By Understanding Customer Expectations, Virgin America Has Become America’s Highest Rated Airline in Only 5 Years

Five years ago Virgin America began operating flights in the U.S. As another endeavor of billionaire entrepreneur Richard Branson, Virgin America is privately owned. Similar to most of Branson’s Virgin companies, Virgin America is quite unorthodox. Their main cabin features “mood-lighting” and each seat back has a touch-screen device; all this for a low-cost carrier.

Virgin America "mood-lighting"
Virgin America “mood-lighting”

A report that compared America’s 14 largest carriers found that Virgin America served its’ customers best last year. The criteria was based on on-time arrivals, mishandled bags, consumer complaints and passengers who bought tickets but were turned away because flights were over booked. In the 23 years that Wichita State University in Kansas and the University of Nebraska at Omaha have tracked the performance of airlines this has been the second best year overall. The airline’s best year was 2011.

The U.S. airline industry is continually becoming more competitive. Since 2001, a wave of airline mergers has consolidated the industry. In 2008-2010 Delta Airlines merged with Northwest Airlines and kept their name. 2010-2012 brought the merger of United and Continental, which the two are still working out merger issues as evidenced by their last place rating in the report. Finally, just this year US Airways and American Airlines announced their merger, creating the largest carrier in the world.

Airlines have strategically dealt with the increased competition through many cost cutting maneuvers. Additional fees, such as a checked bag fee, are common among almost all U.S. carriers. Airlines are also cutting down the amount of routes they fly, continually overbooking flights, and fitting more people on airplanes by reducing seat space.

Despite these changes and the displeasure it brings, the airline industry is improving. Led by Virgin America, we are seeing airlines differentiating themselves by understanding their customer better. Similar to our learning activities in class, airlines have learned the importance of understanding customer expectations and managing them better. Virgin America’s mood-lighting appeals to it’s younger customer base, a result of being a low-cost carrier. Even more, the touch screens found in every seat back demonstrate Virgin’s ability to understand the needs of their customer. We live in a constantly connected world, albeit this connectivity does not permeate the many hours we spend in the air. This year Virgin will update their “Red” software that runs on the touch-screens, which will bring the ability to surf the internet while flying.

Virgin is just one example of airlines differentiating themselves by listening to customers. For example, JetBlue understands that customers are no longer willing to give up their flight for cash due to overbooking, a common practice among airlines. Last year, JetBlue involuntarily denied boarding to only .01 people per 1,000 passengers, the best rate in the report.

How else are airlines improving service quality despite handling increased competition? What changes have you noticed that demonstrate airlines are making adjustments to service based on customer feedback?

Huffington Post wrote a good article on the report. You can find it here.

18 thoughts on “By Understanding Customer Expectations, Virgin America Has Become America’s Highest Rated Airline in Only 5 Years

  1. I also find that while airlines are focusing more on their target market they are making the flights a lot more comfortable for the individual. I saw that this story is closely resemblances to the ways that Southwest Airlines have done to also establish and differentiate themselves to become one of the most popular airlines in the country. I would say that Southwest has also differentiated themselves to other airlines by striving for the lower cost of the marketing spectrum. Not to mention, they also provide customers with the customer loyalty points, as other companies do as well. This best exemplifies that Southwest has no gimmicks, just straight to the point, fly with us and you will save money and you will also earn money for your next flight.

  2. I definitely agree to the fact that airlines are trying to accomodate their services to a new generation that is filled with technology and such. However, I think this can also trigger the fact that there are still some people who are used to traveling with the traditional experience, and it can cause companies to lose customers. I know American Airlines, is one of the companies who no longer has actual customer service when you check in your bags or receive your boarding pass. It is all done through computers. The whole purpose of it is to make your travel experience easier and faster, however because there are still people who are used to that “traditional” way, it can trigger the outcome of a good traveling experience. Companies definitely have to know who their target customers are.

  3. I have not experienced Virgin America yet but I do hear great things about their services and their push to satisfy the customers at all times. With the Airline industry it is extremely important to keep listen to your customers and keep them happy because this industry is so people based. Customer loyalty with an airline is key because we have so many options. In my case, I love love love and will always support Southwest Airlines because each experience has been top notch and unforgettable. Booking is a breeze, they follow up with you via email as your trip approaches to offer additional amenities, flights are always on time, the plane crew is so welcoming and funny-which creates an effective atmosphere. I know that whenever I fly with them I’ll have a quality experience. Virgin America is definitely on to something with keeping the needs of their customers at the forefront while being an low cost option, Southwest better watch out.

  4. I also have not personally experienced a flight on Virgin America yet, but also have heard great things about the company’s flight eperience and also how they treat their customers. I found this post very interesting and agree with what the author stated that being in an ever increasing virally connected world, new installments such as the touch screen pads for every seat are a great touch for flight company’s like Virgin America. Additionally, I feel that the “mood-lighting” that Virgin America has installed on their planes is another great touch and makes them differentiate themselves in such a competitive market and draws in their intended target audience.

  5. I think it is essential that airlines continue to look at customers needs and wants in order to keep improving. There are many options for people to choose from when it comes to travel, especially today. If airlines are going to continue to be successful, they have to stay up to date with their amenities while staying at a reasonable rate. I think it would be beneficial for airlines to look at what Virgin America and JetBlue are doing and learn from them. If customers are not getting what they want from a certain airline, they will not be hesitant to move on to the next.

  6. In regards to meeting consumer’s needs and wants this post demonstrates how to “do it right.” Virgin America seems to be very innovative and always looking to satisfy its customers. In the news within the last couple days Fox news announced that some airline carriers, starting with Delta, will make their lavatories even smaller than the already 3ft x 3ft space. Fox news states that the airlines are doing this in order to cut costs and maximize revenue, by allowing these carries to add more seats. With Delta being the test dummy I wonder how successful or unsuccessful they will be. Does it always come down to meeting customer needs to a “T” or is maximizing the profit of the organization the ultimate goal?

    Here is the link from Fox News.

  7. This actually made me think of my worst experience which was through (not surprisingly) United Airlines. First of all, the flight was delayed by three hours, the plane itself was filthy (gum stuck to the seats), I could go on and on about this awful experience. I also read an article in which I found out that “United had the second-highest customer complaint rate in 2010 with 1.64 complaints reported per 100,000 passengers.” Ironically, 2010 was the year when I used United service for the first time. However, I am very excited about the “mood-lightening” that Virgin America is offering. As my peers stated before, Virgin is listening to their customers and are trying to make their flight experience as smooth and comfortable as possible. I will definitely consider Virgin America next time I travel.

    Here is the link for the article I cited.

  8. I have flown Virgin America several times and try to book tickets through the character whenever possible. I think the “mood lighting” creates a much more relaxed atmosphere that diminished the stress of flying. Additionally, the personal monitors make a huge difference in overall flight enjoyment. On most planes, I won’t even watch the in-flight movies because screens are either too far away or are located in awkward locations that make watching a movie more work than it’s worth. Further, the Virgin America monitors allow you to choose what movies you want to watch and when to start them. If the passenger doesn’t feel like watching a movie or show, they also have the option of playing video games or listening to free music. I agree that the airline industry has been forced to listen to their customers due to fierce competition from companies like Virgin America. For example, many airlines are now starting to offer in-flight wireless internet. I believe that this general trend within the industry will continue into the near future.

  9. In the last few months I had a couple interesting airline experiences, so I thought this post was very interesting. I have never flown Virgin America before but I have heard many good things about the company. Service is a very important thing when it comes to traveling and I think a lot of airlines sometimes ignore the importance of service. I just flew Spirit airlines a month ago and I was very disappointed in the service I received. I know that Spirit is a low cost airline meant for cheap flying but I don’t think thats an excuse for ignoring good service. By Virgin America focusing on service and having top of the line technology, I think they will keep doing very well and out match other airlines. I think other airlines should adopt some of the things that Virgin America has done well in the past few years. Service and hospitality are extremely important and I think Virgin is doing a very good job of doing both.

  10. In my experience they have been one of the most expensive options to fly when I have been looking for flights, it is interested that they are classified as a low cost airline. I think it is important to keep in mind the fact that this airlines does not fly to every destination and their customer service results may reflect more positively than if they were to be a major carrier flying to almost every airport in every country, such as United and Delta. I wouldn’t say I am an avid flyer, but I fly 4+ times a year usually. I haven’t seen any changes in terms of customer service or anything to improve the customer experience. Airlines are still charging for checked bags (except Southwest) and have fees for everything pretty much. Some airlines are even going so far as to charge a ticket price based on weight. I think the airlines are in for a rude awakening again.

  11. The irony of this post is that I am doing it 30,000 feet in the air on a Southwest flight. I love Virgin America. I agree – best airline! It is unfortunate that they only have a few direct flights from Chicago. I fly to San Francisco and LA a few times a year for work – and I always fly Virgin. I’ve actually have flown it from San Francisco to Las Vegas as well. Words cannot describe how convenient, pleasant, clean and comfortable it is. And cheap! Everytime I fly them I continually ask when they are going to add more service in and out of Chicago as I spend 100+ on the road for work. My second airline of choice is Southwest, and that brings me back to the irony of this post. I am currently traveling to Boston for work and I am able to do my homework in the air. Also, Southwest is cheap and I like their Rapid Rewards program. I recently flew my 5 best friends down to Nashville to celebrate my birthday using just points that I have acquired through traveling. I am flying JetBlue for my first time this Sunday so I am excited to see how it compares.

  12. Airlines should invest more in developing faster aircraft rather than improving the interiors of their fleet. Yes, Virgin America may be America’s highest airline, but does it fly people faster than other airlines? The answer is no. Pan American World Airways, which used to be the world’s largest airline and the pioneer of international air travel, always invested in larger, faster aircraft. I believe other airlines should follow that strategy.

  13. I think it is definitely important for markets to target consumers that will benefit their company more. Like someone previous wrote that some people are more comfortable with the tradition way. Checking their bags and tickets at the customer service desk more so than a manual computer. Just think about it majority of people who fly are mainly older people who are retired or vacationing and we all know that older people like the traditional way better than doing it on a computer. College students most of the time are driving to their destination to save money! Knowing who and where the money is coming from is something a company should know off back before making dramatic changes if not they will for sure lose customers.

  14. It really is impressive that Airlines are responding to the customer feedback because the seats keep reducing and their was no other alternative that could probably help the passengers feel somewhat compensated. Virgin Airlines are improving their airplanes with technology with the touch screen tv on the back of the seat and also including internet is a major plus. Due to their low cost with all the improvements Virgin Airlines have probably become more attractive than other Airlines which will force the competitors to upgrade and reduce cost.

  15. It is pretty impressive how Virgin Airlines became the number rated airlines in the U.S. with having little experience in the airline business. I flew Virgin last summer and actually had a great experience with them. I remember saying to a friend of mine that also flew with me that the service was a lot better compared to other airlines such as Spirit or American. Now that they have climbed up top to the domestic market, I wonder if they are planning on expanding to service international flights to all continents. It would be really impressive to see if Virgin Airlines can compete with the international airlines.

  16. Virgin is quickly becoming a “people’s favorite.” I hear great things about them from customers. I think in a world of competitiveness a company is well served addressing the needs and wants of the customers. Some things in life are better off done with quality versus quantity (cheaper). After having experienced a horrible flight with American Airlines in the past I am appreciative of companies such as Virgin that focuses on the quality of their customers. I do wonder if they save money by not having the screens in the headrests and and only having headphones upon request what could they do with the savings? After all, a lot of people and young people at that have either a smart phone, an tablet of some sort, laptop, or portable dvd player anyway. These items are made for travel capabilities already. If they increase speeds maybe they can decrease travel time and save money by decreasing passenger consumption as well. These are minor adjustments, but every penny counts.

  17. It is great that a company like virgin who is by no means even close to the size of the main carriers in the U.S. is setting an example and enticing others to serve customers better. BY listening to the customer and providing exceptional service, the opportunity for these airlines to increase their business is realistic. The use of baggage check fees and over booking is annoying in many cases, but reducing the frequency of these instances.

    By continuing to offer the on time arrivals to the customers and the service they desire, it is possible for smaller companies like Virgin to greatly grow in size, and it also offers the opportunity to larger carriers to build and maintain brand loyalty among their current and potentially new customers.

  18. I am glad you chose to speak about Virgin America because I had a great experience flying with them this summer. Prior to that, the only domestic flight that felt like it even remotely aimed to please the customer, was one I took with Jet Blue. In the past few years I have found myself taking an excessive amount of flights, and each experience is worse than the one before. It is definitely one of the industries where financial downturn and its effect are most blatant. Everything seems to be a cost cutting maneuver, and it almost always ends up displeases the customer. Virgin America and Jet Blue realize how much neglect there is to customer satisfaction, and for that reason they are capitalizing by listening. However, I wonder how less profitable this is, and also how sustainable it proves to be in the future.

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