The cringe-worthy debate over larger fliers has generally been limited to passengers, and it looks like that’s where it will remain. Over the summer, it looked as though flight attendants were being brought into the cross-hairs, when Air India fired several for being too fat. Well, the carrier is willing to forgive and forget … as long as the ladies have slimmed down a bit.
According to The Globe and Mail, Air India is “inviting them back,” it says of the plus-sized flight attendants, “because of a shortage of cabin crew.” There’s only one catch: they have to have shed some pounds. The airline doesn’t want those who haven’t taken steps to remedy the causes of their termination.
So, the airline’s message seems to be, “We really need your help, but only if you aren’t too fat. The shortage isn’t that bad.”
Kevin Smith, a director and actor who played roles such as Silent Bob in Clerks is not a happy man. Late for his Virgin America flight out of New York earlier today he arrived at the gate only ten minutes prior to departure and was greeted by a closed door and a stern gate agent – neither of which were going to let him get on the aircraft.
Despite his first class ticket, his calm reasoning and his wife’s medication onboard in a checked bag, the gate agent wouldn’t budge, and the flight left without him. In an online post on his personal site, he now swears that he’ll never fly Virgin America again – or work with any other Virgin product – though in an update, he now says that VX has offered a full refund and additional free tickets.
While we at Gadling Labs surely do sympathize with Mr. Smith, we can’t really blame the airline for their behavior. Passengers are required to be onboard well-prior to departure for security and cabin checks, and opening the boarding door (or moving around checked luggage for that matter) can severely delay a flight and adversely affect hundreds of innocent passengers. That’s why they start boarding 30 minutes prior to departure.
For a rude gate agent, there is no excuse. But flip the situation around and one might understand why the employees were so stern. Virgin America flies dozens of flights out of New York each week, and most of those flights have a few passengers who don’t make it on time. And among those passengers, you can bet that a fair share of them are full of spite. Dealing with five Kevin Smith’s every day five days a week can probably turn even the nicest of people stone cold within a month.
For what it’s worth, we think that Mr. Smith was treated more than fairly, especially considering he was rebooked on the next flight, filed his complaint in the air on Virgin America’s free wireless and received an apology before he even touched the ground – all for something that was really his fault.
Perhaps, however, since his kerfuffle with Southwest earlier this year earned him so much media attention, he’s just trying to stoke the fire and earn it bit more. Don’t be surprised if Kevin Smith cologne hits the shelves in a store near you tomorrow.
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.
%Gallery-109296%
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.
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!
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?