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By Stephani Hawkins | Ascend Editor

A Conversation With … David Cush, President and Chief Executive Officer, Virgin America

Good Again For a relative newcomer, California-based Virgin America has many “firsts.” It was the world’s first airline to implement an on-demand food and drink ordering system on every seatback. It was the first to offer fleet-wide in-flight WiFi. It was the first U.S.-domestic airline to offer passengers an in-flight carbon offset option. It was the first airline to list its carbon footprint according to internationally accepted standards via The Climate Registry. It placed the first commercial order for the new Airbus A320neo, which will offer 15 percent fuel efficiency gains. For an airline that is just a few months shy of reaching its five-year anniversary, its accomplishments are remarkable. And it doesn’t stop there. The airline has also pulled down numerous industry awards, including: Best Domestic Airline, Travel + Leisure’s World’s Best Awards (2008, 2009, 2010 and 2011);

Best Domestic Airline, Condé Nast Traveler’s Readers’ Choice Awards (2008, 2009, 2010 and 2011); Best Business/First Class, Condé Nast Traveler Business Travel Poll (2008, 2009, 2010 and 2011); Best Domestic Airline for Food, Travel + Leisure’s World’s Best Awards, (2009); No. 1 in Class in Zagat’s Global Airlines Survey (2008, 2009 and 2010); Most Eco-Friendly Airline, SmarterTravel Editor’s Choice (2010). Virgin America’s mission is to make flying good again by reinventing domestic air travel. And based on the carrier’s numerous awards, it’s going about it the right way. Its focus is purely on its guests and teammates. As long as they are happy, everything else falls into place. Virgin America’s appeal begins with brand new planes, attractive airfares, topnotch service

and a host of innovative amenities. The carrier’s fleet of Airbus A320s is highly customized with mood-lit cabins; custom-designed, roomy leather seats; and the most modern in-flight entertainment system. The Red™ In-flight Entertainment System gives guests access to more than 30 on-demand movies and 24 channels of live television, a kids’ entertainment section, libraries to video games and music, onboard seat-to-seat chat messaging, ondemand food and beverage ordering, a digital shopping platform, and WiFi at every seat. Combining a stylish design and comfort with innovative technology provides an upscale flight at affordable rates and gives guests control over their overall in-flight experience. For Virgin America, it’s not just about bells and whistles and special perks. It’s

Photos: Virgin America

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about giving the traveling public their money’s worth while ensuring they have an exceptional travel experience. The carrier has a strict value system and extremely high standards that makes it a great airline. But being a great airline isn’t enough. Virgin America also strives to be a good neighbor and takes corporate responsibility seriously. From an environmental standpoint, it incorporates environmentally sustainable practices into its business model. Its fleet is up to 25 percent more fuel and carbon efficient. It uses organic hand soap in aircraft lavatories, and includes locally grown and organic food on its menus. And that just scratches the surface. The carrier operates out of San Francisco International Airport’s Terminal 2, the first LEED ® Gold-certified airport terminal in the United States. The facility uses modern ventilation systems that require 20 percent less energy as well as skylights and clerestories that reduce electricity usage. Numerous other “green” initiatives, such as hydration stations, recyclable dining utensils, preferred parking for hybrid cars and 100 percent EnergyStar-certified computers and office equipment, further contribute to the airline’s sustainability status. From a community perspective, Virgin America supports numerous worthy causes and community organizations, such as Stand Up To Cancer, the California State Parks Foundation and KIPP (the Knowledge Is Power Program). The airline takes it a step farther. Not only does it watch over the environment and fellow beings, it also assists animals. Last year, because of an overpopulation of Chihuahuas in California, Virgin America offered to fly several Chihuahua pups from San Francisco to New York. The City of San Francisco’s Animal Care and Control Agency released the pups to the New York American Society for the Prevention of Cruelty to Animals so they could be adopted into loving homes on the East Coast. As part of the initiative, Virgin America teammates volunteered to escort the pups to ensure proper handling and care before, during and after the flight. The airline has a compelling story to tell from its exceptional treatment of guests and teammates and its idea of what it takes to make flying good to its impact on and responsibility to the communities it serves. In a recent interview with Ascend, Virgin America President and Chief Executive Officer David Cush discusses the airline’s value system, strategy for success and overall philosophy behind this flourishing new airline. 14 ascend

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Question: Virgin America’s mission is to make flying good again. What are some aspects of the current aviation industry that have taken the greatness out of flying? What are the primary things your airline does to support its mission? Answer: I think for the most part, the major carriers have really taken the joy out of flying for the past few decades. Part of it is the economics of the industry, but also management turning inward and away from the guest experience. Many of us remember when flying was actually exciting and fun. The idea behind Virgin America was to get back to that. We wanted to create an outstanding experience by focusing on what travelers actually want. We got to start with a blank sheet of paper and rethink the way things had been done. We knew people didn’t like the loss of control on flights and the lack of connection to the ground. So we invested in an entertainment platform that allows guests to control their own flight. They can decide which TV shows or movies to watch and which videogames to play. They have the ability to order food on demand whenever they like, not just when the cart comes through the aisle. We also built in things like a seat-to-seat chat system so guests can chat with other guests onboard. We invested to be the first airline to offer fleetwide WiFi and power outlets at every seat

so they can stay connected to their lives on the ground. We are also very focused on the overall guest experience. It is not just the new aircraft, entertainment, design and other features — it is our people delivering that product in a guest-centric way. From the people side, we invest a great deal in this area. We have an annual program called Refresh, where we bring everyone in the company in for a two-day program that helps teammates refocus on the guest — and what we do differently at Virgin America. Q: Virgin America follows a strict ethical value system. What are your airline’s core values? Why is it important to incorporate these standards into your business model? A: As a Virgin-branded company and as the only airline headquartered in California, our guests, teammates and investors are passionate not just about creating a great airline but building a great company. That means operating in an environmentally sustainable way as possible for an airline, giving back to our community and supporting our teammates. Our core values are: Being Virgin — Embracing the brand to do things differently in our category; Elevating People — Our teammates, neighbors, guests and community; Creating ‘Wow’ — Surprising and delighting travelers.

Q: When establishing Virgin America, what were some of the lessons you learned from other carriers that helped mold your business model and identify your core values? A: Having spent 22 years at American Airlines, I saw that the new entrant carriers (JetBlue, Virgin, even Spirit) were the ones shaking up the status quo in the airline category and offering products that the modern traveler actually wants. So, I think having really smart, analytical people in the business is key, but also having people who are creative and able to think differently is critical. Being able to adapt the business to the guest and market needs is something that is just crucial, especially in an industry like aviation where you need to move quickly. I would also say that having a highly motivated, engaged workforce across the board is core to our mission and, ultimately, our guest promise. That’s why we spend a lot of time investing in teammate training, recruiting and other programs despite the fact that many travelers are with us for the amenities onboard. The product gets them in the door, but our people keep them. And

having a team that is actually passionate about going above and beyond for the guest and about doing things differently in our business — you just cannot beat that. Q: Your rewards program, Elevate, is unique in that members can redeem points for flights anytime, without blackout periods. What other aspects set your airline apart from other airlines? A: The idea behind Virgin America was really to reinvent something (domestic flying) that, for the most part, had become a dismal experience here in the United States. People didn’t like the loss of control, the lack of connection — to the ground or other guests, and the lack of options similar to what they get in other areas of their lives, like entertainment on demand. This is an airline built from the ground up, designed around the customer — what they like and what they don’t like. So everything from our in-flight entertainment to the design of our onboard cups (pleasing to the eye and more stable) reflect that. Our in-flight entertainment platform is individualized, touch-screen and offers live satellite TV, 35 movies, a 3000-track MP3 library where you can build your own playlist, videogames, interactive

Google maps, a shop platform and a host of other options that people now have in their living rooms. There are several innovative touches — all designed around making the experience better. Before we launched, we knew that travelers did not like that ‘DMV’ fluorescent glare on aircraft. Our in-cabin moodlighting was designed to transition across 12 shades based on outside flying light (settings vary from Seattle Morning to Dusk) to soothe, relax and even gradually awaken travelers on a red eye. Although we have pretty generous leg-room onboard, we also found that a major flying complaint was the seat comfort itself, which is why our seats are custom-designed, deeper and more ergonomically correct — with a higher knee elevation. We also knew that travelers did not like the food trolley carts blocking the aisles and the fact that they had one time to order food onboard — again the loss of control over their experience. We designed a first-of-its-kind food menu to allow guests to order cocktails or meals right from their seatback entertainment screen any time during a flight. Our flight crews pick up the order from an LED screen at the back of the aircraft and deliver it on a tray, which has also been well received with teammates because they can serve faster and keep the aisles clear. We continue to adapt.

Spacious Leather Seats Virgin America’s highly customized Airbus A320 aircraft is lined with roomy leather seats along with numerous other amenities to ensure an enjoyable, comfortable ride for the airline’s guests.

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SFO’s Terminal 2 Sir Richard Branson relaxes at the new sustainable Terminal 2 at San Francisco International Airport. The terminal offers features intended to improve the typical airport experience, such as a stress-free “recompose” lounge post-security, free wireless and plugs throughout, living room-like gate spaces and “moodlighting” that reflects Virgin America’s own signature cabin lighting.

Photos: Shutterstock

For example, guests have wanted an ‘open tab’ function on our Red system so they can swipe a credit card once and order movies, dinner, drinks and other products throughout a flight. We launched that in 2010. Q: You wrote in a letter to your guests that your pledge is to “keep doing what’s working, stop doing what isn’t and continue to come up with new stuff to make guests say, ‘this is how to fly.’” In what ways do you obtain feedback from guests? What are some of the things your airline guests like? And what have you stopped doing or changed based on guest feedback? A: This is extremely important to who we are as a company. We get a tremendous amount of feedback from our frequent flyers via surveys, emails, events and social media. The latter, in particular, has developed into a great channel for guest feedback — it is real time and oftentimes comes to us live from 35,000 feet (via in-flight WiFi) and, in aggregate, can be a great arbiter for what is working and what isn’t. We’ve asked our social audiences to help determine our in-flight

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cocktail bar (we currently have drinks onboard submitted by Facebook fans) and other preferences on the menu, including a push for healthier items, locally brewed beers and only cage-free eggs. Comments from these audiences also helped us make other onboard changes like allowing travelers to listen to a custom soundtrack from our MP3 library rather than listen to the static videogame soundtrack when playing a game. Q: Virgin America touts its friendly service. What motivates teammates to put forth that extra effort to ensure guest satisfaction? What type of special training do you offer your customer-facing employees to ensure they meet your airline’s standards? A: We have recruiting, training and engagement programs that we think are well suited to a start-up, fueling growth in a competitive environment. Every teammate in the company (from pilots to in-flight to airport staff and headquarters folks like me) goes through Refresh, our annual ‘brand bath,’ to improve our guest experience across the airline. This is unique in

the domestic airline industry as far as I know. Refresh includes some unique practices, including conflict resolution training, hospitality training, emotional intelligence training, with breakouts for different work areas. We have a ‘red carpet’ orientation program that introduces new recruits to the larger Virgin brand guest philosophy. Exercises emphasize teamwork and communication — critical in a service business — with unique exercises like a scavenger hunt in downtown San Francisco with one of the challenges being to track down the San Francisco Mayor wherever he is in the city. Our teammates demonstrate real tenacity trying to pry his schedule information from his office or staking out City Hall! Q: Virgin America engages in a number of corporate responsibility initiatives. Why is it important for your airline to be socially and environmentally responsible? A: I think a lot of it is our roots as a California company and our connection to the Virgin brand, which is really committed to the idea that business can be a force for good. Our teammates and guests care about how we do business — as do our investors and founders. We work with

Real Steel Hugh Jackman, star of DreamWorks Pictures Real Steel, and Virgin America in-flight teammates unveil a larger-than-life image of Atom, a World Robot Boxing contender, on the side of a new Virgin America Airbus A320 aircraft named Real Steal.

the Entertainment Industry Foundation’s Stand Up to Cancer nonprofit, California State Parks Foundation and the KIPP, Knowledge is Power Program. We also support multiple programs and partners under the Virgin Unite umbrella such as Galactic Unite, an initiative that aims to inspire students to seek answers to global challenges through science, engineering, math and business entrepreneurship education. Virgin pilots and engineers have served as mentors in the program, which is aimed at youth from kindergarten through grade 12. Q: Your airline has a number of airline partners. Why are partnerships with other airlines critical to the success of Virgin America? What are your thoughts about joining a global alliance? A: One of the reasons we undertook the Sabre Airline Solutions ® transition was our ability to expand our partnerships, including dual earn-and-burn capability for our Virgin airline partners. They are important to expand our sales and network reach and are one of the more frequently requested initiatives from our guests. No comment on global alliances just yet! Q: Last October, your airline implemented technology from Sabre Airline Solutions in the

areas of reservations, marketing and planning, and operations. In what ways will the new technology improve your airline? A: We made the switch to Sabre Airline Solutions quite simply because of our growth. We needed to move to an industry-standard system that would accommodate our expansion as a young airline, allow us to expand our codeshare/interline ability, and give guests and teammates better tools. We had some issues with systems instability in the past because we had outgrown our old system. This investment will allow us to build a better foundation for growth. Q: Why did you select Sabre Airline Solutions as your technology partner of choice? A: Sabre Airline Solutions has always been the industry leader in technology, and the latest iteration of its systems increases that lead. These are the tools we need to run a reliable operation and maximize our revenue-generating potential. Q: How was the implementation process? A: I’ve heard the scope of a reservations system switch likened to a simultaneous heart and brain transplant for an airline, so given that, I think the transition went well overall, with a few

bumps along the way. Every cutover is different for an airline, and although we did not have flight cancellations and our airports continued to run relatively smoothly, we did see quite a few bumps with the Web transition, which our guests suffered. We hope that now that we are on the other side of the transition itself, guests will immediately see the additional capabilities the new system allows. Sabre Airline Solutions’ support throughout was excellent. Q: What benefits have you experienced thus far from the new technology? A: The two quick wins we have seen are a much faster bag-drop process for those who check-in online or through the kiosk and significant revenue improvement through the GDS channels. Q: What role does technology play in the overall success of your airline? A: Technology is an important part of our service delivery, so it is absolutely critical to our growth and success. Q: Where do you see Virgin America in five years? A: I see us in 30 cities and continuing to push the industry envelope in terms of innovating our product for guests. a

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