Inside Virgin America’s mid-continent arrival

by Stephen Greenwood on

I don’t think I actually understood the implications of Virgin America’s launch into “fortress-hub” Dallas/Fort Worth until we touched down on the tarmac.

As we taxied to our gate, I could see nothing but a endless row of silver fuselages; all adorned with the iconic blue & red “AA” logo. It felt almost as if we were silently making our way through the front gates of a modern-day Troy.

The only difference, of course, was that this Trojan horse was bright red, equipped with mood lighting, and ready to be received by a cheering crowd of residents, city officials, and the rebel billionaire himself, Sir Richard Branson. To top it off, the tarmac was host to a pen of live bulls, tent with cocktail service, and full fledged Texan barbecue – the type of spectacle I’ve come to know, love, and anticipate when Virgin wants to catch people’s attention.

And it certainly seems as if American has already taken notice. In the weeks leading up to the launch, the legacy carrier lowered fares by 20% and offered double frequent flyer miles aboard Dallas-San Francisco and Dallas-Los Angeles routes.

DFW Public Affairs Manager, David Magaña, also mentioned that American hasn’t been able to stop talking about Virgin’s arrival preceding the event, as it signifies the first of several low-cost carriers that will be entering the Dallas market in 2011. While this loosens American’s 85% share of flights from the hub, it spurs competition and ultimately lower fares for passengers.Virgin America’s first mid-continent destination comes at a good moment in the airline’s young story. They posted their first quarterly net profit (as opposed to operating profit) in Q3 of 2010 and were rated top domestic airline for the third year running in the 2010 Zagat Global Airline Survey. At this year’s Farnborough Air Show, they announced plans to more than double their fleet with a purchase of 40 new Airbus A320’s. Now, with their entrance into Dallas consummated, they’ve shown that they’re ready to make their presence tangible and (thankfully) shake thing up a bit.


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However, to make a significant impact, they’ll have to add more flights. At the moment, Virgin America will offer two daily nonstop flights between DFW and Los Angeles, and two to San Francisco. Although it plans to add a third on each route, it would require significantly more options to directly compete with the hundreds of flights per day that American and American Eagle offer.

“It signifies a second stage for the company. We knew eventually that we’d be going into the middle of the country but now seemed the right time since we’ve blanketed most of the coasts. So this is the second stage of our network development.” Virgin America CEO David Cush said in an interview on the flight.

He also emphasized the company’s dedication with hiring “creative, smart, risk-tolerant people who are willing to go out and push the envelope.” as they grow, and that they’re “not sitting back”, but pursuing the development of a “new in-flight experience” that could be ready as soon as 2012.

The night proceeded to unfold in Dallas’s emerging and surprisingly modern downtown arts district with an intimate performance by activist & music icon, Willie Nelson. Following Nelson’s recent arrest for possession of marijuana, Branson donned a shirt that read “Free Willie” and cheekily quipped that the 77-year old musician looked good after “losing six ounces”.

In partnership with nonprofit foundation Stand Up To Cancer, Virgin transformed the Winspear Opera House into a glowing red hub of its own; filled with Dallas’s elite and hundreds of donors that had gathered friends for Stand Up To Cancer’s cause.

It was an impressive occasion that only an airline leveraging Branson’s magic could pull together, and one that sent a clear signal to the rest of Dallas. Virgin America has entered the mid-continent rodeo, and is ready to take the legacy bulls by their horns.

For more information, check out Virgin America’s introductory fares and schedules right here.

10 U.S. Cities where profanity prevails

by Tom Johansmeyer on

He, we’re all prone to a bit of profanity every now and then – some of us more than others. I’ve had my ass butt handed to me by the Gadling editors over my (finally) occasional use of some foul language, though I’ve taken steps to (as they say) improve myself. Well, I was happy to see when flipping through my RSS feed that I’m not the only person who likes to drop an f-bomb every now and then. In fact, there are entire cities engaging in such behavior, according to a recent article on Business Insider.

So, how am I going to pick my next home? Well, I’ll start by looking at the 10 most obscene cities it the United States. Strangely, New York isn’t on the list, probably because we have a small vocal minority that engages in the sorts of foul phrasing, while the rest of the city tends to be squeaky clean.

So, who’s on the list? These are the 10 cities and towns where you’re most likely to find mouths washed out with soap.1. Ashburn, Virginia
There are only 90,000 people here, but they know how to cuss! The Washington, DC suburb made its first time on the list a big one, coming in at the top spot.

2. Tampa, Florida
Tampa found a way to climb from #8 in 2009 to #2 in 2010, something of an accomplishment, according to a handful of people.

3. Herndon, Virginia
What is it about Virginia? Is there something in the water? A problem with the schools’ vocabulary lessons?

4. Rochester, New York
Who cares?

5. Irvine, California
The fourth-best place to live in the United States has achieved this distinction because you can say whatever the fuck you want.

6. Newark, New Jersey
Duh.

7. Philadelphia, Pennsylvania
Someone must have brought Miss Manners to the largest city in Pennsylvania – it ranked third the past two years, according to Business Insider.

8. Louisville, Kentucky
It ranked #10 last year and #1 the year before. So, there’s a bit of a backslide here, but it hasn’t been too bad.

9. Pittsburgh, Pennsylvania
Like Virginia (and California), Pennsylvania makes the list twice.

10. Los Angeles, California and Las Vegas, Nevada (tie)
Did you really think these two wouldn’t make it?

Curious about how Business Insider came up with the results? Check out the “methodology”:

To find the most obscene cities in America, we plugged the “seven dirty words you can never say on television” — made popular by George Carlin — into Google Trends. We gave each city a score for each of the seven words, assigning more points to cities ranking higher up on each list.

If there’s a better use for the internet, I have yet to see it!

[photo by DanCentury via Flickr]

Brand Wars: The Airline Booking Battle Will Be Televised

by Tom Johansmeyer on

Online travel agencies have had a solid run over the past two years. They picked up some market share as would-be travelers were willing to poke around a little more to score cheap tickets. High rates of unemployment and under-employment and general economic uncertainty, of course, were enough to make consumers value every dollar a little more. This opened an opportunity for online travel agencies to advance in the marketplace, and chip away at the dominance of their suppliers (i.e., the airlines) on the web.

Yet, the market is turning. Next year is expected to be a strong one for the air travel industry relative to 2010, and 2010 was a vast improvement over 2009. For online travel agencies, this provides some benefit as a rising tide, but it’s likely to favor their suppliers, as customers are more likely to go with what they know over putting in some effort to find the largest discounts.

Online travel agencies will have to overcome this tendency by investing smartly and substantially in their own brands. This is what we’re seeing in the latest move by CheapOair, the one of the 10 largest online travel agencies in the sector, in its recent announcement of a marketing mix change, which teases a broader strategic shift given changing market conditions.


A Changing Travel Market
From 2008 to 2010, online travel agencies were able to chip away at the online market share of their suppliers, reducing the suppliers from owning 62 percent of the online business in 2008 to 59 percent in 2010, according to travel industry research firm PhoCusWright. Bargain hunters drove the market, which eroded the importance of brand loyalty.

From 2009 to 2010, PhoCusWright notes a “strong countercyclical performance for the OTA category.” In 2009, sales fell only 1 percent for the sector, compared to 5 percent for the total online leisure/unmanaged business travel market. And, online travel agencies have posted double-digit gains in 2010.

Stronger industry conditions, however, are better for the suppliers, and PhoCusWright observes, “With the rebound continuing, supplier websites will likely regain momentum as the OTA fight to hold on to their share gains.”

In regards to the actual travel experience, ostensibly, the airline’s brand matters most. When a passenger books through an online travel agency, the brand associated with the transaction lasts for a few minutes – or a few hours, depending on the diligence of the buyer’s search. Meanwhile, interaction with the airline’s brand starts during the search for a ticket, persists through the flight and ends sometime after the passenger hops into a town car to get to his ultimate destination. To register in the customer consciousness, online travel agencies need to develop the sort of presences that will keep them top of mind.

This runs counter to the traditional online customer acquisition models associated with the online travel agency business, which involve a combination of search engine optimization, online ads, affiliate programs and social media. These are transaction-oriented tactics, which speak directly to the brand-barrenness of big discounting.

More Than the Transaction
The largest online travel agencies have already moved past transaction myopia: everybody knows the Travelocity gnome, Priceline‘s William Shatner and the likes of “Cooper” from Expedia. For all but the top players, however, investments in mass media brand development (such as television) have generally been eschewed in favor of what’s been known to work. Speaking at Business Insider’s IGNITION conference last week, Buddy Media CEO Michael Lazerow noted that Travelocity grew to $4 billion in revenue through online means before it moved to television to get to the next level.

Yet, for the online travel agency sector to hold its ground – and even grow – in 2011, brand has to matter more, and this means casting a wider media net. This, plus the size of CheapOair relative to its competitors, is what caught my attention about its recent media diversification. The company is launching its first television ad campaign, “Get More for Less,” in an aggressive move to get out in front of the imminent online travel market shift.

The move to television is an aggressive one, and it comes a bit ahead of “schedule” for CheapOair, if you use the Travelocity number as a reference point. Expedia pulled in close to $3 billion in revenue last year, for example, and Priceline at $2.3 billion. Travelong/CheapOair generated $825 million in revenue in 2009 and has grown at a year-over-year rate of 45 percent this year, resulting in forecasted 2010 revenues of $1.2 billion.

The company’s CEO, Sam Jain, says, “TV is a new strategy for CheapOair and as we head into our 6th year we believe this is the right time to expand our marketing efforts. TV is a natural evolution from our current digital marketing and will help build awareness among a larger audience and introduce more people to the brand.” The countercyclical tendencies of the online travel agency market relative to travel as a whole reinforce this point.

Pointing to the potential for a virtuous cycle, CheapOair’s Sr. Vice President of Strategic Partnerships, Bill Miller, adds, “This new TV campaign should draw in more customers for us which in turn will bring more value to our supplier partners. Our suppliers — airlines, hotels, car rentals —- want valuable and efficient distribution partners. I believe we are all that and more and this TV campaign is just another example of how we can extend our marketing reach on the behalf of our supplier partners.”

Fashion versus Reality
It’s been fashionable among the digerati to claim the death of other forms of media, and I’m as guilty as the rest. But, the reality is that SEO and online ads (a la Google’s pay-per-click model) are becoming increasingly crowded and competitive. Since they are focused on the transaction rather than the brand, they don’t provide for a relationship with the customer that results in a gradual reduction in cost per revenue over time. It’s strictly “pay by the drink,” and that can get pricey.

With the travel market starting to tip in favor of the travel suppliers over the online travel agencies, the costs associated with traditional online marketing will become even higher, as brand brings customers back to the suppliers and online travel agencies chase a shrinking share of bargain hunters. For online travel agencies to compete effectively, they have to make their own investments in branding – a commitment that lacks the predictability of other forms of marketing.

Strangely, television may become the key to winning on the web in the travel industry in 2011. A better market translates to the amplification of the importance of brand, and commercials are still a critical aspect of this in the consumer world.

A battle of the brands is about to break out. The good news is that it’s for your benefit … and you’ll get to watch it on TV!

[photo by Do u remember via Flickr]

Federal Court reverses ban on US Airways New Mexico liquor license

by Scott Carmichael on

This week, a federal appeals court overturned a ban the had been preventing US Airways from serving alcohol on flights to and from the state of New Mexico. The ban was put in place back in 2006 after an incident involving a drunk passenger.

The passenger, Dana Papst had been served two drinks on his US Airways Albuquerque flight, despite already being intoxicated. On his drive back home from the airport, he smashed into oncoming traffic, killing himself and five others.

For years, the airline had been in court trying to get the ban overturned, but it took a federal judge to rule in their favor.

US Airways had argued that airline alcohol laws are regulated by the U.S. Department of Transportation, and not local states. Part of the states decision to ban the airline from serving alcohol was based on a history of citation for over-serving passengers.

What do you think? If an airline has a history of over-serving, should states be allowed to revoke their liquor license?

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[Photo credit: AP]

Go heliskiing in Nevada

by Kraig Becker on

For many skiers and snowboarders, a heliskiing trip is at the top of their list of “must do” adventures. By hopping a flight on a helicopter, they gain access to pristine backcountry snow and slopes of untouched powder. Better yet, these locations are usually miles away from crowded lift lines and busy lodges, allowing skiers to enjoy a mountain all to themselves.

Heliskiing has become a popular activity around the globe, with numerous options in the U.S., Canada, Iceland, New Zealand, Europe and beyond. But one place you probably wouldn’t expect to find a heliskiing operation is in Nevada. But way up in the northeast corner of the state are the Ruby Mountains, which are often overlooked as a destination for winter fun.

For 34 years Ruby Mountain Heli-Experience has been offering customers access to an amazing winter wonderland that can only be reached by helicopter. They have over 200,000 acres of wilderness at their disposal, which allows them to meet the needs of skiers or snowboarders of any skill level. The Ruby Mountain setting has everything from gentle, wide bowls to steep, fast drops for the real thrill seekers.

At the end of the day, after a spectacular experience in the snow, you’ll return to the lodge where yet another surprise awaits visitors. Ruby Mountain delivers some fantastic gourmet cuisine for their guests, which simply rounds out an already fantastic experience.

Ruby Mountain Heli-Experience is one of the most accessible and affordable heli-skiing option in the lower-48 states and an unforgettable experience for adventure travelers. With the winter season just about to begin, its time to start planning your next snow adventure.

[Photo credit: Ruby Mountain Heli-Experience]


Ruby Mountain Heli Experience Highlights 2010 from Joseph Royer on Vimeo.