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.

Innovation is Phenomenal! Bicycle of the 21st Century

Do you remember your first bicycle?
Part of growing up, one of the most exciting things that many of us have experienced was learning how to ride a bike. Most of us can recall the first bicycle they had, maybe most of you still have it.

The first bicycle was invented in Germany in 1816. The bicycle had no chain and the wheels were huge. It only had one gear, but that was not the point. It was an innovation that many of us love to use today. <—
History of the first bicycle

One of the first things when buying a bike is asking how many gears will it have so I could see how hard do I have to paddle up the hill and how fast can I go down the hill. This has finally been answered by Novara Gotham.

Recently in class we have been discussing product life cycle. Now for years each bicycle would have gears or no gears. Based on my experience from working at a bike shop, many customers want the bike to have as much as gears as possible. This way they can go faster and easier up the hills. Will this innovation change the future production of bicycles?

How can this new innovation be applied to the product life cycle?

  • -Research
  • -Product Development
  • -Process modification and enhancement
  • -Supplier development

First bike have been invented over 200 years ago, technically this is a new innovation within an old one. In addition, this a brand new addition of a bicycle brand to the family of bikes. Do you think Trek or Felt might want to buy this concept to increase their innovation ideas?

This new product opportunity must have went through an extensive product development.

  1. Ideas
  2. Ability
  3. Customer 
  4. Requirements
  5. Functional
  6. Specifications
  7. Product 
  8. Specifications
  9. Design 
  10. Review
  11. Test 
  12. Market
  13. Introduction
  14. Evaluation

My question is how does one think of an innovation like this from the beginning? Is it mostly the customers’ requests and the first one out there to figure it out is the one to put it together. Not many people in the business world have the opportunity to have their innovative idea make it to the market. It takes a lot of knowledge and networks to establish themselves.

Many innovative individuals might have the ability to design a concept but how do you manufacture it? The QFD plays an essential role in this project. It was a team of innovators that worked together in order to have a solid plan before proposing it to anyone.

In my opinion, one of the first people to purchase this bike will be employees of huge cycling companies. That way they can take it apart and figure out the engineering portion of this innovation.

Do you think that reverse engineering should be illegal? Its almost as if someone was stealing a patent from you.