Making money at 35,000 feet
Today is the first time I have flown Virgin America from Boston to San Francisco. In fact, I am flying right now as I post this. Virgin offers Wifi on their flight for $12.95. It's not cheap, but it's worth it if you really want to surf the web for the 5+ hours on the plane. And, it's good incremental revenue for the airlines.
With the airlines and so many other industries, struggling now for revenue, Virgin has the right model that others should follow. Instead of racing to the bottom by cutting prices and services, they offer a nice experience at a reasonable price. My ticket cost $380 round trip (booked pretty far in advance). That's a good value for a cross-country flight.
And, the plane's entertainment system is pretty nice -- TV, music, movies, seat-to-seat chat, and food ordering whenever you want. And, I had to test the wifi service. It's a little slow (you won't want to do any big downloads). But, it works pretty well. For web surfing and email, it's great.
Virgin has a mix of free services and things you have to pay for. But, when they deliver it well, I am sure that they sell quite a bit. As my traveling companion pointed out, they need to figure out a way to sell things to people while they are waiting to board the plane. But, whatever they sell incrementally is probably pretty high margin. That should help their profitability. And, the plane was totally full, which is always good for the bottom line.
I'm glad to see some companies try to make money by deliverying more at a good value rather than cutting everything and somehow hoping they can make it up in volume. There is a place for the cheapest option, but I bet that a lot of people will pay more for a good experience.
Virgin is my new favorite way to go across the country.