As I mentioned, the reason I had the chance to interview Virgin America CEO David Cush yesterday was because he was in town for the ribbon-cutting on the airline’s newly renovated space in LAX Terminal 3. They’ve done a great job here, and it really didn’t cost very much at all (about $2.5 million in all, and some of that will be reimbursed by the airport through lease rebates). These are the kind of projects I like to see.

The biggest changes were in the ticketing area where Virgin America and V Australia (which begins flying to LA on February 27) knocked out some offices and pushed the ticket counters further back. This gives a lot more room for travelers, and the way they’ve laid it out makes for a very well-flowing space. I still need to get a bigger memory card for my camera, but until that happens I have to settle for slightly worse video quality than I’d like. Still, it’s worth a view.

I know I said in the video that I would be back with video of the gate areas, but I lied. It turns out that very little had changed since my first visit a couple weeks ago. The biggest change is the podiums sitting in the middle. Virgin America’s facilities guy Len Sloper has years of experience in Terminal 3 since he used to be Alaska’s general manager at LAX. So we were lucky to have him come with us and point out some of the things they want to do in phase two. (None of these things are finalized.)

• The posts in the middle of the terminal would be renovated to fit the Virgin America style
• Mood lighting will be added
• They want to add either a tree or a bamboo plant, or something alive to the middle of the terminal
• The signage layer that rings around the terminal half way up will be removed to open up the views further
• There is a ring around the outside of the terminal with ramp lighting that they want to replace with purple lighting so it glows like the pylons at the entrance to LAX

Some of these things sound kind of wacky, but the artist drawings looked pretty cool. Len kept talking about how this one is the only terminal still in its original form, and it has some of the best views of all the terminals at the airport. He wants to open those up and restore it to being much better than it is today. That’s a great goal, but it sounds like he should be working for the airport instead of Virgin America.

Anyway, what they’ve done so far is taken a relatively poor passenger experience and improved it significantly with a more functional check-in area and better passenger flow around the gate areas. For a couple million dollars (much of which will be reimbursed by the airport) this is a smart move.

On an unrelated note, I didn’t cover the airline’s announcement that it would be starting Boston flights for fear of Virgin America overload, but I like this move. The long haul routes make the onboard product advantage that much more important for the customer, and existing airlines have cut their schedules so much on the route that Virgin has a competitive if not superior schedule compared to just about everyone else. Good stuff.

[See all my pictures of LAX Terminal 3]

Ah the life of an elite member on United. No fees, special lines, and free upgrades to Economy Plus. It may seem like a fair reward for devoting your business to United, but the airline continues to devalue elite benefits. Now, the difference between being Premier and being Joe Schmo is becoming blurred further by allowing anyone to buy access to elite lines starting at $25.

Dennis Cary, SVP, CMO, COO, and undoubtedly owner of some other TLAs as well, correctly says “When we asked our customers what travel services are most important to them, they told us that access to priority lines was something they value highly.” It’s absolutely true that they are considered valuable, and that’s why they’re reserved for elite members. Now, United is opening it up to “a limited number of customers each hour based on time of departure” and that has me shaking my head.

Sure, people want access to the priority lines, and that’s one reason why people strive for elite status. Now, United is saying that nothing is sacred, and anything elites can get, you can buy on your own. There are two reasons why I think this is a bad idea.

First, you clog up the elite lines with even more people. It used to be that getting elite status wasn’t the easiest thing around, and upgrades were easier to get. Now, it’s really not that tough to become a Premier, and often half the plane is full of “elite” members. (I use the quotes because they aren’t so elite anymore.) Now you add even more people and you end up clogging up the line further. This is effectively United competing with CLEAR, but instead of an annual subscription, you pay per play. It just means more people will use the lines degrading the experience for the elite member.

Second and possibly more importantly, you make becoming an elite less worthwhile as well. Getting priority lines used to be a big deal for elites, and it made people strive for that status. Now if you can just pay for it when you travel, you can be much smarter about it. Chances are you aren’t always traveling at peak times, so you can save your payment for only those times when the regular lines are bad. The cost savings you can get by diversifying your flying to other airlines that are likely less costly will easily pay for the few times you need to pay for the elite line pass.

It’s entirely possible that regular passengers won’t find it worthwhile to buy up here, and if that’s the case, then the first case won’t happen. But we know elite passengers find it valuable, and if this makes it easier for them to break the bonds of loyalty, then it’s not a good move.

Bottom line: While I could previously not get any of these benefits without becoming elite, I now have no real reason to do so except to get fees waived.

I know, I know. I’ve had a fair number of posts on LAX lately, and I’m sorry about that for those not impacted by this airport. But I think this should be the last one for a little while.

As we all know, LAX is not exactly the world’s favorite airport. In fact, most people who have to fly through the the place, especially from an international perspective, find it to be a miserable experience. This is definitely not a secret, but after many proposed fixes kept failing to happen, I think most just figured it would never change. I had the chance to attend a reception last week where they unveiled the latest design effort to fix the place up. What do I think? It’s a beautiful design, but it’s a complete and total waste of money.

Let’s start with the good. Here’s a shot of what it will look like. This would be the view if I were looking from the ocean toward the east.

As you can see, it will ultimately add two concourses to the Bradley Terminal with a host of other stuff in there as well. Fentress Architects, the same people that did Denver’s airport, came up with the design, and they were at the reception to explain to everyone how it took the LA environment into account and incorporated the ocean, the mountains, etc. They even said, and I swear I’m not making this up, that they’re trying to change “LAX into LA-Wow.” Now I’m the first to admit that I’m not a design kind of guy, but I suppose I understand what they were trying to do. My problem is that they shouldn’t have been trying to do it.

We heard a lot from Roger Johnson, Deputy Executive Director of LAWA and head of this project, about how this is going to be an airport that people talk about. It’s going to be an airport that when people arrive, they tell their friends and family that they have to go see it. Who the heck cares? I want an airport that’s easy. I don’t care if it’s pretty. If you go for “pretty,” you end up wasting money (at least $6 or 7 billion in this case) on something that ultimately either leads to higher airfares or loss of flights because it’s too expensive to fly there. To make it a little more clear what they’re trying to do, I’ve gone back to Google Maps. First up we have the plans for Phase I.

So, in the first phase, they’re going to build a new concourse to replace the existing one at the Bradley Terminal. The north side will open in Jan 2012 with the south side opening in July of that year. They’re staggered because of the way they need to knock down the old one to keep enough gates operating during construction. You will notice that the current A380 gate on the north side will actually stick around after this is done because it’s grandfathered in and can’t be replaced.

They will also replace the two side security areas with one large one in the middle of the existing facility. All of this should be completed by September 2013 with a price tag of around $2 billion. That’s right. We get 14 gates, 3 more than before, along with a new fire station and some taxiway changes for a mere $2 billion. Keep in mind that JetBlue built an entirely new terminal in New York with 26 gates for $800 million (though they didn’t have to move taxiways around). This money is all being spent on what Roger Johnson admitted was an “expensive concept.”

But the absurdity really doesn’t begin until Phase II. This part hasn’t been funded yet, but it is expected to cost $3 to 4 billion. (I’ll put money down that the costs double by the time it’s done.) Here’s my map of the second phase.

As you can see, they will now build an additional concourse further to the west. The parking lots for Terminals 3/4 will now be razed and replaced with a new “Central Terminal Area” to serve the midfield concourse. There will be underground parking (and the TSA is ok with this?) to replace the existing parking lots. An above ground people mover (high enough to accommodate an A380 underneath) will connect the CTA, existing Bradley, and the new midfield concourse. But the most shocking thing is that the CTA will only serve the midfield concourse while the existing Bradley terminal will continue to have its own check in area. My head hurts.

And the best part of all? This will not expand the number of gates on property. Thanks to an ill-advised agreement with the surrounding communities, the number of gates is fixed at the airport, so they’ll just close down the remote gates at the far west end of the airport when these new ones open.

Oh, I almost forgot to mention. There’s a separate project that has yet to be funded that will put a people mover around the airport and connect it out to the parking lots and metro rail. I like that idea, but I hate the idea of spending what will likely exceed $10 billion on a project that could be done for far less if we weren’t trying to dazzle the world.

In my opinion, we could ditch the fancy design and put function over form here. Yes, I’d like to see a nice open airport with lots of light, but does it need to have a roof that looks like waves of the ocean? I would say not. I’d much rather have the user fees stay lower so that we can attract more service. Don’t get me wrong, there are some great things happening in this project that should certainly be happening, such as . . .

• Sterile connectors between Terminal 3, 4, and Bradley will be built so that travelers don’t have to leave security to get between them all. I wish we would see more connectors like that built all around the airport so connections could flow more freely.




• There will be far better shopping and dining options at Bradley. I realize that’s not hard to do since it’s pretty much devoid of everything behind security now, but this is a big deal in terms of passenger convenience.




• This project eliminates the need to use the remote gates. Amen.




• The new concourse will give more space between Bradley and T3 on one side and T4 on the other. That means that planes from each terminal will be able to push back simultaneously and taxi out without having to take turns waiting for the other side to go. This will be a huge productivity gainer for the airport and especially for American and Alaska which sit on the other side of this alleyway.




• They say they’ll redo the customs and immigration facilities so you no longer have to push your heavy luggage up a ramp after you get through the process. There is nothing like watching someone who is exhausted after 12 hours on a plane have to push their luggage up.

If just those things alone were fixed, you’d see a significant increase in user satisfaction at the airport. I’ll say it again, I think the design looks good, but we don’t need a good-looking design to be a functional airport. The more money that gets spent, the more that has to come out of passenger pockets down the line.

See more pictures from the reception

I thought I’d throw out a little Sunday bonus posting this week since I had the chance to stop by LAX Terminal 3 to see how Virgin America’s transformation work was coming along. Things appear to be going well and the move is scheduled to happen in early December. I actually kind of like the idea behind this project now that I think about it. You can watch my video of the area here. (Sorry about the poor quality, but I’m still working on figuring this camera out.)

You might recall that LAX moved out a few airlines on the east side of Terminal 3 so that Virgin America could come in and fix up some of the oldest non-renovated terminal space at the airport. This is actually a very good example of how a little money (maybe $5 to 7 millionit was $2.5 million or so?) can go a long way toward improving the passenger experience. When it’s done, there will be better seating, better lighting, and I’ve heard they’re even discussing turning the former outdoor smoking lounge in the middle of the terminal into a nice patio restaurant. Oh, and they old sports grill is already being replaced with a Gladstone’s local seafood restaurant. In addition, they’ve pushed the ticket counters further back so that there’s more queuing space without sending people out the door.

When I contrast this with the multi-billion dollar project LAX is putting together for the Bradley terminal (I’ll have that one this week as well since I went to a reception discussing the project), I have to shake my head. This is the right way to be improving the passenger experience in a terminal that was formerly not in good shape at all. Whether Virgin America should be spending the money on this kind of thing is highly debatable (there are better uses for a cash-strapped airline), but I still like the frugality of the project.

See a few still shots on the inside

Updated 12/12 @ 1030a to reflect actual cost of the project

It’s been a long but interesting few days here at PhoCusWright. Mostly, I’m here to meet with people and learn more about their companies, so I haven’t been attending too many of the sessions. That being said, there was one presentation I absolutely had to attend: “Customer Experience and Flying: Not an Oxymoron.” Oh yeah, and this was presented by United. I figured it would get ugly, and I was right.

Tim Simonds, Managing Director, Customer Strategy and Metrics, first gave a presentation that was entirely focused on the premium experience that United is trying to create. He used many of the buzzwords out there – they want to be “best in class” and they have a “bias for action,” and yes, he even pulled out the “purchase funnel.” Let me try to translate.

United is trying to provide an excellent premium product on its international fleet. The airline wants to really excel at delivering when the customer experiences the product, and this includes everything from the right seat/bed to little things as well . . . for the premium customer. The airline has a first class lobby at O’Hare to create a great experience on the ground, and they’ve even taken the agents that work there to the Disney Institute to give them training on customer service.

We were also shown a video with, as I jotted in my notes, “dramatic piano music and backdrops of Chicago.” This was all about the premium seat, and it made me wonder why they even bothered putting it together.

And that was that. Sounds good, right? Yeah, well if you’re flying international premium class then it is pretty good but there are a couple problems that came to mind immediately.

1. Not once was the back of the plane mentioned in the presentation
2. On time performance didn’t come up in the prepared remarks

I thought it was rather odd that these wouldn’t be discussed, but fear not, it came up immediately after the presentation was done. See, PhoCusWright has a Talkback feature where two people from the industry come in after the presentation to gang up and ask questions. This time, we had Josh Weiss, Delta’s Managing Director of delta.com and Self-Service alongside Jim Young, Frontier’s Vice President of Marketing, Sales, and Distribution (though he has a much longer history in the industry with other companies).

Apparently, Josh and I were on the same page, because he immediately addressed my first point above. He said something to the effect of, “I see a lot about the premium product but what about everyone else?”

Tim then clarified that United’s strategy is to provide a good experience for everyone and a great experience for premium passengers, but we didn’t get any details of what that might mean other than saying that good service was important.

Jim then jumped in and said that everything United appears to be doing is playing catch up. What are they doing to differentiate themselves?

Tim said that service would be the differentiator.

Josh wanted to know what else they were doing besides sending 200 people to Disney for training. What are they doing to help everyone else at the airline?

Tim said they’re having meetings with people every day and they’re really trying to make sure that management is setting them up to succeed. I’d guess few employees would say management is doing a good job of that right now, so there’s a lot of work to be done here.

On time performance did finally come up in discussion and Tim said they were making progress on that. I certainly hope so, because while the details didn’t come up on stage, I looked it up and found that they were 17th out of 19 airlines in September and they’re in 18th place for the full year. They’re also in the bottom half of the pack for lost bags (12 out of 19 in September) and they have well above the average level of complaints. So again, there’s a ton of work to do.

Josh had a good question that seemed to be almost an afterthought, but it was important that it was asked. He wanted to know what “class” the airline was trying to be in when it said it wanted to be “best in class.” Were airlines like Singapore and Lufthansa included?

Tim responded that no, they weren’t. They’re only looking at North American carriers. And then he said, “For us to say we want to be as good as foreign flag carriers is overstretching.” Ouch. So they want to be the best of the worst, apparently.

At this point, everyone started piling on. An SMS showed up on the screen that said, “All this focus on the customer but where were they in that video? I only saw a bunch of suits in downtown Chicago.” Good point.

Then an audience member noted that the magic of Disney is that they treat everyone well while United is “abandoning the back.” Tim tried to respond that you get a very different experience at the Grand Floridian then you do at Port Orleans (at DisneyWorld), but in my eyes that isn’t comparing apples to apples here. I thought about this as the session ended and we all left the room.

United (along with most legacy airlines) doesn’t understand which of its travelers are premium, so it’s pretty ridiculous for them to focus so intently on that area. It rewards its frequent fliers, but those people could have bought the cheapie fares for all their flights. Meanwhile, someone who has never flown United but buys a full fare walkup ticket won’t even get to sit in Economy Plus.

Putting it in DisneyWorld terms, you could have one traveler who goes to DisneyWorld 25 times a year, pays $80, and gets to stay in the Grand Floridian since he comes in so often. Meanwhile, you could have another customer who pays $500 for his only visit of the year and gets put in Port Orleans. That’s not how Disney treats its customers and it’s not how airlines should either. I won’t even get into the fact that even the lowest paying Disney guests are treated very well whereas United has a lot of work to do all around.

In the end, Tim took all the shots pretty well considering that his employer deserved them all, but I ended up almost feeling sorry for the guy. United has a lot of work to do, and they probably shouldn’t be giving a presentation with this title until they get all the basics in order.