Virgin America is the only airline based in Silicon Valley, and it has learned to think like its disruptive clientele: “We see ourselves as more of an incubator,” says chief marketing officer Luanne Calvert. It has experimented with everything from in-flight social networks to rethinking how to buy tickets, and the rewards are Valley-like: 2014 revenue of almost $1.5 billion and a $306 million IPO.
The feat is all the more impressive because, since airline deregulation in 1978, about 250 new airlines have opened shop and failed. At first, Virgin America didn’t appear to be any different: It lost money from its 2007 launch until 2013. But it turns out that the airline was acting like a Valley company—evolving the service, and trusting that a business model would follow.
Its successes are many. Virgin put together a group of about 30 entrepreneur frequent flyers called VX Next, who act as a brain trust, generating ideas for the airline—for free. They wanted an in-flight social network, so Virgin collaborated with Here on Biz for an app that connects flyers with fellow travellers on their plane, on other in-air flights, and even at the destination. It’s created “almost a tribe,” Calvert says, of connected travellers who build together before ever landing at a conference.
In 2014 it unveiled a sleek, headline-grabbing website redesign that’s set the benchmark for all ticket-buying sites, and expanded to include more cost-effective flights (instead of its initial sole routes cross-country, and to LA and Vegas). The airline was helped out by its own rabid fan base: 30,000 people signed a Change.org petition to give the airline two gates at Dallas Love Field (which it received). Virgin returned the love—and cash—to its believers: It offered stock options to frequent flyers before the company went public. And it even made an in-flight safety video good enough to go viral: It was watched 1.5 million times its first week.
- New destinations: 30,000 passengers signed a petition to give the airline two gates in Dallas. It worked.
- Feedback encouraged: The airline assembled a team of 30 frequent fliers to help it develop new ideas.
- Like Facebook for fliers: A social network connects passengers—on the same plane, other planes, and at a destination.
Illustration: Chris Philpot
The airline’s in-flight safety (music) video was such a hit, it’s been viewed more than 10 million times on YouTube.
[Photo: courtesy of Virgin America Airlines]