Virgin America begins service to Orlando tomorrow. Remarkably, the three-year-old airline has stayed off my radar, when it comes to customer complaints. I asked David Cush, Virgin America’s chief executive, how he’s done it.
First of all, congratulations on adding service to Orlando. I live here, so I’m pretty excited about having a new airline in town. At the same time, I’m curious about your reasons for coming here. Orlando isn’t exactly a lucrative business travel destination. What’s the appeal?
Orlando has an incredibly strong year-round tourism economy and a great deal of convention traffic. The addition of Orlando also helps us address seasonality in our still growing network. As we grow we do have to balance out our network for seasonal traffic patterns – adding a sunny warm weather destination like Orlando helps us balance our winter schedules.
How is the Virgin America flying experience different from that on one of the legacy carriers?
Well, you have to fly with us to see the difference yourself! When you do fly you’ll notice the focus on guest service and see that the look and feel of the cabin is unlike anything else in the domestic skies.
Our planes are all new and undergo extensive modifications, with features like moodlighting system that transitions through 12 shades based on outside light and is designed to soothe guests and gradually awaken them on a red eye. It sounds goofy, but there is something about lighting that really changes the experience for people.
We have custom-designed leather seats with a more comfortable design – and we have a lot of high-tech features like standard power outlets near every seat and touch-screen personal entertainment platforms. In 2009, we became the first airline to offer WiFi on all flights. Red offers 30 movies, live TV, Google Maps, music videos, videogames, a seat-to-seat chat system so you can even chat to other guests onboard. In July we launched a digital Shop section, so you can shop from your seatback touch-screen. Probably the most innovative thing we have onboard is our on-demand menu — so guests can order a cocktail or meal right from their seatback screen any time during a flight. We’ve also won some major awards for the quality of our food, which is lighter and has more of a focus on organic ingredients.
How do you differentiate yourself from one of the discount airlines, with which you’ll be competing in Orlando?
We have a bit of a different focus. Our business model is based on providing travelers unrivalled value. People are looking for more for their money – and we believe that we offer the best value in the skies, with low fares and award-winning service and the best in-flight entertainment.
Virgin is known for entering industries where consumers are not getting a fair shake – and changing the equation by creating a better product at a great price. And when you give people a better product at a great price – you are going to do well, and that has followed for us. We’ve developed an incredibly loyal following of fliers and our load factors are very high.
One of the ways to evaluate an airline’s performance is through the numbers it reports to the Transportation Department. Virgin America isn’t subject to some of the government’s reporting requirements yet, but it’s my understanding that you track on-time arrival and lost luggage internally. Could you share some of those numbers with me, please?
You are right – we aren’t yet big enough to be classified a “major” carrier by DOT for reporting purposes, but we do track some of our on-time, baggage handling and other operational statistics in advance of DOT’s requirement to report.
We’re also currently working to invest in the automation needed to voluntary report all our numbers even in advance of our requirement to do so – we’re hoping to complete this in 2012.
When compared to the major carrier stats, our performance is excellent and leads the industry. For the second quarter of 2010, we achieved an 86 percent on-time ranking, which would have placed us third among all U.S. reporting carriers for on-time performance during the quarter.
For the same period, we also outperformed the majority of the industry with a 99.9 percent completion factor, which would have placed us second among all U.S. carriers when compared to DOT data. Our baggage handling rate for the same period was .82 mishandled bag reports per 1,000 guests, versus the industry average of 3.31 for each 1,000. That would have placed us first among all U.S. carriers for baggage reliability, when compared to DOT’s data for all of 2009.
How about your 2009 performance?
Our full year 2009 numbers also outperformed most of the industry, with 85.3 percent of our flights arriving as scheduled for FY 2009. The 85.3 percent on-time ranking would have placed us second among all U.S. carriers — behind only Hawaiian for on-time performance. Our completion factor was 99.8 percent — the highest among domestic carriers. And our FY 2009 baggage handling rate was 1.23 mishandled baggage reports per 1000 guests, versus the industry average of 3.91 mishandled baggage reports per 1000 guests. Our baggage performance would have placed us first among all U.S. carriers for reliability in 2009, when compared to DOT’s reported data.
Can you give me an idea of the size of Virgin America now, in terms of planes, number of flights and cities served?
We offer about 100 flights a day across our network of 10 destinations. We have 28 aircraft now on property — all new Airbus A320-family fleet. But we’re in the midst of significant growth with four new destinations in 2010 alone. Toronto, Orlando, Dallas Fort-Worth and Los Cabos all have opened or will open by year’s end.
Where do you see the airline five years from now?
We plan to add two to three additional destinations per year in 2011 and beyond. We’ve welcomed 1.5 million frequent fliers and nine million travelers since our August 2007 launch. We’ve created 1,700 new jobs at a time when most airlines are contracting and we plan to grow by 500 teammates a year (we will double our employee base over the next three years).
In July, we placed one of the year’s largest single aircraft orders at the Farnborough International Airshow – announcing plans to order 40 new aircraft and options for 20 more. Our fleet is projected to grow by two-thirds by the end of 2011 and will triple in size by 2016. As the only airline based in San Francisco, our growth has also helped make SFO one of the nation’s few growing airports. In spring of 2011, we will become one of two anchor tenants at SFO’s new Terminal Two. The $383 million project is anticipated to be completed in 2011 and the terminal will serve as our principal base of operations.
I know one of the cities you were looking at adding was Chicago. Could you tell me what happened there?
We still hope to bring our service to O’Hare, but we don’t yet have a permanent gate solution. ORD remains at the top of our list and we hope to continue to work with the city on a permanent gate solution in order to bring our award-winning low-fare service there in 2011. We’ve always said that we have a number of attractive cities on our list where our service in demand.
Back in 2007, when you launched, you worked with a company called Arise that specialized in domestic call centers. I believe the promise you made to customers at the time is that they wouldn’t have to talk to India when they had a question. How has that worked out for you? Do you still use Arise, or have you transitioned to a more traditional approach with your call centers?
We actually transitioned to another U.S. company – ACS – in 2009. It is a similar model, with Virgin America agents based mainly in Washington State. We have a unique hybrid model where we combine the traditional brick and mortar call center with a work from home model. This allows us to maintain many of the benefits seen in having a dedicated call center like culture building, training, and the advantages of an at-home workforce, like scheduling, built-in contingency, and scalability.
I wanted to ask you about customer service. I get very few complaints about Virgin America, and the one or two that I do get are resolved quickly. What would you say to a passenger who is trying to get the best possible customer service from an airline like yours? Any advice?
Well, thanks – that is always nice to hear. But I really think that guests should not have to ask that question. That is our job: to provide the customer service.
The idea behind Virgin America was to build an airline from the guest up and to reinvent flying in the U.S. In addition to our unique experience and amenities, as much as possible, we try to make our guest care approach a proactive one. To that point, Virgin America has a unique teammate training regimen with a rigorous focus on the guest. Every pilot, in-flight team member — our title for flight attendants — airport check-in staffer and headquarters employee also participates in a once a year “Refresh” training course. “Refresh” is a two-day brand bath that is unique in the domestic airline industry– with a number of workshops centered around improving the guest experience.