Sir Richard Branson Talks Virgin America, Points Programs & More
At an event celebrating new Virgin America service to Denver, TPG Senior Points & Miles Contributor Jason Steele had a chance to sit down with Sir Richard Branson. Read on for his interview, which touches on the importance of loyalty programs, customer experience and more.
Virgin America recently launched service to Denver, and to commemorate the occasion, the airline threw a party when the plane arrived at Denver International Airport on March 15 and another that evening at Denver's Art Hotel. Like most inaugural flights, this one carried its share of dignitaries, including Denver Mayor Michael Hancock, Virgin America CEO David Cush and even the founder of the Virgin Group, Sir Richard Branson.
Fortunately, I had the chance to spend a few minutes talking points and miles with the outspoken billionaire, as well as the carrier's director of loyalty. Read on for the highlights of these conversations.
JS: In talking to your loyalty program manager, he was explaining how you're trying to get people to come in for the brand experience and stay for the miles. Can you tell me a little more about how points and miles play into your brand?
Branson: I'm more into the customer's upfront experience, and I'm just trying to make sure that we are the best airline in the sky. But in order to be the best airline, you've also got to be competitive on points. I mean, there are some people who loathe United, but they still travel United because of points. There are some people who loathe one or two of the other big carriers, but will travel with them just because of points.
We know that we've got the best airline — Conde-Nast Traveler has voted us the best nine years out of the last nine years, we know we've got the best people, we know we've got the best entertainment, we know we've got the best Wi-Fi, but we've also got to be competitive on points. And then, as long as we are, then we should be able to win over pretty well anybody.
JS: As someone who represents airline brands around the world, how do you feel like Americans view points and miles and loyalty compared to Australians or those in Great Britain?
Branson: It seems to be like a heroine addiction. You know, I've met Americans who've flown, like 3,000 miles more than they needed to in order to get some points, billing their company for their journey. So it is an addiction.
JS: Is it a healthy addiction for both the customers and the airlines?
Branson: I think generally that it's a healthy addiction. There's no question that our points team has helped the airline tremendously. And obviously, every new route that we can start makes us that much more competitive in that area as well.
JS: I live here in Denver, and I'm curious — is this something you do every time you inaugurate a new city?
Branson: Actually, I haven't missed an inaugural flight since day one. So I'm very, very proud of Virgin America and all the staff who've created such a great airline, and the least I can do is turn up and add a bit of sprinkle dust.
JS: It sounds like a fun part of your job. What are the other fun parts that you enjoy?
Branson: I love people. I love meeting people. I love learning. I like to have a drink or two, and I like to party a bit. Sadly, I have to kick off to Turkey before the party tonight, so you'll have a drink on me.
Virgin America Elevate
I also had a chance to speak with Stuart Dinnis, Virgin America's director of loyalty. I asked him about the Virgin America credit cards from Comenity Capital Bank, and he was quick to admit that they need to make some improvement on these products over time, and he said they could add some more cards to the portfolio in the future. However, he did point out a unique feature currently offered: the Virgin America Premium Visa Signature Card's waiver of change and cancellation fees.
I also picked up an interesting tidbit about Virgin America's service to Honolulu and Maui via San Francisco and Los Angeles (LAX service begins this summer). As the only airline flying an Airbus A320 to Hawaii, it must implement payload restrictions on this route. This means that they must often limit the number of tickets they can sell, so you're much more likely to have an empty middle seat when you fly to Hawaii on Virgin America than you would on other carriers.
Finally, both Sir Richard Branson and Dinnis were eager to point out that Virgin America is trying to compete primarily on what they view as a superior passenger experience. The airline offers many unique touches such as distinctive mood lighting in the cabins, free high-speed internet service and the ability to order food and drinks from the seat-back entertainment system. In fact, the airline's in-flight entertainment system allows you communicate with other passengers, and even buy someone else a drink. Furthermore, its first-class product is far ahead of most other airlines' domestic first class, as it includes a footrest, a massage function and more legroom than its competitors. Finally, they're proud of the fact that passenger experience has been consistent across the fleet from day one, unlike other airlines that tend roll out new in-flight services at a glacial pace.
According to TPG's latest valuations, Virgin America Elevate points are worth 1.5-2.3 cents each. Points are worth about two cents apiece toward redemptions on Virgin America flights, but value varies widely for zone-based redemptions on partners Virgin Atlantic, Virgin Australia, Emirates, Singapore Airlines and Hawaiian Airlines. For more information, see my post, How To Book Award Flights with Virgin America.
What are your thoughts on Virgin America and its Elevate program?