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Virgin America

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Virgin America
File:Virgin America logo.png
IATA ICAO Call sign
VX VRD REDWOOD
Founded2004
Commenced operations8 August 2007
HubsSan Francisco International Airport
Frequent-flyer programeleVAte
Fleet size21 (+12 orders)
Destinations7
Parent companyVAI Partners LLC
HeadquartersBurlingame, California
Key peopleC. David Cush (CEO)
Donald J. Carty (Chairman)
Bob Dana (CFO)
Websitehttp://www.virginamerica.com

Virgin America is a U.S. based low-cost airline that began service on 8 August 2007. The airline's stated aim is to provide low-fare, high-quality service for "long-haul point-to-point service between major metropolitan cities on the Eastern and West Coast seaboards".[1] San Francisco International Airport is Virgin America's principal base of operations. Virgin America's frequent flyer program is known as eleVAte and, while not officially launched, it is expected to run on a "dollars spent versus miles accrued" model.[2]

Virgin America, though the brainchild of British entrepreneur Richard Branson, is a U.S. airline. By law, no more than 25% of a US airline may be owned by foreign interests and must be under the "actual control" of U.S. citizens;[3] VAI Partners LLC owns 75% of the capital stock and is responsible for appointing two-thirds of the voting members of the board of directors. The remaining 25% of the company is owned by Virgin Group,[4] which also licenses the Virgin brand to the airline. Virgin America is separate from Virgin Atlantic and as such is under no obligation to work with Virgin Atlantic, Virgin Blue, Virgin Nigeria, Virgin Galactic or any other companies that share the Virgin brand name.

History

"Contents May Be Under Pressure" at San Francisco International Airport

In early 2004, Virgin Group announced its intent to start a new, United States-based, low-fare airline it named “Virgin USA”. At the time, Virgin USA expected flights to begin by mid-2005. After considering several key areas, the San Francisco Bay Area was picked to be the location of its flight operations center, and later its corporate headquarters.[5] The airline also changed its name from “Virgin USA” to “Virgin America”. Because it had trouble finding U.S. investors willing to gamble on a new airline, given the state of the already crowded U.S. airline industry, the launch date was pushed back from mid-2005 to early 2006.[6]

Virgin America secured its first amount of funding in late 2005 and submitted the required U.S. Department of Transportation (DOT) certificate application.[7] The approval process was filled with debate from the support and opposition of the new airline. City and state representatives from California and New York led the support for the airline. The biggest opposition came from the Air Line Pilots Association (a national aviation labor union) and U.S. “legacy” airlines led by Houston-based Continental Airlines. The review of Virgin America’s application was prolonged because of this opposition, which claimed Virgin America would not be under U.S. ownership or control.[8] The application was denied by the Department of Transportation on December 27, 2006.[9]

In order to achieve the necessary approval, Virgin America proposed a restructuring of the airline: voting shares would be held by a DOT-approved trust and only two Virgin Group directors would be on the eight-person board. In addition, Virgin America said that it would consider removing Richard Branson from the board, and possibly even dropping the “Virgin” brand entirely.[10] The airline was also prepared to remove CEO Fred Reid “should the DOT find that necessary”.[11]

Virgin America was tentatively cleared to fly by the U.S. DOT on March 20, 2007, but would not be given full permission until it changed its business structure by enacting several reforms as specified by the DOT. These reforms included the replacement of Fred Reid and the limiting of Virgin Group’s influence on the airline.[12] Virgin America fought to keep Fred Reid as CEO,[13] however as part of the DOT’s final approval in May, he was only allowed to stay on nine months after the airline certification, six months as CEO and three months as a consultant.[14]

Virgin America started selling tickets in July 2007. Two years delayed, the airline made its inaugural San Francisco and Los Angeles to New York flights on August 8, 2007. In December 2007, C. David Cush replaced Reid as CEO of the airline.[15]

Virgin America reported a $35 million loss during its first quarter of operations. The airline believed it was unlikely it would be able to turn a profit until later in its life due to the high fixed costs of starting an airline.[16]

Destinations

Virgin America mood lighting

Virgin America plans on flying to major destinations throughout the United States and currently predicts that it will have approximately ten destinations within the first year of service and up to thirty after five years of service.[17]

At its San Francisco hub, Virgin America competes with United Airlines—a legacy carrier that provides substantial services from San Francisco—and with Southwest Airlines and JetBlue Airways—low-cost carriers that serve all three San Francisco Bay Area airports.

Virgin America currently flies to seven destinations throughout the United States. As of May, two destinations have been added to Virgin America's schedule in 2008.

United States

California

Nevada

New York

Virginia

Washington

Fleet

"California Dreaming" at San Francisco International Airport
"Jefferson Airplane" at Los Angeles International Airport

Virgin America's fleet will consist of 34 Airbus A319 and Airbus A320 aircraft (19 purchased, 15 leased).[5] Virgin America received their first Airbus A320 on February 24 2006.

Virgin America is also soliciting the public's help to name their aircraft.[20] On October 11, 2006, the first aircraft was christened Jefferson Airplane after the San Francisco band. Former lead singer Grace Slick christened the plane along with San Francisco Mayor Gavin Newsom and California Governor Arnold Schwarzenegger.

The two inaugural flights on August 8, 2007, were on A320s named Air Colbert, named after comedian Stephen Colbert, and California Dreaming. Other upcoming names include An Airplane Named Desire, Jane (as in Plane Jane) and Unicorn Chaser.[21]

The Virgin America fleet consists of the following aircraft as of February 2008:[22]

Virgin America Fleet
Aircraft Total Passengers
(First/Economy) 		Notes
Airbus A319 8
(9 orders) 		122 (8/114) 2 formerly leased to Skybus Airlines, will be returned in 2008.
Airbus A320 17
(3 orders) 		149 (8/141) 2 leased to TAM Airlines. One leased from GECAS

Cabin

Virgin America First Class

Virgin America offers dual-class service on all flights it operates. Both cabins feature mood lighting, an unusual aspect of domestic airlines, said to create a more pleasant and relaxing environment for the passengers and crew.[23] All seats are equipped with Panasonic Avionics' personal in-flight entertainment (IFE) system running a customized touch-screen environment called Red.

First class seats offer 55 inches of pitch and are 28 inches wide. The seats feature power-ports, adjustable headrests, a massage function, and various recline controls. Passengers seated in first class receive complimentary meals, refreshments, and alcoholic beverages. In first class, Red offers free live satellite television, free movies and a selection of games.

Main Cabin seats offer 32 inches of pitch and are 19.7 inches wide with power-ports and adjustable headrests. In the main cabin, Red offers free live satellite television, pay-per-view movies, a small selection of free games and a larger selection of games for purchase. Red can be used for the purchase of snacks, meals and alcoholic beverages. Flight attendants receive the orders via a tablet PC on the food cart thereby eliminating the traditional food and beverage service.

References

  1. ^ "On the Record: Fred Reid," The San Francisco Chronicle, March 19 2006.
  2. ^ "What is eleVAte?". Retrieved 2007-12-28.
  3. ^ See "Actual Control of U.S. Air Carriers" (Supplemental notice of proposed rulemaking), 71 FR 26425, May 5 2006.
  4. ^ Answer
  5. ^ a b "SFO Lands New Carrier Virgin USA — 1,500 Jobs; Airline Sets Sights On Low-fare Market; Corporate Center To Be Based In N.Y.," The San Francisco Chronicle, June 5 2004. Cite error: The named reference "sfc_20040605" was defined multiple times with different content (see the help page).
  6. ^ "Start Of Virgin America Delayed; Branson's Airline Apparently Needs More Investors," The San Francisco Chronicle, April 9 2005.
  7. ^ "Taking To The Air: Low-fare Startup Virgin America Says It Has The Funding To fly," The San Francisco Chronicle, December 9 2005.
  8. ^ See "Virgin America Inc. - Certificate - Interstate Scheduled Air Transportation", U.S. DOT Docket OST-2005-23307.
  9. ^ "Virgin America gets the no-go," The San Francisco Chronicle, December 28 2006.
  10. ^ "Virgin Group makes concessions to get Virgin America flying," Air Transport World, January 19, 2007.
  11. ^ Aviation Week and Space Technology, January 22, 2007, p. 16.
  12. ^ United States Department of Transportation ruling
  13. ^ "Virgin America fights to keep CEO Reid," Air Transport World, April 12 2007.
  14. ^ Aviation Week and Space Technology, September 17, 2007, p. 24
  15. ^ "Virgin America Appoints C. David Cush as Chief Executive Officer". Yahoo. 2007-11-26. Retrieved 2007-11-26. {{cite news}}: Check date values in: |date= (help)
  16. ^ Raine, George (2007-12-18). "Virgin America $35 million in the Red in First Quarter of Operation". San Francisco Chronicle. Retrieved 2008-01-08. {{cite news}}: Cite has empty unknown parameter: |coauthors= (help)
  17. ^ Virgin America FAQs Accessed November 2, 2007.
  18. ^ Virgin America Route Map
  19. ^ Virgin America Announces New Service To San Diego (Official Press Release: November 7, 2007)
  20. ^ See www.nameourplanes.com
  21. ^ Virgin America Names Their Airplanes (Name Wire: August 09, 2007)
  22. ^ Virgin America Fleet Information - AeroTransport Data Bank
  23. ^ Grossman, David. "Virgin America: A New Airline With a Great Product and a Few Bugs". USA Today. Retrieved 2007-12-28. {{cite news}}: Cite has empty unknown parameter: |coauthors= (help)
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