But quirky startup faces stiff competition with hometown carrier United, which should benefit fliers here. In its battle to carve a niche in the Chicago market, tiny Virgin America wields color like a weapon against its far-larger foes, United and American airlines.
The touches are part whimsy, part calculation that Virgin America's service and creativity will win converts in a world where air travel is a commodity and bland service is the norm.
"We're a very fun, irreverent brand," said Jesse McMillin, Virgin's design director.
But can quirk conquer clout? The edgy upstart must overcome one of the oldest tricks in the airline playbook — a flood of new daily flights unleashed by rival United Airlines — when it launches its service from Chicago to California on May 25.Starting that same day, United will increase its daily departures between its O'Hare International Airport and San Francisco hubs by about 40 percent, bringing in merger partner Continental Airlines to a route previously served only by United and American.
"It's an extremely aggressive scheduling practice, but we knew that going in," said David Cush, Virgin America's president and CEO. "What we're counting on is that the traveling public in Dallas and Chicago are tired of being taken advantage of. … A better product at a better price, that's all we have going for us."
United is aiming its new, near-hourly service at the corporate customers Virgin seeks to attract. It scheduled three Chicago-bound flights for departure from San Francisco at 6 a.m. and 6:57 a.m., for example, so travelers would arrive in time for afternoon meetings.
"We want Chicagoans and San Franciscans to understand clearly that there is no better option between the Bay Area and Midwest than the option offered by United," United spokesman Rahsaan Johnson said. "We intend to compete vigorously, and we intend to continue to win."
In its 3 1/2 years, Virgin America has encountered capacity gluts, offers of double or triple frequent-flier miles and the scorn of critics. The carrier has battled its way into the New York, Boston and Washington markets by taking on the industry's biggest players at their biggest bases, a tactic that Richard Branson pioneered with sibling carrier Virgin Atlantic Airways Ltd.
"We're not afraid to go right into the home camps of these airlines, because the public seems to vote with their feet," Branson told the Tribune. "The bigger we get, the relatively stronger we get as well."
Still, skeptics abound. Virgin America isn't making money and is thinly capitalized, ending 2010 with $30 million in unrestricted cash and $66 million in total liquidity. Despite a 32 percent jump in annual revenue, Virgin America reported a net loss of $68.7 million on revenue of $724 million for 2010.
Critics contend the ease with which startups gain capital has resulted in a hypercompetitive and destructive aviation market in the U.S., where even the strongest players struggle to cover costs. In a highly commoditized industry, "the question has to be asked: What does Virgin really add?" said aviation consultant George Hamlin, president of Virginia-based Hamlin Transportation Consulting.
Plenty, if Virgin's early Chicago sales are any indication. Cush said Virgin sold the equivalent of 46 aircraft worth of tickets on Feb. 17, the day it launched Chicago ticket sales with a Groupon deal. Within a week it had sold out its $99 fares, a quarter of its total summer inventory on the Chicago routes.
"We created a very strong base in Chicago," Cush said. "It is booking up faster than the rest of our network."
Virgin America's marketing pitch is that it provides luxury on a shoestring budget. But that ethos, which starts with Branson, also applies to the way it runs its business and is a trait shared by the 300-odd businesses under the billionaire's Virgin Group umbrella.
"If you're going to create a spaceship company … make sure your spaceship is a sexy beast," Branson said. "Every interior is sexy; everything about it is classy.''
Branson's headline-grabbing antics have ranged from around-the-world balloon adventures to a star-studded midair rendezvous with a Virgin Galactic spaceship this month over San Francisco, and he promises to make a splash next month in Chicago. His appearances always reinforce the Virgin brand while bringing free media exposure that his ventures couldn't afford to purchase.
"He probably frustrates the hell out of everybody who has a hard investment in (airline) product," aviation consultant Robert Mann said. "But the mileage he gets out of publicity and hot air is masterful."
Hot pink headphones peek out of its seat-back pockets, and jewel-tone mood lighting lends trippy sunset hues to its Airbus A320 jets, while transparent purple cabin dividers separate first class from the cheap seats. At Virgin's new Gensler-designed hub in San Francisco, travelers can relax in crimson designer egg chairs.
Source http://www.chicagotribune.com/
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