Virgin America Flies High in the Bay Area

Passengers leaving from San Francisco Airport on Tuesday morning may have been taken aback as they saw Barack Obama and Mitt Romney chatting amicably and posing for pictures at SFO’s Terminal 2.

Unsurprisingly, while the President and Governor Romney were campaigning elsewhere, these two talented gentlemen were actually impersonators hired by Virgin America to entertain guests on their inaugural flight to Washington D.C’s Reagan National Airport. The slogan for the event, worthy of the fictional Don Draper, was “Both Sides of the Aisle Win,” a double entendre meaningful both in politics and air travel.

Cheeky marketing techniques such as this have been a signature part of Virgin America’s strategy to raise awareness of its new routes and services.

While many airlines are rife with poor customer service, old planes, and uncomfortable seats, Virgin America boasts a fleet of sleek WiFi equipped aircraft complete with leather seats, and a workforce of enthusiastic staff both at the airport and on the plane.

Virgin America has steadily expanded in the Bay Area, and serves 18 destinations throughout the US and Mexico from SFO. In 2012 alone, Virgin has launched routes to Philadelphia and Portland, OR in addition to the Washington National service.

Lower Prices

According to San Francisco Airport CEO Tryg McCoy, Virgin America’s growth at SFO has dramatically reduced fares in and out of the airport.

“There has been a tremendous impact,” said McCoy.  “When they start a new route or increase the number of flights on an existing route, there is new competition and prices decrease.”

According to Virgin America’s VP of Corporate Communication, Virgin’s entrance on a route can reduce fares by over 30 percent, leading the Wall Street Journal to describe this phenomenon as “the Virgin Effect.”

More Bay Area Jobs

Homebodies also benefit from Virgin America’s presence, due to the jobs created directly and indirectly by the airline.

Virgin America, based in Burlingame, employs over 2600 employees, many of whom are Bay Area based.

In addition, the arrival of new flights creates jobs at the airport, local hotels, conference centers, stores and restaurants servicing new visitors.

According to an economic impact study done by San Francisco Airport management, the addition of one additional flight on an Airbus A320, which form most of Virgin America’s 52 aircraft fleet, brings in approximately 627 total jobs, adding $27.8 Million annually of personal income to the local economy.

More Revenue for the State

Given the current budgetary situation in California, the addition of a new flight also brings in substantial new tax revenue.

According to the same study, a new flight will bring in approximately $4.4 million in tax revenue to local and state governments.

As a result, the airline is regularly extolled by local political leaders.

San Francisco Mayor Ed Lee proclaimed August 8th “Virgin America Day” to honor the airline’s impact in the region.

Senator Leland Yee similarly praised Virgin America’s role as a job creator.

“As we look to how we can recover from our economic slump, the effort from Virgin…was critical,” Senator Yee told a small crowd gathered at Terminal 2.

Involved Employees

Front-line employees at Virgin America were equally enthusiastic about the company’s mission and their passion for their jobs.

“We’re real. We treat people the way we like to be treated,” said Foster City resident Jackie Leung, who works in Guest Services at SFO.

Leung, along with many of the SFO staff, has been with Virgin since their beginnings in 2007.

“I’m staying till we get 100 planes,” said Ray Wong, a Gate Agent.

For Tom Bailey, a pilot who previously worked at US Airways, the opportunity to focus on guest service was what attracted him to Virgin America.

Pilots at Virgin America will often brief interested passengers at the gate on the flight details and answer questions.

“It’s an overall friendly atmosphere,” said Bailey, who previously worked for US Airways, where he regularly flew with legendary Captain Chesley “Sully” Sullenberger.

According to Jason Fisk, Virgin America’s Guest Services Learning Coordinator, the fact that the airline employs a relatively young and new staff enables them to be more responsive to passenger needs.

“We’re very adaptable, very flexible and committed to the guest experience.”

New Frequent Flyer Benefits

As a sign of that adaptability, Virgin has recently launched its own elite Frequent Flyer program in order to compete with other airlines, which draw in customers with Frequent Flyer programs offering perks such as upgrades, lounges, and a fast-lane at security.  

John McLeod, Virgin America’s newly hired Senior VP of Sales, says that the elite frequent flyer tiers will enable the airline to better compete.

Although Virgin America will not offer complimentary upgrades to First Class, like its competitors such as United currently do, MacLeod stressed that Virgin America’s elite members will have a high likelihood of being able to purchase upgrades, with a prices varying between $79 for short-haul flights and $299 for cross-country flights.

“You won’t be number 40 on some upgrade list,” explained MacLeod, who previously worked at Calgary based WestJet.

Elite fliers will receive complimentary upgrades to premium economy, known as “Main Cabin Select”, where perks include additional legroom, free food and movies.

What’s Next?

According to MacLeod, Virgin America has 60 new planes that are scheduled for delivery within the next 18 months. During that time period, the airline will be evaluating potential new destinations to serve.

As the airline struggles to reach profitability after a $49 million loss this quarter, MacLeod said the focus will be on serving more corporate travelers and strategic expansion through new flights in the domestic market.

Also in the works are plans for improved partnerships with Virgin America’s sister airlines Virgin Atlantic and Virgin Australia. In addition, Virgin has continued to expand agreements with other carriers including a recent interline agreement with Korean Air.

These agreements, according to MacLeod, are an opportunity to reach travelers who enjoy the perks of earning and redeeming miles throughout the world.

It is Richard Branson, the flamboyant billionaire and Chairman of the Virgin Group, who best articulated Virgin America’s mission to Bloomberg Businessweek Magazine

"If everything is a joy, if you come onto a plane and the lighting is right, the seating is right, and the cabin crew is happy, you feel welcome," said Branson

"It's like you have come into somebody's home."

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