A Magazine for airline executives
2016 Issue No. 4

Sabre + Skift Present:

On The Right Track: Virgin America

Virgin America has integrated flexible digital ancillary retail as part of its service model, and as reinforcement of its unique brand. Using digital touchpoints has helped the airline stay on top of its customer relationships, as well as boost sales of the products those passengers need most along the journey.

“From the beginning, the idea behind Virgin America has been to give travelers more control and more of the choices they actually want when flying, which is why our cabins feature Wi-Fi, power outlets and an on-demand inflight menu via our Red IFE [In-Flight Entertainment system],” said Virgin America Spokesperson Jennifer Thomas. “Because we know that everyone’s preferences are different when it comes to travel, we have come up with some new ways for our guests to customize their trip.”

The airline’s initial customization options are similar to what other airlines have done by unbundling services from the base airfare and offering customers the option of buying only what they need, but the airline has also created branded fares packages as retailing options, which give customers a “set menu” choice of select services they might want to include in their trip. The airline has called this branded fare Power Trip.

“Power Trip was designed based on feedback from our most frequent business travelers as to what they consider to be the most important flights perks,” Thomas said. “The new bundle features all of them in one neat package so guests can bundle and save between 30 percent and 50 percent each flight. Specifically, it includes priority security and boarding, ‘dibs’ on preferred main-cabin seating, a ‘Plans Change Pass’ that waives change fees, and a checked bag.”

The same Power Trip benefits can be purchased as à la carte ancillaries, if customers choose to do so, with a reservations menu option called “Customize Trip” on a separate page of the Virgin America site. The airline adapted the virginamerica.com website so customers could easily navigate through the choices along the path to booking.

“New ancillary changes were made possible by a technical change we made to the back-end of our reservations system last year to an ‘Electronic Miscellaneous Document,’ Thomas said. “This enables us to make these changes and ultimately improve the booking and flying experience for our guests.”

A customer-centric digital ancillary sales platform is essential to Virgin America’s brand image and its unique relationship with customers. The brand character is smart, fun, modern and technically savvy, which fits the way many of its customers identify themselves. The brand ethos as reflected in its design, character, product and advertising builds a connection with target customers, as well as ensures those relationships continue to evolve and keep up with the changing needs of customers. As such, Virgin America continuously monitors the effectiveness of its customer touchpoints.

“The idea behind Virgin America has always been to reinvent the flight experience for the better by offering travelers more options, more control, more content, more interactivity, and more customization and personalization of the air-travel experience, and more of the choices they actually want,” Thomas said. “Similarly, we want to provide our guests the ability to manage their experience with us via our digital platforms. Up until recently, that has focused more on making it easier for guests to manage their travel on their own if they desire. More recently, we’ve been moving toward increased customization of the experience in the area of new product offerings.”

By studying passenger habits and the choices they make, Virgin America identifies the types of products customers need most and when they are most likely to buy them. Virgin America has found that if ancillaries are presented attractively in the original booking process, then ancillary sales can increase early on in the travel process.

“Guests are increasingly interested in buying products when they are booking their tickets,” Thomas said. “Guests have always purchased products in the check-in flow, but we are finding that given the option, people are willing to pre-purchase a lot of options when they are booking their tickets. For example, a significant number of guests want to purchase a checked-bag option upfront, which is why we recently made that option available.”

But Virgin America also innovated in-flight retail through digital platforms in its Red in-flight entertainment system. Other airlines have since added such features. Thomas explained why this on-demand ancillary sale option works for Virgin America customers at this point in the journey.

“Our Red in-flight entertainment system has been one of the most frequently praised aspects of our product by guests, as well as a significant driver of ancillary revenue,” she said. “Red allows guests to purchase a high-quality meal in real-time, whenever they want it, and this any-time ease-of-use — including its ‘Open Tab’ function, a capability we pioneered in the U.S. market. Customers can swipe their credit card once at the beginning of the flight and make purchases — food, cocktails, movies etc. — for the entire flight. It is something our guests love that also drives purchasing and increases revenue. What we are doing now extends this type of customization to our website.”

Thomas shared the main objectives of Virgin America’s customer-centric retail design.

“As a guiding principle, we always strive to offer a consistent experience for our guests,” she said. “So that means that when implementing new offerings or products in our digital channels, we would like to also have a consistent offering in other channels at the same time. For example, via our guest contact center, at the airport,

"We are always looking to improve our guest experience in our digital channels, whether it is new product offerings or simply making small changes to smooth the experience. We are exploring new product customization options for our guests - similar to the Power Trip package."