.S. Authorities Held Passengers on Diverted PlaneBloomberg
Bloomberg has picked up the Virgin Atlantic ground delay story, and they asked me to comment.

Virgin Atlantic’s Three Hour Tarmac Delay Whips Up Irrational AngerBNET
Another long delay and another reaction that doesn’t make sense. *sigh*


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