• by Joan Voight , August 21, 2008

Virgin rocks aviation's boat

In the midst of airlines shuttering, merging or going bankrupt and passengers' satisfaction steadily declining, Virgin America decided to throw its hands in the air and party like it just don't care. While stodgy legacy airlines limp along, Virgin, with its stylish new energy-efficient planes, techie in-flight features and Richard Branson's halo, is a whole other story. When the airline launched its West Coast and cross-country flights in mid-August 2007, about 2,000 people gathered at a hip San Francisco nightclub to dance, drink and listen to Branson - who owns 25 percent of Virgin America - talk about "the beginning of the battle for change in the American sky."

His hyperbole could be more than hot air. On Virgin America flights, the lighting is designed to make passengers feel like they're in a nightclub. In the air they can send messages or play video games with fellow passengers and compile music playlists that the airline remembers for their next flight, all for free. They can also order a $12 fruit and cheese plate and other edibles and beverages from a touch screen whenever they want them. They can plug their gizmos into electrical outlets by their seats, and this fall, they'll be able to buy Wi-Fi. All this for airfares competitive with discount carriers.


Funk Soul Brother

And, of course, there are the parties. Like Snoop in Soul Plane, Branson is taking the bash sky-high. New routes were launched with live music and free-flowing drinks in hotels, airports and sometimes in flight. On a regular-fare November 2007 flight, Victoria's Secret models held a pajama party and fashion show for passengers. Selected Wednesday evening flights between San Francisco, Los Angeles, New York City and Las Vegas include free in-flight cocktails, with more free drinks and discounted room rates at trendy hotels nearby.

"The idea is to make you feel more cool and more connected after the flight than when you left," says Courtney Buechert, president of Eleven, the airline's marketing agency.

"It's so ironic that this new airline is adding service layers while category leaders like American and United are stripping them away," says Drew Neisser, CEO of interactive marketing agency Renegade. "Air travel has become a truly miserable experience, so most regular flyers like me [are bound to] be intrigued by Virgin's promised amenities."

The airline is working with a modest $10 million to $20 million marketing budget, "meaning TV is out. The footprint of our services is not national enough, and TV is too expensive," says Porter Gale, vice president of marketing for Virgin America. Instead, the company goes for outdoor, magazines, newspapers, Web banners and viral video. Partnerships with brands such as Victoria's Secret, Method and Digg help the marketing dollars stretch further.

To woo its audience of tech-savvy, creative consumers, the company's marketing strategy is to demonstrate its progressive, freewheeling attitude, rather than simply tell people how cool it is, Gale says. For instance, Virgin's in-house group created a cheeky, animated flight-safety video that satisfied federal regulations while providing a bit of entertainment, then posted it on YouTube to give the outside world a sampling of Virgin's moxie.


Ready for Takeoff

"With our advertising - whether it's an ad or a physical place - we want to create the experience of flying with us," Gale says. "We are driving a trial of the product with visual experiences."

To that end, about a dozen bus shelters were erected in March 2008 in San Francisco, the airline's hub city, to imitate the interior of Virgin planes. They have the planes' signature pink and blue interior lighting, and posters inside the shelters show the planes' walls and seats. Ads in lifestyle magazines depict flashy models and real-life musicians using the planes' amenities.

Web banners and newspaper ads take a different tack: They focus on destinations and price. In a new-media twist, the newspaper ads are modeled after the Web banners. Both media use the same shape, messaging and frequency of content changes, based on locale and time of day (evening papers run different content from morning papers, for instance), Buechert says. Why bother with newspapers with a Net-centric target audience? "Newspapers can give us more reach within a short time, and people see the newspaper ads when they are away from their computer, in a different frame of mind," Buechert explains. In all the ads, "we are talking about product features, but the look, feel and voice of the ads give the brand message," he says.

Since the launch, ad spending had been about half online, and that percentage went up in June because the online work is so effective, Gale says. "We can see a direct correlation between how much we spend on online and how many plane tickets we sell and how many people sign up for our ... loyalty program," eleVAte.

By the end of May, 400,000 people had joined eleVAte, and only half had ever flown on the airline. Some live outside the airline's coverage area, and some are even outside the country; the program lets those members keep up with the airline's activities and imagine their own Virgin America flight.

By June, the airline had nearly 100 percent occupancy in its first-class seats and about 85 percent occupancy in coach. Marketing strategist Jim Gilmore, co-author of Authenticity and The Experience Economy, says using events as marketing tools reinforces Virgin's message that it is "an experience, not just a product or service." The approach serves to reinforce the ads and give customers, particularly bloggers, "something they can talk about to each other," he says. The challenge for Virgin is to keep refreshing its offerings, including new versions of the safety video, new events and fresh content on the in-flight entertainment system, he says. "That way, customers can look forward to future flights where they will have new experiences."

Eleven's Buechert says the bigger challenge is convincing people that Virgin America flights are not expensive. "It surprised us how fast customers accepted that Virgin was offering unique amenities" in a time of cutbacks, he says. "The presumption is that the flights are not competitively priced." In June, a coach ticket from San Francisco to NYC was $159-$234, depending on the day of the week. "We'll be hitting the value message harder," Buechert adds.

But given the harsh realities of the U.S. airline industry - huge fuel costs, disenchanted consumers and a limping economy - ads about parties, pretty lights and cheap fares aren't going to be enough to make Virgin's U.S. airline succeed.

As Renegade's Neisser puts it, "If they deliver on the basics of getting from place to place on time with luggage, then free drinks and fashion shows will be whipped cream on a lovely sundae."

Gale thinks it is possible to do both: Provide efficient transportation and an entertaining, marketing-friendly experience. "We are small and we are nimble," she says, and capable of feats that larger, more entrenched rivals can't easily pull off. "We can orchestrate special events for our customers without disrupting a large infrastructure. It is what will set us apart."


Really Friendly Skies

To keep its viral marketing buzzing, Virgin America is always on the lookout for partnerships and innovative events. Cobranded parties and giveaways drum up press coverage, give regular customers an insider status and provide the social media set with fresh content to share. Online buzz about the airline at least doubles after such events, Gale says.

Take the Victoria's Secret in-flight pajama party. On that cross-country flight last November, supermodels Selita Ebanks and Miranda Kerr put on a fashion show in the aisle of a plane named "Runway Angel," after the Victoria's Secret Angels.

Passengers received free makeovers and free Victoria's Secret branded pajamas and cosmetics. Members of eleVAte were invited to book the flight, and passengers who already had reservations were notified of the special activities in advance, in case they wanted to switch to a more traditional trip. (There were few takers.) All passengers were encouraged to don their PJs for the flight.

In another example, when Virgin launched service between Los Angeles and Seattle on April 8, the airline hired several local bands. The Donnas played at the Los Angeles International Airport, and more groups performed on the flight and at an invitation-only party at a Seattle nightclub afterward. In an echo of the experience, a magazine ad featured the lead singer from a participating band, the Bamboo Shoots, plugging his guitar into an outlet on the plane.

Whether or not Virgin America's party vibe translates into a superior flight experience, it's an attention-getting proposition. Road-weary frequent-fliers are certainly in the mood for some TLC.