Virgin Atlantic CEO reveals changes that will make you want to book your next trip with the airline
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The head of one of the most iconic brands in aviation stopped by the TPG office for an episode of Talking Points. Shai Weiss, the CEO of Virgin Atlantic, joined Brian Kelly, The Points Guy, to discuss why the Heathrow expansion is essential to the airline’s plan become Britain’s second flag carrier, the roll out of the Airbus A350s and the Upper Class Suites, and how the airline is committed to shrinking its carbon footprint.
Weiss has spent seven years with the Virgin Group, including working alongside Richard Branson, and explains how that has given him a fresh perspective on shaping the brand and running a successful operation. On today’s episode, Weiss details how Virgin is constantly improving its product and listening to what passengers have to say. For Weiss, improvement means a commitment to sustainability, too. Virgin Atlantic is phasing out its four-engine jets — the 747s and A340s — in favor of more fuel-efficient 787s, A350s and A330neos. These two-engine planes will reduce the airline’s carbon emissions by 30% by 2024.
“We have to be excellent custodians of the environment and we are amplifying and really focusing on the local communities into which we work…If you really don’t need to fly, don’t fly. But in the UK specifically by the way, the domestic market Flybe average length of flight is 55 minutes. It actually is competing with road and trains, which are not always efficient if you want to travel…We think we provide a really important service to fueling economies in local communities, connecting people across the UK, and of course into Europe.”
Also in this episode, hear why Virgin is on the fence about joining SkyTeam, how FlyBe will fuel Virgin’s regional connectivity, and the airline’s effort to become a more inclusive and diverse company.
More Talking Points & Virgin Atlantic:
Featured image by Nat Roe / TPG
Brian Kelly: Welcome to this episode of Talking Points. I’m your host, Brian Kelly. When you think about airlines, very few are sexy and cool. A lot of times people think they just get you from Point A to Point B, but there are some brands out there that really do push the boundaries and make flying fun. And certainly Virgin Atlantic is one of them, and I’m excited to welcome our guest today, the CEO of Virgin Atlantic, Shai Weiss. Shai, thanks so much for joining us today.
Shai Weiss: What a pleasure.
Brian Kelly: So let’s just talk about your past. When you were a little kid, did you want to be an airline CEO?
Shai Weiss: I didn’t think I knew what planes were when I was a kid. So, no. No, I couldn’t say that I dreamt of being an —
Brian Kelly: Do you remember your first flight?
Shai Weiss: I do. It was to Amsterdam. My mother’s Dutch and my grandparents lived in Amsterdam and it was a flight to Amsterdam. I do, but I didn’t grow up thinking about becoming a CEO, definitely not in aviation. I grew up in Jerusalem in Israel. It wasn’t exactly the thing that people talked about.
Brian Kelly: Yeah. So was that first flight on El Al?
Shai Weiss: I think it was KLM, which is fortuitous, given the fact that they’re going to be our partners.
Brian Kelly: Yeah, given where you are now.
Shai Weiss: Yes.
Brian Kelly: So you ended up … you went to business school in New York City.
Shai Weiss: I did.
Brian Kelly: You did your stint in the Israeli Army, like all good Israelis, right?
Shai Weiss: Yep.
Brian Kelly: And there was no aviation. You weren’t in the air force or anything there?
Shai Weiss: No.
Brian Kelly: Just trying to figure out at what point in life you got pointed in the direction of aviation, because every CEO, some were rock-band stars and it’s —
Shai Weiss: I thought about aviation as soon as I started working at Virgin Atlantic. I was working with the Virgin Group and Richard Branson … I was a board member before I actually joined the company. So I was a board member on behalf of Richard and the Virgin Group since 2012.
Shai Weiss: As you said, iconic company. What a brand, what a heritage, you know sexy, fun, but it needed some help. So I joined the board on behalf of Virgin and that’s really when I started thinking about airlines. I’d always of course used airlines a lot. It was very important to me. I flew Virgin a lot, but I can’t say I’m one of the aviation geeks, and by the way, I’m only seven years in aviation.
Shai Weiss: Some of the people that I deal with have been on it for 30, 35, 40 years. Actually at Virgin Atlantic, which just celebrated on June 22nd 35 years, we have nine people who were there from day one, which we are now calling the Founders Club. So when you compare my time in aviation —
Brian Kelly: Yeah, you’re new.
Shai Weiss: Yeah, I’m just a baby here.
Brian Kelly: Would you consider yourself an aviation geek today? Actually, we had an intern this summer that had this talent. We would play YouTube videos of plane engines and he’d be able to actually identify the make and model of the engine and the plane it was attached to, which is wild.
Shai Weiss: In comparison to that, the answer is a resounding no. I think airlines, if you look at it, have really had people working in them from … you start off as either an apprentice or a cadet and you go through the ranks.
Shai Weiss: But I think once you take note that this is a consumer brand, we’re not just doing Point A to Point B these days. We’re doing journeys, which is the big thing that is really essential to the way we run things.
Shai Weiss: And it’s really about leadership and just general running of companies and thinking about opportunities. I don’t think you actually have to be just from aviation. Isn’t it cool just to think about things from a different perspective?
Brian Kelly: Totally.
Shai Weiss: So I think that’s kind of what I’m trying to bring to the story, but compared to the people that can recognize planes by sight, no, no.
Brian Kelly: But that’s good. You bring a different perspective.
Shai Weiss: Yes.
Brian Kelly: But talking about leadership, I mean, working under Sir Richard Branson, I mean, what an icon. I read his book recently, “Losing My Virginity,” which I highly recommend to anyone reading. It’s an incredible story about the Virgin Group.
Shai Weiss: Totally.
Brian Kelly: How has your leadership style changed working under Richard or with Richard?
Shai Weiss: Yeah, so I’ve known Richard now 15 years. So I think first of all just time has seasoned both … of course him, but definitely me. What is so inspiring about Richard is his intuition for what people actually want. What is the zeitgeist, what really makes them tick is second to none. That’s the first thing.
Shai Weiss: Second, when he finds an idea, he knows how to back it and he is all in, and he’s so excited about the prospects for the future. And the third thing that he does so well is he really tries to find people he trusts and likes and feels confidence in, give them the opportunity and then let them run. So if I can pick any one of these three dimensions and have learned anything, it will be on those criteria.
Brian Kelly: I think one of my biggest takeaways of the book, and I’ve met him a couple of times now, is that he truly does still have fun at what he does, right, even though Virgin Groups are huge? Is that a part of running Virgin Atlantic, having fun, even on an executive level?
Shai Weiss: It is. And I’ll give a live example. So I had a kind of New York … I know New York well. I had 30 minutes to kill. I was in Thompson, I was sitting on a bench. Richard calls, he wants to talk about immediately the announcement that we made about our desire to become Britain’s second flag-carrier, the competition at Heathrow and the ability to actually provide 84 new routes competing with BA and IAG more wholesomely.
Shai Weiss: And he said, “I need to study this all the way, but I love it.” And then he comes up with another idea of how to make it even more impactful. And that’s the fun part of it. Just talking to a really smart guy who’s got ideas.
Brian Kelly: And let’s talk about that announcement. It was probably one of the most caveated press releases I’ve ever read. Virgin’s mega-expansion, all these cool routes. Austin, here we come, but, but, but …
Shai Weiss: Only two buts. Only two buts.
Brian Kelly: But, but.
Shai Weiss: Yeah, it’s a double-barreled “if” statement.
Brian Kelly: OK. But let’s talk about the … I mean the biggest “but” in the room is the Heathrow runway, right?
Shai Weiss: Big one.
Brian Kelly: What the heck is going on with that? I mean it’s been back and forth and protesters, and is it going to happen?
Shai Weiss: First of all, it’s now on. It’s on and progressing quite well. We’ll go back to why are we even interested now when the runway is supposed to be built in 2026, if you believe the current schedule holds. I think it will be built because Britain needs it, definitely in a post-Brexit world. If you want to be competitive, aviation is an important part of it.
Shai Weiss: Connectivity is a big part of this and the capacity at Heathrow is constraining our ability to serve these unserved markets. So I think it will happen. What we’re saying is if it does happen, the current way of allocating the landing and takeoff slots is not adequate. I’ll give very simple facts. One in four routes is a monopoly route operated by our partners IAG and BA, and we think that we can do more. So 18 and a half million passengers fly on monopoly routes.
Brian Kelly: I saw all those routes that there was only one carrier, and they’re big routes.
Shai Weiss: There’s one carrier, and once you put it on paper, it really catches the imagination.
Brian Kelly: The airport authority has the ultimate — to give out slots?
Shai Weiss: No, it’s not the airport authority. It’s actually the government and the Ministry of Transportation. So we’re saying, “Right, we have a slot regime to allocate these slots.” Three hundred and fifty new slots come online when the third runway is built, which is really a once-in-a-lifetime opportunity. Here’s the fact, if we do not change the slot regime, Virgin, which owns less than 5% of the slots together with its partners, will get 10.
Shai Weiss: Our partners, our friends, competitors will get about 100. So we’re saying, “No, you have got to change the slot regime now because that determines how it’s going to come online and we think we should get about 150.” And by the way, if it’s not us, someone else should emerge as a significant competitor to British Airways and IAG.
Shai Weiss: By the way, they will still be the largest by far. So it’s really not a threat to them. It’s just more choice, better service, more domestic connectivity, more routes that will be competed and prices should actually fall.
Brian Kelly: For consumers.
Shai Weiss: Yeah, for consumers.
Brian Kelly: Britain, with their sliding deadlines on everything these days, it’s so confusing for us on this side of the pond to be like, “When do decisions actually get made?”
Shai Weiss: A decision has already been made. So now it’s all in consultation and decisions. There’s some very big policy papers which are earmarked for the end of this year. We believe that is when the slot regime will be actually ratified or changed.
Shai Weiss: Of course we’re advocating for this massive change, and then other pieces of legislation will happen over the next year or so. And then of course it should go into a live project. This is a very big project. You would say in China it would have taken half the time. But there’s objections, there’s people, there’s noise.
Shai Weiss: There’s a lot of environmental matters, which I’m sure we’ll talk about, all come into play here. But when a third runway is built and if the way slots are allocated, the regime governing that is changed over the next six to 12 months, we believe we are best positioned to become Britain’s second flag-carrier because Britain deserves better, so do consumers and businesses in the UK.
Shai Weiss: That’s the simplicity of it. This release of course, it’s imagine if and imagine what can happen here. We believe we’ve shown our ability to grow. We’ve just announced new routes to Tel Aviv, which opens next week. Mumbai, October 27th. São Paulo, early next year. Gatwick to Boston and New York. We bought a company called Flybe, which we will rebrand to be called Virgin something, not today, and all that to create fee in the UK. So we’re not just talking, we’re putting capital, assets, attention to show that we are in this for real.
Brian Kelly: Speaking of Flybe, this isn’t Virgin’s first go at trying to do a domestic route network, forgetting the name, what was it?
Shai Weiss: Little Red.
Brian Kelly: Little Red.
Shai Weiss: Let me help you out there.
Brian Kelly: So Little Red didn’t work. Why do you guys feel convinced about Flybe?
Shai Weiss: It’s a very fair question. First of all, let me just go back. Businesses, not pilots, are allowed to make mistakes and it’s only what we learn from it. So we, of course, studied what happened with Little Red. Little Red was called Little Red. It flew from Manchester into Heathrow.
Shai Weiss: It was before we understood the importance of Manchester to Virgin Atlantic, which we’ve now really amplified our presence there and have more plans into the future. And the cheeky answer to the difference between Little Red and Flybe is eight and a half million passengers. It flies today with around 75 planes in the domestic market at about 80% and above load factor.
Shai Weiss: It’s a company that is 40 years old, has had a rough patch. We’re going to show it a lot of love, get it back on track, rebrand it, and then really orient it towards feeding into Manchester and Heathrow to our long-haul routes, but also growing the domestic market, which is so necessary. So I think that that’s the idea. And of course, it’s not Little Red.
Brian Kelly: It’s interesting. In the Netherlands there’s this new flight-shaming, especially on shorter-haul hops when trains are available. Some people would say, “Shai, you’re crazy.” With flight-shaming happening on short routes, why did you just buy a carrier? Or do you think the flight-shaming thing is not going to continue, it’s not a threat to your Flybe business?
Shai Weiss: First of all, flight-shaming, is it a threat to aviation in general? So I would first say that with our vision to become the most-loved travel company comes a great responsibility, first to our people and our passengers. We have to be excellent custodians of the environment and we are amplifying and really focusing on the local communities into which we work.
Shai Weiss: So with the responsibility towards the environment, Flybe and flight-shaming, absolutely, if you really don’t need to fly, don’t fly. But in the UK specifically, by the way, the domestic-market Flybe average length of flight is 55 minutes. It actually is competing with road and trains, which are not always efficient if you want to travel.
Brian Kelly: To travel to Heathrow.
Shai Weiss: And just from the north to the south. So we think we provide a really important service to fueling economies in local communities, connecting people across the UK, and of course into Europe. Now is it to say that we should not be looking at electrification? That’s actually … Flybe is a great place where we could start with that exercise because of the size of the planes … currently flying the Q400’s … so much more places to play with things that are so important to the environment.
Brian Kelly: Yeah. So speaking of environment, I know Virgin Atlantic has pushed the boundaries on renewables or fuel sources and trying all sorts of new fuel types. How have those tests gone and will we see a day soon where the fuels that planes are using are more sustainable?
Shai Weiss: I’m going to just take a step back before I answer exactly on the fuel, because if you are working on an airline these days, the three things that you need to focus on is, number one, is your fleet. If you do long-haul traffic or travel, having the best planes, the best kit is necessary. And I’ll give examples, A350s, which are replacing 747’s and A340s, so moving from a four-engine to a two engine is a 30% reduction in CO2.
Shai Weiss: Virgin Atlantic would have reduced its own CO2 by 20% for the 10-year period ending in 2018, and by 2024 we would have reduced by another 30%. Our average age of the fleet by 2024 will be 5.3 years.
Brian Kelly: Wow.
Shai Weiss: That’s the first thing that any airline should do. Second thing you need to do is, indeed, sustainable aviation fuel. We are working under the CORSIA framework, which of course is binding in Europe. It’s all versus the 2019 and 2020 baselines, and you need to show improvements and reduce by 50% by 2050.
Brian Kelly: So as a CEO, that’s got to be hard to increase revenues and passenger accounts, but while keeping your —
Shai Weiss: And we will do that. We will do that. We will grow our ASK. So the average seat kilometers, we will grow by 10% and reduce our fuel by 20%.
Brian Kelly: Because of these beautiful planes.
Shai Weiss: Because we use new planes. Now sustainable aviation fuel, we’ve had a major cooperation with a company called LanzaTech, but we’re expanding our remit and I would hope to see realistically 10% to 20% of renewable or sustainable aviation fuel coming in online in the next five to 10 years. But that’s not for certain.
Shai Weiss: And the third thing is, you bought the best planes, you’re putting effort and capital into sustainable aviation fuels, and the third thing is of course, whatever is left over you need to offset and you need to find amazing projects that do that. And of course on the wrapper of that is single-use plastics and food and pre-ordering food on board so you don’t waste. All that is now top of mind of any leader in aviation for sure, but it should be in every company.
Brian Kelly: All right, let’s take a quick break right here and we will be back. Let’s talk about the shiny new plane. What is it like as an airline CEO to go to Airbus? Is it like buying a car? Do you give the check and they give you the keys to the plane? I’ve actually heard that some airlines will sign the deed in the sky due to tax regulations where they don’t want to sign on the ground.
Shai Weiss: We did not do that, OK. Let me just be clear. We signed it on the ground. How is it? It’s not like walking into a dealership and saying, “I’ll have one of those in the green.” It’s not like that. This is a well-thought-out process. First, the evaluation, when do you need a plane? And airline executives know that two things really matter in terms of the economics of their airline: the network and then the planes that fly that network.
Shai Weiss: So for us it was pretty obvious that we needed to replace the 747s, as much as we all love them, and the passengers love them by the way. Still, the highest net promoter score is on a 747 out of Manchester, but we needed to replace the 747. The A340 did its job, is getting a bit tired, and it’s a four-engine plane. So the first thing is we wanted to replace it with a similar size, but much more advanced technologies.
Shai Weiss: We then looked at the market. Of course there are two major competitors. The A350 came up trumps for a number of reasons, not the least is of course the environmental footprint and the noise contra, which is 50% better than the 747. So now you choose the plane, and then the fun part begins, right? How do you bring the Virgin spirit not just to the outside, but to the environment and the journey inside?
Brian Kelly: The TPG UK we’re all over … We love getting on first flights and delivery. And so Nicky Kelvin, who’s our flight reviewer extraordinaire, loved his experience. Pretty solid score. Pros, flawless —
Shai Weiss: Can you please say the score?
Brian Kelly: This score was 87 out of 100, but I don’t think we’ve really had anything much higher than that.
Shai Weiss: We felt pretty solid. I think we got the highest score, and we beat the competition.
Brian Kelly: BA’s club suite on the A350 —
Shai Weiss: The 85.
Brian Kelly: … came in at 85.
Shai Weiss: That’s right, yes.
Brian Kelly: So kudos to you.
Shai Weiss: Kudos to the team, not to me. I didn’t do anything. It was only the team. Flawless ground experience. Can we say that again, please?
Brian Kelly: Flawless ground experience. Flawless. Flawless. You’re perfect. Great new seat, nice soft-product amenities, especially the mattress pad. Cons, slow meal service, awkward tray-table positioning and lack of storage.
Shai Weiss: Yep.
Brian Kelly: So I want to start with the cons. Do you think those were valid concerns?
Shai Weiss: Absolutely. So first of all, the good news is we’re on top of all these three things. The tray table is indeed something that needs to change and it will be changed as of October.
Brian Kelly: Wow, really?
Shai Weiss: Yeah, we’re going to change it. Remember, this was the first plane. This year we’ll get four planes. There are eight more coming.
Brian Kelly: So you’re able to change the upcoming installations, I’m sure it costs money to do a change order, but you —
Shai Weiss: Yeah, it costs a lot of money.
Brian Kelly: Yeah.
Shai Weiss: But this is a complicated machine, and a complicated environment. There are millions of decisions there. Can I say wholeheartedly that every single thing is perfect? Absolutely not. You said that no one has got a 100 score. We’re aiming for 100. That’s our style. The tray table we’ll sort out.
Brian Kelly: To get a 100, you’re going to have to put showers on board.
Shai Weiss: That we’re not going to do. That’s definitely environmentally unfriendly. Maybe clean.
Brian Kelly: I’ve never thought of it that way.
Shai Weiss: Can you imagine carrying all that water for a shower? Seriously? We’re not doing that. First of all, our service shines. No matter what we talk about, the environment —
Brian Kelly: The service itself was great. It was just like the —
Shai Weiss: So I would say those are teething … That’s just … It was a flight, we’re going to get better and better. The teams onboard need to get used to the service schedule and how it all gets prepared and the galleys and the complexities, and then the storage, we will find ways of increasing it.
Shai Weiss: And then the good news is we’ll take all those learnings and apply them to the beautiful order that we’ve just put in for 14 A339-Neo’s, which start coming in 2021, which I promise will be even better than the A350.
Brian Kelly: Can you give me any inside scoop? Are you going to have the lounge area? So are you getting rid of … the bar got taken out for the lounge area.
Shai Weiss: Replaced, we didn’t take it out. Upgraded, actually.
Brian Kelly: Upgrade. OK.
Shai Weiss: Yes.
Brian Kelly: You’re a good marketer.
Shai Weiss: That’s right. I do work for an airline.
Brian Kelly: So let’s talk about the Neo’s, the A330-Neo’s. What’s going to be special about that experience?
Shai Weiss: Well, so first of all, again, I’m going to start with the environmental footprint because it’s so important. It’s going to be 13% more efficient versus the A330’s, which they replace. So that’s the first thing. And in terms of, I think, what you’re seeing on the A350 is now the blueprint of Virgin Atlantic of the future.
Shai Weiss: I’ll actually start with some of the things that I really like, starting from the back. Economy class, the screen. The screen on board the A350 in economy is larger than our upper-class screen today.
Brian Kelly: Wow.
Shai Weiss: That’s already telling you something. In the premium cabin, it’s simply stunning. And then the fact that we’ve moved our new upper class, everybody’s facing to the outside, which is quite unique, but the biggest change there for us was the seats.
Shai Weiss: And we talked about the fact that we’ve advanced or changed the bar and put it into the 21st century, which is now the loft. It’s really a place to actually have some fun, but work together, use a screen on Bluetooth and so forth.
Brian Kelly: Did the loft get rowdy on your flight over here?
Shai Weiss: I was on —
Brian Kelly: You weren’t on it.
Shai Weiss: No, I was on the … I heard it did, and I heard it worked very well and people loved it, but it’s also a place to work, convene, have some fun. And the nice thing about it, you can sit through turbulence because of the —
Brian Kelly: The seat belts.
Shai Weiss: … the seat belts, which is small things. So all that is the inspiration for the A339. I can’t say much more because we haven’t finished it, but you can see that we can take it even further and probably apply more technology.
Shai Weiss: In upper class today you can order food and drinks straight from the seat. Wi-Fi is advancing. We’ll see what we can do with it.
Brian Kelly: I love my Bose Bluetooth headphones, and to be able to have the wireless —
Shai Weiss: Bluetooth.
Brian Kelly: … the Bluetooth at your seat would be —
Shai Weiss: That may be there.
Brian Kelly: That may be there. You heard it here first. It might be there. Upper class gets a lot of attention, but economy you’ve been making a lot of improvements as well, in addition to the larger screens. For somebody who’s never flown Virgin and they fly in economy, how would you sell the Virgin economy experience versus the competition?
Shai Weiss: I’ll start with a very simple thing. We are a full-service carrier and we aim to please everyone on board. And one of the design principles we have for our cabin crew is no matter … Once you’re on a plane, you get everything you need. Water, some …
Brian Kelly: Some, yeah.
Shai Weiss: Water, drinks, food, a smile and an attentive and really loving group of people, who want to get you to your destination. That’s the first thing. Second thing is where we’ve improved is of course if you look at the seats, they’re just … in terms of their ergodynamic design, they’re spacier, there is a nice headrest. And of course, I said that the entertainment systems are so much more advanced.
Shai Weiss: What we’ve also done in our economy product, there are over 30 seats, which are what we call Economy Delight, with extra leg room. So if you’re looking at the best economy class in the sky, those are one of those seats. So that in totality is a pretty solid experience which competes with any of the economy products, definitely versus low-cost carriers.
Brian Kelly: Have you made a decision yet on the 787’s? Are you going to retrofit with these beautiful new cabins?
Shai Weiss: So the 787 only arrived from 2014, so they’re not very old. And I think if you look at the cycle, so first we’re going to take the A350s, [in] 2021 the A339s come along, and then we’ll probably have to indeed retrofit the 787. That will happen. It’s usually a cycle of between seven to 10 years when you change everything, and it will be nice to really upgrade them to the —
Brian Kelly: How are those engines, by the way? Is that problem almost over with?
Shai Weiss: Yeah, it’s been a long cycle. And we were talking about the Rolls-Royce engines on our 787 planes.
Brian Kelly: I think I saw one being worked on at … I recently toured Delta’s tech-op center and their engine repair shop.
Shai Weiss: Yeah, they do tend to be repaired. It’s not repaired, it’s actually just checked. Let’s first start, it’s not a security issue. They’re safe. It’s really what is the economic life that you can get out of them? And we, like everybody else who’s got them, have had issues. I would say we are ahead of everyone else. We were always ahead of the curve.
Shai Weiss: So when we first saw that there were problems with the 787, we took the bold decision to go get four planes, four A332’s, we just got them. We bought planes so that we can provide a continuous service for our passengers.
Brian Kelly: Are those are the Air Berlin planes?
Shai Weiss: Yeah, the Air Berlin planes, which we then retrofitted again. And by the way, the net promoter score of them has moved dramatically up, which just tells you that it’s the service actually —
Brian Kelly: What’s got to be the bottom? A340?
Shai Weiss: A340’s, as you would expect. But they’re retiring soon. I’m hoping, going back to the 787 issue, that if we indeed get to what we call, that all our planes in the 787 configuration are flying, we hope to get there by year-end. We will be retiring the A340-600’s.
Shai Weiss: And the problem was acute. We were ahead of it, we didn’t cancel flights, and we just want to be out of it with our partners at Rolls-Royce, which are putting everything they can behind this issue.
Brian Kelly: All right, let’s take a quick break right here. BRB. Let’s switch a little bit to loyalty, because our listeners would hit me if I didn’t ask anything about it. So I know Flying Club recently got spun out to the Virgin Group.
Shai Weiss: And Delta.
Brian Kelly: And Delta, yeah. So I love Flying Club. It’s a chart-based … it’s really low mileage levels, comparatively speaking. You know what you’re going to get if there’s availability. Your partner, Delta, has rankled some flyers because they’re now on the more dynamic pricing and kind of roll the dice and see how many miles it’ll cost.
Shai Weiss: Revenue-based.
Brian Kelly: Revenue-based, dynamic pricing, however you want to call it. I think there’s a little bit of stress out there, “Oh no, is Virgin going the way of Delta?” And I know there are new changes being announced next year, but is that one of your priorities?
Shai Weiss: When we looked at Virgin Atlantic and considered why we were not doing as well as we wanted to do, we know there’s a tremendous preference for Virgin Atlantic. Two-to-one in the UK and about one-and-a-half-to-one in the U.S. versus all our competitors. We ran, as you know, pretty smart surveys. I think you helped us out.
Brian Kelly: Mm-hmm (affirmative).
Shai Weiss: There were three impediments: network, price and loyalty. Network we’re solving, growing Flybe, Air France/KLM joint venture, Delta joint venture. Price was all about competing with the low-cost carriers such as Norwegian and that was when we imagined our economy cabin and introduced the ‘Light … the classic and the Delight, which we mentioned just previously. And the last piece is loyalty.
Shai Weiss: What we considered is, we’re doing something against the grain. Everybody’s bringing back their loyalty in-house, we’re spinning ours out. And you can say, “We’ll see how that works,” and we will have to see how it works. The idea is to benefit from the federation of Virgin companies and the strong presence in the UK, because what you see in a traditional airline, unless you’re a business person, the level of interaction between a passenger and the airline is once every two to three years.
Shai Weiss: We wanted to give them much more of an experience. So we think that through the spin-out and offering it through a federation, there’ll be much more opportunities to earn and burn your miles and that will offer something else. Of course the miles and the points reside outside of us and we are in charge of what we offer our passengers.
Brian Kelly: So how many Flying Club miles or whatever the new program’s going to be called —
Shai Weiss: Points.
Brian Kelly: … to go to outer space on Galactic?
Shai Weiss: A billion. No, I don’t know.
Brian Kelly: It comes to numbers there, actually that might not be —
Shai Weiss: I think actually, if I’m not mistaken, I think it was once pegged at two million.
Brian Kelly: Yeah, I remember that at the beginning.
Shai Weiss: There was a number. I think it’s two million.
Brian Kelly: When do you think you’ll take your first flight to outer space?
Shai Weiss: I don’t know that.
Brian Kelly: Do you want to?
Shai Weiss: I do, actually. I need to negotiate —
Brian Kelly: Can you non-rev to outer space?
Shai Weiss: I’m not sure we can. Yeah, you can do standby, right? And I think it’s more of a negotiation with my family, but I would certainly want to do it.
Brian Kelly: So back to loyalty, so you will see it become more of a fluid currency?
Shai Weiss: It’s now spun out. It truly has spun out into our partners and owners, Delta and Virgin Group. But what we will offer, I think we’re going to try and find new ways of making it much more accessible just as we’ve kept over the years. But what’s nice about our loyalty program is one of the things that you can now do … of course you can earn and burn Virgin miles on Delta and Air France/KLM. That’s really the thing, the last impediment that we’ve removed.
Brian Kelly: You’re basically Sky Team Light. Why haven’t you just fully bitten the bullet and joined Sky Team?
Shai Weiss: I think we were talking about that exact point in a meeting with our partners yesterday, and I would say we’re inching closer and as soon as there is a reason to join that program, in terms of the technology or an advantage to our passengers, recognition, we will join. But it’s got to be with an advantage, not just for the sake of it.
Brian Kelly: All right. I want to move to something that I admire about Virgin and your company, I mean, and your leadership, is that you guys really do have a commitment to diversity. You guys have openly stated that you want to double the amount of black, Asian and minority ethnic representation at the company to 12%. How is that going and what are some of the things you’re actually doing? Because I struggle with that at The Points Guy, and finding that diverse talent really does make you a better company, but it is challenging.
Shai Weiss: It’s very challenging. But like I said, “most-loved travel company” comes with a responsibility. Again and again we remind ourselves it’s also responsibility to people. Virgin Atlantic is an inclusive company. We set very, not aggressive, but very ambitious terms and objectives for 2022 indeed, moving our black, Asian, minority ethnic up to 12%, but we should also mention gender at 50%. And the signs I’m seeing are very, very good.
Shai Weiss: You know how it is, it’s very simple. You identify a problem, you set a target, you know it’s the right thing, we’re going to go at it. Here’s a few statistics that make me feel that we’re on the right track. If you look at our leadership team, the top 130, 150, we’re already 45% female, which tells you that … Around my table we’re not, we’re probably about two out of 11, so we can do better.
Shai Weiss: But if you look at the cohort that is coming up, there is no doubt that time will heal that problem. If you look at Virgin, it’s a very English company. If you remove, just hear me out for one second, if you remove pilots and cabin crew from the number, we’re already at 12% black and Asian minority. So we need to do more and I’ll give you a very good example. We need to do more to recruit in the cabin crew and the pilot community.
Shai Weiss: By the way, female representation in pilots is notoriously low, and we’re going to do anything we can —
Brian Kelly: And it’s the same with technology. We look at getting more women and people of color into technology. You have to start way earlier. You’ve got to build that pool.
Shai Weiss: Absolutely.
Brian Kelly: How far back are you going to get more people in?
Shai Weiss: We’ll go back to that, but I just want to go … I’ll give you a really … it’s an obvious point, but it’s so powerful. So a lot of people want to be cabin crew at Virgin Atlantic. It’s a great job with a great company and people who love traveling and love serving want to do that job. You have to know how to swim, but do you actually need to know how to swim before you do the job or do you need to know how to swim when you are accepted? We found that to be a discriminatory practice and we’ve changed it.
Brian Kelly: Really?
Shai Weiss: Yeah. So we’re saying, “You don’t know how to swim? That’s not a problem. If your attitude is right and you want to work for us, we will tell you where we can help you learn how to swim.”
Brian Kelly: That’s really interesting.
Shai Weiss: For example, in India we’re opening routes, we needed more Indian crew and you found that a lot of Indians just haven’t learned how to swim. It doesn’t mean that they can’t learn how —
Brian Kelly: Yeah, they can figure it out.
Shai Weiss: They can figure it out. That’s exactly an example where unconscious biases have entrenched in the way we operate. That’s what we’re going to change.
Brian Kelly: Interesting. So let’s take a look into the future. What are the biggest travel trends? Between hyperloop and unmanned drone taxis, there’s a lot of moonshots out there in the travel industry. What are some of the biggest things that you think we’ll actually see that changes the way we travel within the next five years or so?
Shai Weiss: Well, the holy grail of course is the personalized journey. We have today about five and a half million passengers. Every single one of them has a unique journey. Even if they’re going to the same place at the same time to the same conference, they don’t want to eat the same thing, their sleep patterns, they don’t like the coffee the same way. They want to get to the airport in different way. They want to be met on the other side or not.
Shai Weiss: So if we were able to find ways of really using the data and the information with the consent of our passengers to provide a unique journey, that I think will be quite unique. By the way, we’ve changed just recently the way we run the company. We already had a customer vertical, rather than calling it customer-experience people. Daniel Kerzner, who you know, he is now director of customer journeys, which means that it’s an end to end.
Shai Weiss: It’s not just the time on the plane, it goes far wider. So the two trends I would say is how do you try and do the end to end? I mean really, including if you could crack the code on how you arrive in a terminal. The terminals are so inefficient and such a stressful place for passengers. So if you’re able to do the journey from end to end and personalize it, I think that’ll be quite unique over the next five years.
Brian Kelly: In terms of the journeys, are you also getting into the experiences once passengers arrive and trying to get into that?
Shai Weiss: The journey is really from start. When you started your journey, till the time you come back and then you’re immediately of course in consideration again. So we’re not constraining ourselves. We are starting first just to make sure that our house is in order. We can do so much more. And then of course expand it and collaborate with partners, whether they are in aviation, hotels. We’re working now deeply with Virgin Voyages, Virgin Hotels and other great companies.
Shai Weiss: But it’s all about the completeness of the journey. And by the way, the next thing would be matching the customer journey to a people journey, our own people. Making sure that our people are recruited and then trained to match the customer journey in terms of what they can do for the service. Because at the end of the day, the magic formula for Virgin Atlantic has always been its people.
Brian Kelly: Final question. Virgin Atlantic flies to a lot of destinations. What’s the one that you absolutely smile ear to ear when you get on the plane, that you’re most excited to go to, or one that you would just highly recommend to anyone listening? It’s like, “Yeah, no, I want to fly Virgin Atlantic now.”
Shai Weiss: So first of all I would say, and this is awkward, but the trick on aviation airline CEOs is they always try and find a route that is really convenient for them. And of course we are starting to fly to Tel Aviv.
Brian Kelly: Tel Aviv, yeah.
Shai Weiss: And I feel a bit odd about that, but you know, just the sensation —
Brian Kelly: Did you add that just because you wanted it?
Shai Weiss: No, of course, because it’s convenient for me. Of course. It’s all about me getting home. I think having the ability to see a Virgin plane landing —
Brian Kelly: Are you going to be on that first flight?
Shai Weiss: No, I will not be on the first flight. By the way, I’ve never actually worked in Israel. So for me it’s kind of … I think it’s going to be a great service. There’s a great crowd there. There are a great desire, but I kind of feel proud that Virgin Atlantic is going to come to a place where I grew up.
Brian Kelly: Well, I am actually going to a friend’s wedding in Tel Aviv on New Year’s Eve and I booked using Flying Club miles — Tel Aviv, London, and then home to New York on the A350.
Shai Weiss: Oh wow. OK.
Brian Kelly: I’m sure I’ll try the suite before then. Shai Weiss, thank you so much for joining us. Congratulations on all the achievements in flight, on the ground, and look forward to flying on Virgin Atlantic soon.
Shai Weiss: Thank you so much.
Brian Kelly: Safe travels.
Shai Weiss: Thanks.
Brian Kelly: Again, I’m your host Brian Kelly, and this episode was produced by Margaret Kelley and Caroline Schagrin. Special thanks to Christie Matsui, my legendary assistant. And if you’ve been enjoying Talking Points so far, thank you. And please leave us a good review on Apple podcast, Spotify, or wherever you get your podcasts.
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