Seat Review - Pacific Blue International Economy Class (Virgin Australia)

Virgin Australia (nee Blue) may have rebranded and retargeted itself in a flurry of fancy press events and well crafted media releases, but when it comes to the product there is nothing fancy or well crafted about Virgin Australia’s Pacific Blue international economy class. It is a flight that gets you where you are going with a smile but the bare minimum of extras. It is low cost seat, nothing more. The BOOT rating for Virgin Australia / Blue International Economy is 1.5 stars out of 6 or "Bad Seat". Here is the detailed (other reviews and scoring system for airline seat reviews here)
Getting on board	Score 0
I am Velocity Gold (Virgin’s frequent flyer program), Qantas Gold, United Gold and Singapore Airlines Gold. But none of that matters or means anything when flying Pac Blue. There is no lounge access for anyone in any status or any class no matter what. I put a post on Australian frequent flyer hoping that someone knew a trick or twist…but had nothing but crickets in response. On the Virgin website under the lounge section they mention how for every other international flight they do on V Australia, Virgin Atlantic, Etihad etc. Velocity Gold is enough to get lounge access. If flying from NZ there was mention of some lounge with names I'd never heard of. But in ex-Sydney on Pac Blue nothing. This is a significant weakness in this product. Lounge access is a critical value to a top tier flyer. The absence of it is felt and sets the tone for this product. I did get access to a priority check in queue which saved about half an hour on the land side (but then without lounge access what am I actually going to do with that extra time airside). Pac Blue is pure low cost carrier in approach but does have assigned seats. However, they have not initiated online check-in for international departures. By phone they will not set aside seats for groups/families sitting together. I asked over the phone “can you guarantee that all four of us will be seated together.” The useless reply was “we cant guarantee but you will probably be able to sit together.” This means we had to be at the airport 2 hours ahead of time to guarantee being together which mean 1.5 hours in the airport with no lounge access. Pure LCC. Note - DJ have announced a tie up with Singapore Airlines which may deliver lounge access but press releases of future luxury do not remove the sting of having to pay $5 for a luke-warm coffee on a hard bench in an overpriced airport.
The Seat	Score 0
It is a economy seat on a low cost carrier so you expect it to be small and narrow. It meets that expectation. To be fair, the seat is a reasonable size for a economy class seat. The tray table is a fair size and adjustable. The arm rests lift, allowing children to easily sleep on the laps of parents. The seats are leather and pleasant on the eye. All acceptable stuff. What is not acceptable is how dirty the area is in and around the seats. Carpets stained with what I hope is food. Seats covered in what I hope is dust and seat back pouches filled with tissues, dirt, wrappings and what I hope is not human waste. Filthy and unacceptable. If is fine for low cost seat to mean small but it is unacceptable for it to mean unhygienic. What is also not acceptable is the slant. For some reason the head rest slants forward not back. It is understandable that the LCC economy class seat does not recline much but it is unacceptable that the headrest pushes forward - not lean backward. By pushing forward it makes sleeping impossible. If it could lean back just a few inches it would go from impossible to bearable.
Entertainment	Score 0
Virgin’s live2air service combines a live feed from Australian cable television companies Foxtel and Austar. Means 24 cable channels covering sport, comedy, drama and kids programs. There is also a movie channel with 3 movies running on a loop (set start times). Cost is $9.90. That is fair and reasonable for a low cost carrier but I am not sure why they chose live TV vs on demand TV. For live TV to be attractive there has to be something on at the time you are on. Taking a day-time flight means the TV channels are full of...well…day time television. Hardly appealing stuff. The decision to use live TV goes from strange to ridiculous on the return trip starting in international waters. Clearly Virgin or Foxtel have not secured rights to broadcasts starting in non-Australian waters. As a result return trips to Australia involve a number of hours of "service not available" until Australian territorial waters appear. Virgin should replace this as soon as possible with an on demand service
Food	Score 0.5
There is lots of food on board provided you are happy to pay. Again -completely acceptable on a low cost carrier. But it is completely unacceptable that there is no free water option. The only water available is $3 for 330ml. It is well accepted that you should drink a lot of water on planes. The official recommendation is to drink two litres per day. For a flight you should increase this 50%. Means for each hour of flying time you need to drink between 125-200ml of water. To do this on DJ long haul adds a minimum $12-13 to the price of the price of each ticket. It should be a regulatory requirement that airlines provide water. Regulations aside Virgin must immediately change this position and make water available for free. Another peculiarity of the food is the timing of the hot food service. My flight was a day flight lasting 7 hours. The first cart came passed a few moments after take off (ie in the morning Sydney time). It was only made clear to me later (maybe I missed it) that this was the only time hot food would be served. This does not work for me (and probably for most people) to get on a plane first thing and have to eat the only hot meal. As Sydney dinner time approached all that was available was day old wraps and cheese and crackers That all said, the quality of the food on offer is better than low cost carriers I have flown in Europe through the sourcing of snacks from higher quality providers.
Service	Score 1.0
The staff were fantastic. They out-shined all other elements of the product. The staff were pleasant and lively despite a flight at horror hours and children running everywhere. A tribute to air crew. The plane was full of children running everywhere yet the staff dealt with all with a smile, a sense of encouragement and filled with great humour
BOOT Factor	Score 0
The flight is factor-less. There is not a bell or a whistle or a twist.
Final Score	1.5

Virgin Blue starts brand review - why not rebrand Ansett?

News out that Virgin Blue CEO John Borghetti has brought on long term collaborator Hans Hulsbosch to help with a brand review for Virgin Blue.

Hulsbosch previously helped Qantas with their brand review though I think the minimal changes of lengthening the Roo tail and slanting the acronym is more of a tweak than a review.

From press reports it looks like nothing is off the table including scrapping the use of the world "Virgin". Given the current DJ product and announced plans for it, I recommend DJ drop the Virgin brand, write a cheque to administrators KordaMentha and re-brand the whole business Ansett.

I am being facetious of course but there is some rational thinking behind this. Below is a table comparing the Ansett of 2001 with the Virgin Blue product of the same year and of 2010

My point is that as Virgin Blue chases more and more of the Qantas business (aiming to increase corporate share from 5% to 20%) it is getting closer and closer to the Ansett business model and further and further away for what made it a success. From the table you can see that the edgy brand and free food are the last pieces differentiating DJ from Ansett. They need to be very careful in this process that DJ do not end up catching just enough of Qantas share to lose what built their brand and suffer the same fate as Ansett.

PS: for those that don't know Ansett was the long term Star Alliance full service competitor of Qantas that went bust in 2001 after (but not caused by) Sept 11. Virgin Blue launched in August 2000

Liz Savage (EGM Commercial) of Virgin Blue on the difference between Euro and AU Air markets

For part of today I was at the Australia Pacific Aviation Outlook Summit 2010. Highlight speaker of the seasons I listened to was Liz Savage the (relatively) new Chief Commercial Officer (now Executive General Manager Commercial) of Virgin Blue. Ninemsn is carrying the traditional news part of her speech around DJ's determination to carve a space in between the hard core low cost of Tiger yet steal premium customer share from Qantas. She announced a desire to double DJ's share of the corporate sector from 10% to 20%.

Savage's background (linkedin profile here) was with easyjet and Monarch. She took some time in her speech to share three key differences between the Low Cost/New World Carrier market in Europe and Australia. They are:

1. Number of competitors and low cost carriers: Compared to her time in Europe, Savage was intrigued to discover how concentrated market share was in Australia. This lack of competition was particularly acute for Savage when it came to LCCs. Europe is filled with point to point low cost carriers. Savage mentioned that her previous employer - Monarch - was a medium sized carrier (some 30 aircraft and 100 routes) but was also a profitable airline and of size enough to compete. In Australia, no matter how you measure the market, there a very limited number of competitors - on an absolute scale and relative to Europe;
   
2. Number of secondary airports: Savage reminded us that the success of Ryanair was in no small part due to the use of secondary airports. In Australia there are virtually no secondary airports, forcing low cost and new world carriers to sit with the same airport cost base as the full service/premium carrier(s); and
   
3. Need for an international network: European LCCs can survive and prosper on the back of point to point short haul. But given Australia's distance and market, a carrier must says Savage have an international network (either directly or a virtual one via alliances).

Great to get a new view on the Australian market. Any other major differences between the Euro and Australian air markets?

Jetstar on Virgin Blue - Perils of in-flight TV

In flight TV is all the rage with Low Cost Carriers because it opens up a revenue stream without the complexity of managing a video on demand system. Unfortunately streaming live TV comes with a lack of editorial control. Here is a photo of me watching a Jetstar TV advertisement while sitting in a Virgin Blue seat somewhere between Sydney and Melbourne. That is 192 people looking at your competitor's brand while consuming your product.

Virgin Blue - Premium economy has not been enough to save the share price

Bad day in the office in Fortitude Valley for Australia's number two carrier - Virgin Blue. Despite efforts to reinvent the brand with premium economy, lounges and more the share price for DJ (their airline code) is at its lowest level ever at 87 cents on the back of dropping profits (SMH story here). To put this in perspective, DJ floated at $2.25 in December 2003 to a valuation of A$2.3billion. In early 07 it reached a high near the $2.80 mark.

If the comments from the DJ management are right, this is not all their fault. Rather (they argue) the sector (ie domestic travel) is softening on the back of global and local economic concerns. Either way am sure it was not pleasant day in Queensland.

Death of an acronymn: Virgin Blue launches Premium Economy

Already Virgin-Blue has stopped calling themselves a low cost carrier, preferring the term New World Carrier. Now we see the last nail in the coffin of their status as an LCC - the launch of premium economy on domestic routes. You can now add this to other hallmarks of a traditional carrier - business lounges, a frequent flier program (Velocity), fully flexible fares, online check-in and more.

Not announced but surely coming soon are tiers of frequent fliers, a wine club and leather embossed passport holders. Why would DJ do this you ask? Well profits for the six months to Dec 07 are down 10% on the previous year and the stock is down 37% (SMH article). DJ has reached saturation almost it efforts to capture low spending domestic travellers. The growth area they need to hit is the corporates - who do not want to face hours of domestic travel (ie Sydney to Perth) in cramped seats.

The other big product question for them is where Virgin Blue will target the front of the plane product for "V Australia". This the airline to be launched for Pacific route (AU to West Coast US). Will they do a premium economy style seat for a full near flat business class to try and take on Qantas. My guess - given that they have only asked for 10 flights per week - is that they will chicken out and leave the near flat to QF (see my earlier rant on the Open Skies agreement).

Here are the specs on the new product.

UPDATE - 22 Feb DJ CEO Brett Godfrey is quoted (in Travel Daily) as saying that Virgin Blues fastest growing segment is corporate travel and that he can see premium economy becoming a flagship product. Further confirmation that with 31% domestic market share DJ cannot see any more growth in the market from an aggressive Ryanair style low cost approach. I presume this makes Tiger Air a little happier (now thirteen destinations in Australia).

Qantas has power problems, Virgin-Blue cashes in

Contextual advertising on news sites often results in great "coincidences". Check out this one from today's online version of the Sydney Morning Herald. A Qantas near disaster story with a Virgin-Blue ad.


Thanks to a loyal reader for the tip. Here is the full story if you want to read the article (unlikely Virgin ad is still there).

If you would like another SMH example have a look at the end of this post on the Travel.com.au acquisition. Shows an Expedia AU ad on a Travel.com.au filing about being sold to Wotif.com

Jetstar promotion - if you do this, this, this, that and pay more then we'll do something for you

Jetstar is Australia's third domestic carrier - the low cost off shoot of Qantas. They were launched a few years back by Qantas to fight the increasing market share gains of Virgin Blue. While Virgin Blue have broken a number of the low cost carrier rules with lounges, flexible tickets, fixed seating and more, Jetstar has proven itself to be an old fashion low cost carrier with no arranged seating and flying to secondary airports (who even knew Australia had secondary airports). Virgin Blue have been doing as much to fight Qantas at the top of the market with service as they have to fight Jetstar at the bottom with prince. It has found DJ (Virgin Blue two letter code) stuck in the middle.

To continue the squeeze and prove their pedigree in the price competition, Jetstar have launched a new fare guarantee campaign. They guarantee to double the difference if you find a lower fare. Great idea for a campaign - right? Should generate good press and help build up the price credibility story- right? It would, except in a classic low cost carrier move (and Qantas move for that matter) the terms and conditions are so rigorous and ridiculous that it is more likely to annoy customers, than win them over.

This is what you have to do to claim your "double the difference"

1. Find the lower fare
2. Call the Jetstar call centre - making sure there is availability in the competitors fare and ONLY ONE CLASS of Jetstar fare
3. Departure of the lower fare must be within one hour of departure of the compared Jetstar fare
4. Wait for Jetstar to verify
5. BOOK THE MORE EXPENSIVE FARE WITH JETSTAR
   
6. Then A VOUCHER voucher for a subsequent purchase will be sent for double the difference VALID FOR ONLY SIX MONTHS.
   

Who the hell in the marketing department thought this would be a good deal for customers. You have jump through a series of hoops to prove that Jetstar is more expensive, then you actually have to buy a more expensive ticket to get vouchers that have a very limited time of validity. Jetstar can avoid liability by simply closing out a class of fare. Price guarantees are simple - find a more expensive fare and we'll match it or give you x% off. Easy. When you make marketing promises that are complicated and painful for consumers they will inevitably have the opposite effect by generating bad experiences and word of mouth.

Easy does it with online packaging and cross sell

easyJet announced today the launch of easyJet Holidays with the hotel section being powered by First Choice's Hotelopia. Here is the Travelmole article and the confirmation of Hotelopia's involvement.

An airline doing a deal with a hotel provider is nothing new. In fact we have seen great twists recently with Singapore airlines finally agreeing that they needed outside help with hotels by signing with GTA's Octopustravel and Ryanair signing up with the "undead" white label arm of Expedia (called World Wide Travel Exchange or WWTE). The difference here is the the quality of the integration.

I spoke recently in this post on what airlines need to do to stay on top in online travel. My number one suggestion was to focus on cross sell. Crucially to not treat hotel partners as a simple white label relationships or an ad sales deal where all the airline focused on was the size of the commission cheque at the expense of functionality, choice, price and all the other things that are important in building customer relationships. Pure white-label deals leave open a functionality and convenience gap that online agents (OTAs) with decent screen scraping/API connections and packaging technology can fill. Airlines that did not participate in the GDS had a presume insurmountable advantage over OTAs as the OTAs had no access to inventory. Now that aggregation technologies have found ways around the GDS non-participation, this advantage is disappearing. Now it is smart OTAs that can have the advantage as they can package and cross sell where airlines with dull white-label arrangements cannot.

The easyJet integration is a great step in maintaining the advantage over OTAs. I searched a random flight from Luton to Edinburgh (June 30 out, 7 Aug back) on both the easyjet.com site and the easyjetholiday site. Through the cross sell on the "regular" site after I searched for flights and the full holiday functionality of holiday site I received the same offers at the same prices. The process was seamless and matched the experience of booking through an Expedia or Orbitz (though I did not complete the booking so have to assume that all goes well once credit cards are entered).

This focus on product, experience and price is in contrast to Ryanair who have no cross sell and have done little to alter the look of their WWTE product other than header, footer and colours.

Congrats to easyJet on this launch.

Am not predicting the death of Ryanair.com, Qantas.com, Virgin-blue.com and other big traffic airlines sites that have not embraced product focused cross sell but will predict that for so long as these airlines take a casual attitude to complementary products they will be providing market opportunities for the online agents they hate so much.

Low cost carriers and the world of aviation: Too many acronyms - brain hurts

Originally it was simple. There were full service carriers and low cost carriers (LCCs). Full service gave you food, a pillow and a nice movie. LCCs promised to eventually take you where you wanted to go and to not punch you in the head on the way there.

Then the word became confusing again. LCCs in some markets - like Virgin Blue in my own sweet home Bondi - said that they did not want to be called Low Cost Carriers any more. Now they wanted to be called - New World Carriers. Lots of marketing gumpf thrown around as to what this means but common themes are - really cheap but we still want a frequent flyer program, business lounge and pricing structure that allows for cancellations. In other words- a normal carrier without first/business class in short haul and with better (read tougher) deals with cabin crew unions.

The eventual response of full service carriers to the LCC phenom was to launch LCC offshoots. United launched Ted, Delta did Song, British Airways went Go, Qantas did Jetstar etc. However the push for new brands and cost structures was not an all round success. Ted is still flying and Jetstar is the fastest growing Airline in Australia. But - Song is no more. Its operations have been absorbed into Delta and Go was hastily sold first to PE firm then to easyJet and absorbed into the easyJet brand.

This leaves me thinking about how distinct are the differences between an LCC and full service carrier. Before I could come to a conclusion in these musings, e-tid reported today (registration required) that Virgin-Blue is

considering setting up a ‘super low-cost unit’ to compete with Singapore-based Tiger Airways, which starts Australian domestic flights later this year.

So here we have a "I used to be a Low Cost Carrier but now I am a New World Carrier" being spooked by the entry in Australia of another LCC. The response - push the initial brand into full service (or as the CEO is quoted by eTid - "up market") and then act like a traditional carrier and create a new brand that does everything that Virgin Blue used to do but without the frills.

Fascinating strategy. It seems to me that there is a space in any market for carriers that base everything they do on price to the point of sacrificing customer service and convenience. However this model reaches a growth point especially in a market where for geographical reasons there is a limit to the potential for a short-haul market. Beyond that point service and flexibility have value to consumers. Similarly the scope for differentiation just on price is reduced. I expect that Virgin-Blue did not anticipate that it would find itself in that circumstance - having to increase costs by providing services for the business traveller to feed growth levels and then have to mimic its nemesis by launching a secondary brand. Brett and Virgin-Blue - if you do launch and new carrier to fight Tiger then it is time to cut the acronym crap (CTAC) and accept that you are a normal, everyday, regular airline that wants to provide business travellers with whatever they want (and charge accordingly) to keep them happy and flying.