Virgin America, owned by British billionaire Richard Branson, has redesigned modern airline service. Rather than focusing on packing people into seats like sardines, flights on Virgin Airlines are comfortable, relaxing, and very high tech. The airline currently services major hub locations like New York City, Los Angeles, San Francisco, Boston, and Seattle.
Richard Branson, known in Britain as the playboy who founded the conglomerate Virgin Group, originally Virgin Records, is known around the rest of the world by the publicity photos released last year featuring Sir Richard waterskiing while a naked supermodel clung to his back. Branson is most active in Virgin Group’s new products, using his charisma and persona to publicize a new offering or service.
This is not Branson’s first foray into air travel. Virgin Airlines has been active in the United Kingdom since 1984, but its United States airline took off for the first time in 2007. Virgin America currently shuttles individuals from hub to hub, focusing only on serving major cities. Limiting the number of potential destinations to 15 has hindered Virgin’s growth, but it enabled the airline to turn profitable three years after its launch, in 2010, during the hardest decade that airlines have ever seen, a tribute to Branson’s business savvy.
Quality Over Quantity
Virgin America focuses on the quality of the flight, hoping that customers seeking comfort choose Virgin over larger, more popular airlines. From the Economy to First Class, seats are larger and lean back further than other airlines. First Class seats are exceptionally large and comfortable and feature massaging features. Low-lux mood lighting throughout the cabin creates a relaxed and enjoyable ambiance. First Class customers get all-you-can-watch free pay-per-view.
Flying Virgin America is as good as it can get for a techie. Through a Google subsidy, the airline offers in-flight WiFi and free use of ChromeBooks for all customers. Customers can order food from their seat, browse a SkyMall-esque catalog, and even view a Google Maps projection of their current location on LCDs affixed to every chair. Fleet-wide WiFi and power outlets at every seat have turned air travel into a potential home office at 37,000 feet, a chance for individuals on long-haul flights to work without the risk of batteries running out or lack of Internet access.
Is It Profitable?
Virgin America’s goal of making air travel comfortable may be just crazy enough to work. In fact, the company posted both profits and losses in 2010, but profits were only a fraction of a percent of profits posted by larger airlines. Virgin America posted increasing losses in 2011 as a result of rapidly expanding its serviced airports and rising fuel costs. Still, average capacity doubled from 17% to 32%, so not only is the airline growing in popularity, but it still has plenty of room to grow profit without increasing expenses. The average price of a ticket on Virgin America is between $150 and $300, in-line with (or cheaper than) non-stop flights offered by larger airlines.
Whether adding another option for air travel is good business or if the surge of popularity is due to Branson’s involvement is yet to be seen. It will be tough to compete in a highly regulated and competitive American air travel industry, but Virgin Group has the background necessary to carve out a profitable niche among techies and passengers willing to fly to specific locations, perhaps shuttling to a final destination, in exchange for a fair rate and quality service. If the airline continues to offer the latest and greatest in comfort to passengers, it will find a home among America’s comfort-obsessed population.