Thursday, March 27, 2014

NEWS: Virgin America announces it's profitable!

FULL STORY HERE

Virgin is probably my favorite low-cost carrier. When they launched, they brought seat-back entertainment to every seat in coach, offered seat-to-seat chat, video games, mood lighting, hip design, and the ability to order drinks and food from your seat with the swipe of a credit card. They also brought a fun and hip attitude to travel that's been long gone from the perpetually-beleaguered legacy carriers for decades.

There were a lot of roadblocks to their success: their small route network, lack of partner airlines (even the other Virgin brands use a different point scheme and they don't coordinate their flights), the US legacy carriers challenging their legal status, and the fact that they launched right at the beginning of a huge economic downturn. Many of the naysayers cited their massive quarterly losses as proof that they wouldn't survive and that they wouldn't fly them because their points and status would vanish when the inevitable bankruptcy happened.

For whatever reason, Virgin recently decided to focus heavily on profitability instead of expansion and now they're in the black for the first time. Hopefully this can help them handle those "but my points will vanish when they go bankrupt!" objections that some veteran flyers have about flying Virgin.

Another reason they avoid Virgin is the fact that most are chasing elite status on one of the big 3 and they don't want to "waste" a big transcontinental run on Virgin. Additionally, Virgin uses a fixed-value points plan (like JetBlue and other low cost carriers), so the sugar plum dreams of a mileage redemption for international first class aren't fed by flying Virgin, like they are on big carriers in big alliances.

Now that the economy is picking up and the number of empty seats is dropping, prices are shooting up, airlines are gutting their elite programs, jacking up prices, and adding barriers to elite status (like minimum spending requirements for higher elite tiers). This means many people chasing elite status by doing lots of cheap mileage runs won't be able to qualify any longer. I think this might drive a whole class of flyers to consider flying Virgin who never considered it before.

Virgin's seat-to-seat chat in Economy

Virgin First: Does this fisheye lens make me look fat?

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