ATW's 2011 Passenger Service - Virgin America Airlines

>> Wednesday, February 2, 2011

In a part of the world in which shrinking customer expectations are the rule rather than the exception, San Francisco-based Virgin America is like a brilliant lighthouse on the darkest night. The carrier, which launched operations in August 2007 and serves 14 destinations in the US, Canada and Mexico, is redefining passenger service in North America.

Perhaps it is not surprising that an airline bearing the Virgin name should be an innovator in customer service—a trait it shares with its older transatlantic sibling. According to President and CEO David Cush, it invests $3 million per aircraft outfitting its cabins and the money is well spent. When boarding a Virgin America A320, be prepared to step into the future: A cabin that calls to mind the ambiance of a sophisticated nightclub, with 12 shades of subdued mood-lighting to soothe and calm, and custom-designed leather seats in which to recline and relax.

Its Red inflight entertainment system powered by Panasonic Avionics is among the most advanced in the sky, featuring 9-in. video touchscreens offering 18 channels of live TV including child-friendly entertainment (and parental controls), up to 30 on-demand pay-per-view movies and a music library containing 3,000 MP3s worth of tunes and the ability to create one’s own playlist. Passengers also can track their journey with Google Maps or chat with other passengers via seat-to-seat messaging. Cabins are equipped with 110-volt power outlets, USB ports and RJ45 ethernet jacks and qwerty keyboard/remote controls. VX was the first airline in North America to outfit its entire fleet with Aircell’s Gogo inflight Wi-Fi solution, enabling passengers to stay connected aloft.

Customers traveling in first class relax in plush white leather massage seats offering 55-in. pitch and 165-deg. recline and can select such menu items as Drunken Pork Stew with Cabernet-Vanilla Pears, Roasted Eggplant and Zucchini Roulade, Creole Crawfish Omelette and Paneer and Vegetable Tikka.

Passengers in the main cabin enjoy leather seats with 32-in. pitch and can buy up to Main Cabin Select featuring 38-in. pitch. In either location they can order food on their own schedule via the interactive IFE system from an a la carte menu of sandwiches and wraps, cheese plates, snacks and beverages.

Even more impressive is that Virgin America achieves all this with a cost structure that positions it squarely in the low-cost camp. “We made sure that our costs stayed low in the production methods that we used . . . [including] a single fleet type, a highly productive workforce and a point-to-point network,” Cush tells ATW. But VX also is high-frills in the fashion of a stylish boutique hotel. “We decided to put our dollars where the customer will see them,” he explains.

The carrier takes a similar approach to recruiting customer service staff, using a battery of psychometric tests to identifythe most suitable candidates, and only about one out of every 100 individuals who apply gets in the door, Cush says. When it comes to hospitality training, the airline is influenced by leaders like Ritz-Carlton, Four Seasons and of course the Virgin Group companies. Cush emphasizes the importance of building a strong internal culture, something for which Virgin is known.

The customer commitment extends to operating performance; VX achieved an 85.5% cumulative A-14 ontime ranking for January-August 2010, a 99.6% flight completion factor and a baggage handling rate of 0.89 mishandled bags per 1,000 customers.

After flying through some of the most turbulent times the industry has seen during the first two years of its existence, Virgin America achieved its first quarterly net profit in the third quarter of 2010, posting net income of $7.5 million on a 28% rise in revenue to $202.1 million. Operating profit was $21 million, representing an 11% EBIT margin.

Continued growth is on the radar with an MOU signed last year for 40 A320 family aircraft valued at $3.3 billion at list prices, plus a further 20 options. The carrier projects that its fleet, comprising 34 A320 family aircraft at the close of 2010, will triple in size by 2016.

Quite simply, Virgin America has redefined the airline customer service experience for the better, raised the bar for current and future market entry and disproved the notion that there is nothing new or original to offer travelers. It is a highly deserving recipient of ATW’s Passenger Service Award.

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