Photo Credit: Virgin Atlantic.

The A330s feature Panasonic’s eX2 entertainment system, which has a USB drive that enables passengers to connect their own devices to the system (see picture below).The carrier adds that “later this year Virgin Atlantic travellers flying on the A330 will be able to send and receive emails and texts on their Blackberries, handheld PDAs and other mobile devices.”

Anyway…more thoughts on this next week…possibly.

The Virgin brand has always been synonymous with style and independence. Virgin Atlantic, the first of the Virgin airlines, was founded in 1984 by the mercurial Richard Branson as a young and edgy airline designed to counteract of the staid and stodgy British Airways. The airline started out by serving Newark Liberty airport from London Gatwick with a single 747-200, and later expanded its list of destinations as it received more aircraft. Virgin has always had an adversarial relationship with British Airways. Virgin has never had the scale to truly compete with its Heathrow stable mate, but has constantly played the buzzing mosquito, engaging in legal action, reporting BA to the authorities as a whistle blower, as well as publicly opposing any co-operation between BA and it’s Oneworld partner American Airlines.

Photo Credit: Devesh Agarwal, BangaloreAviation.com.

In truth Virgin has always been a niche player at Heathrow, whose unique experience is a draw for those who desire something different. To a certain extent, this has been by design. Virgin Atlantic has made the conscious decision to remain smaller, as scaling up its unique premium product offerings would be exceedingly difficult. That being said, its Terminal 3 premium check-in and car service is miles ahead of its competitors, and the Virgin Clubhouse at Terminal 3 is consistently voted one of the best airline lounges in the world. The other side of this coin is that its operations are less able to withstand irregular operations. On one occasion, I was notified three days in advance that my flight from London would be delayed by 12 hours, because the aircraft had maintenance issues in Sydney.

Virgin Atlantic was arguably the single greatest beneficiary of the bankruptcy of both TWA and Pan Am, as the resulting 1991 re-shuffle of the Bermuda II treaty granted it access to London Heathrow, the world’s busiest international airport. Under Bermuda II, Virgin Atlantic became one of 4 airlines with regulatory permission to fly between the United States and Heathrow. The other three airlines were BA, American and United Airlines. Virgin Atlantic grew quickly in the 1990’s, utilizing its prized Heathrow location to open up routes to the United States. In 2000, Singapore Airlines bought a 49% stake in the airline form Virgin Group, and the two have a deep code-sharing relationship. Virgin currently serves seven U.S. cities from Heathrow and an additional two from Gatwick. Virgin also benefitted from government scrutiny of American and BA. Despite their membership in the same global alliance, anti-trust concerns on both sides of the Atlantic prevented cooperation between the two on transatlantic routes between the US and UK. Regulatory barriers to entry in its most lucrative markets protected Virgin from the brunt of competition, but Heathrow’s slot restriction also prevented more robust growth. Virgin is the number-three slot holder at Heathrow behind BA and BMI.

Today, however, Virgin Atlantic is at a crossroads. In early 2011, Virgin Group announced that it had engaged Deutsche Bank to market its share in the airline, and a few weeks later, Singapore Airlines announced it was looking to sell part of its stake. Three distinct factors have led Virgin to this point. The first is its lack of an alliance. While most major airlines, with the exception of the large Middle Eastern carriers, have joined one of the three major airline alliances, Virgin has fiercely guarded its independence, while going without passenger feed provided by alliance members, save for other Virgin carriers in the United States and Australia. Secondly, the advent of Open Skies in 2008 took away its advantage on US-Heathrow flights. Even though Heathrow is still slot constrained, Delta and Continental have made notable inroads on the lucrative New York to Heathrow routes since Open Skies came into effect. The third, and possibly most important, factor that has put Virgin Atlantic in its current position, was the anti-trust immunity granted to a joint venture between American, BA, and Iberia in 2010, for all transatlantic operations amongst the three carriers.

At this point, simply joining an alliance, while necessary, is not sufficient to solve Virgin’s problems. Whether Virgin joins Star Alliance or Skyteam will depend on who, if anyone, takes a stake in the carrier. It needs to undergo a structural change. Etihad has made its interest in the carrier openly known, as has Delta. An offer from Etihad, while providing an infusion of cash, does not offer much in the way of operational overlap for Virgin. Further, an investment by Etihad in Virgin could bring to a boil the simmering argument between Europe’s largest carriers and their upstart Middle Eastern counterparts over fares, export credits, and the alternate financial reality many of these younger carriers exist in. It could well encounter many regulatory and political hurdles.

Delta has previously made attempts to invest in overseas airlines, most notably JAL in 2010, although it was unsuccessful. While it was only Delta who’s name was mentioned in relation to Virgin, the notion of a joint investment by Delta and Air France/KLM is far more intriguing. The inclusion of AF/KLM is important because it goes to satisfying European airline ownership requirements. A Delta/Virgin/Air France/KLM tie up would instantly create a transatlantic juggernaut. If Skyteam has one glaring weakness, it is a lack of a large presence at Heathrow, which would be remedied here. The only existing Transatlantic overlap between Virgin and Delta is at JFK, where Delta has been growing its presence over the last 2 years. Further, Virgin is a strong player on the LAX to Heathrow route, where Delta and Air France unsuccessfully tried to start service, and Virgin’s Miami service would give Delta a strong presence in a market where it is only recently been trying to gain a toehold. The two airlines have 6 dailies between JFK and Heathrow, which, while not directly matching the new hourly shuttle service from BA and American, would put both carriers in a much stronger position in this market. Virgin has an additional 3 dailies to Newark. Virgin would also greatly benefit from passenger feed provided both at Heathrow and US destinations by its new Skyteam partners. From an equipment perspective, Virgin would see economies of scale provided by the diverse fleets at Delta, Air France and KLM, and could drastically reduce its maintenance costs utilizing the respective MRO facilities. From the other side, a prospective tie up between these four carriers has some regulatory risk, as it would represent a much larger share of transatlantic passenger traffic. The lack of route overlap, and the recent AA/BA/IB tie-up go a far way to alleviating anti-trust concerns. However, Air France/KLM’s history of operating as two separate companies, combined with the benefits afforded to all parties make this possibility quite tantalizing for airline industry watchers.

Another, albeit more conventional, option is for Deutsche Lufthansa to make a sizeable investment. The German carrier has not been shy about making investments, or outright purchases of other carriers. It currently owns Swiss International Airlines, Austrian Airlines and Virgin’s Heathrow stable mate BMI. Lufthansa, a founding member of Star Alliance also has very close ties with Singapore Airlines. Under this scenario, one could envision a merger between BMI and Virgin, with BMI being renamed Virgin Europe. This would give Virgin sizeable European feed from legacy BMI operations. Virgin has a long-standing codeshare relationship with Continental, which would be further solidified via an entry into Star Alliance. An entry into Star would also dovetail with the carrier’s code share relationship with Air New Zealand. For Virgin, entering Star Alliance would make a lot of sense, given its relationships with Singapore Airlines, Continental, and Air New Zealand. Given Singapore Airline’s current investment in Virgin, Lufthansa’s ownership of BMI, and the ties that Virgin has to numerous Star Alliance members, this scenario is less farfetched than it might seem.

The Global Financial Crisis brought the airline industry to its knees. Every carrier has fought for its survival, and corporate survival has created some strange merger partners. The above represent only two possible scenarios for the future of Virgin Atlantic. No one knows exactly what will happen but in the world of the airline industry, pretty much anything can, and the most logical option is often times not the one taken.

Gavin Werbeloff can be found on Twitter at Travel_Buddha.

The app from the get go looks pretty slick – there’s a nice 3D globe you get to spin around, allowing you to see all of the Virgin Atlantic flights in the air. That’s cool.From using other flight tracking tools (including Virgin’s own V-Flyer), the positions of the aircraft are off but you still get the same information. And as a dork it’s nice to get the registration number.

But the globe is also, well – annoying. It appears that all of the flight tracking data is based off of it. This is a problem, especially when you want to find information for your flight – the app needs to load the data for every airborne Virgin Atlantic flight before it will let you search for a specific route.

This, in my view, is the apps biggest problem, just because of the amount of data that needs to be downloaded. This morning I’m blogging from my home in a rural area with 3G coverage, and everything downloads in under a minute. (Of course, my home Wi-Fi connection is a bit faster.) But yesterday I was in an urban area (Providence, RI), and downloading all the flight data took nearly five minutes at times. And since the iPhone doesn’t support multitasking, all one can do is sit and watch the aircraft data load…slowly.

According to the app’s page on the  iTunes store, there has already been an update to address this, and I’ll play around with this more when I’m back in Providence tomorrow.

Also note how I said airborne flights earlier.  If I wanted to check at what time the Boston-London flight arrived in London this morning, this app won’t help me, as I can only find the status of the LHR-BOS return.

You can also subscribe to flights to send you push notifications (pictured below), except the times are given in UTC, it appears. So if you’re here on this side of the pond, that arrival time might give you a bit of a scare!

And here’s a quick rundown of some other features – there are a couple of simple games, where you need to find Richard Branson on the globe, or fly a hot air balloon around the globe while avoiding bad weather. They’re simple, and fun. The app also features the ability for Flying Club members to check up on their accounts. Finally, the app uses Virgin’s V-Flyer to provide some useful features. You’ll find seat maps and also learn what IFE system is on your flight, etc.

Overall, this iPhone app is a good start from Virgin Atlantic. But it really needs some help in the performance area. And there are some big features missing that other airlines have, like mobile check-in, though Virgin says they “will probably” add this and other booking features in the future. For now, I suggest bookmarking V-Flyer.com, which has a great iPhone version already, and can provide the same features as this app (minus the cool globe), and much faster.

Virgin Atlantic says that Silver and Gold members of its Flying Club program will get perks like priority check-in and luggage, and Gold members will receive free lounge access. And while it’s not mentioned in the Virgin Atlantic press release, Gold members of Virgin Blue’s Velocity program receive free lounge access to some Virgin Atlantic Clubhouses, priority check-in, priority boarding, and others when flying with Virgin Atlantic.

“Through this arrangement we are able to further reward those who prefer to fly with and remain loyal to Virgin branded airlines,” said Steve Ridgway, Virgin Atlantic CEO. While I do not what to read too much into that soundbite, it sounds to me like Virgin is working on getting some kind of alliance going. Granted, there’s only so much they can do with a few carriers, but it’s still very interesting, and I wonder where Virgin America fits into this picture. It was announced last year that the carrier would get closer to Virgin Blue and allow passengers to earn miles in either loyalty program (the two carriers already have an interline agreement).

Photo Credit:

http://www.flickr.com/photos/moody75/ / CC BY-SA 2.0

Virgin said that the additional seats “will go on sale over the next 24 hours.” That was sent out late in the afternoon yesterday, so everything should be loaded in a few hours from now.

Fortunately, Virgin Atlantic sent over some pictures of its Clubhouse at Gatwick to drool over – the 130-seat lounge has just re-opened after a renovation. The lounge has some interesting features, including a Cowshed Spa (like the one at Heathrow), an Entertainment Lounge and Business Area (complete with a Wii!) , and an area dedicated to families, which I’m sure will be appreciated by both families and those who don’t want to deal with loud families.

I’d love to explore the lounge in person – too bad my college student budget doesn’t allow for Upper Class tickets!

You can explore the lounge here. Take a look at some pictures after the jump.

Cowshed Spa.

“Virgin Atlantic absolutely agrees with American Airlines that a high level of market concentration should be an insurmountable hurdle to obtain antitrust immunity for a possible alliance such as BA/AA. Mr. Arpey has clearly highlighted why dominant groups like AA and BA shouldn’t be given regulatory clearance. We have asked the DoT to further investigate his views as American cannot have it both ways.”

So, in response, American issued its own press release:

Once again, Virgin’s comments are long on accusations and rhetoric and short on the facts. American is opposed to a Delta-Japan Airlines (JAL) tie-up for the same reason we are confident our transatlantic immunity application will be approved: to preserve and enhance competition.

What’s funny is the different statistics the airlines use to try to prove their point. For example, Virgin says:

The Delta-JAL joint venture would result in a total capacity share on US-Narita routes of 54%, significantly smaller than the 64% share that BA/AA would hold on US-Heathrow routes.

And American says:

SkyTeam with a Delta-JAL combination would account for nearly 60 percent of U.S.-Tokyo passengers, as opposed to oneworld’s approximate 44 percent share of U.S.-London passengers.

In Virgin’s case, its more beneficial to refer to specific airports to make the numbers look better for their case.

Anyway – at least this is fun to watch! But really, I think that Arpey could have been a bit more careful when talking at the event to avoid giving Virgin some great material.

Virgin Atlantic has offered two free checked bags for those in economy, but that allowance will be cut to one. If the fee for the second bag is paid online, fliers are charged $48, but passengers who check their bags at their airport will have to pay $60.

Premium Economy passengers will still have two free bags, three for Upper Class, and Flying Club Gold members will receive one bag additional to their allowance. Virgin still allows for one free bag of sports equipment.

There are a few exceptions – those in economy traveling from Heathrow to either Nairobi or Lagos can have an extra bag, as can economy passengers flying from the United States to India.

While I’m never a fan of new fees, this move does simplify things a bit. Virgin’s current system has a system by piece on some routes, and by weight on others. Now, everything will be done by piece.

Details can be found here.

Photo Credit:

http://www.flickr.com/photos/eisenbahner/ / CC BY 2.0

The “hard” product, at least in the case of an airline, refers to things like your seat – what features it has, how comfortable it is, etc. The “soft” product, on the other hand, deals with things like the onboard service and food. I’d argue that that the latter is often more important, and can make-or-break an airline experience. Sure, a great seat is nice, but a grumpy or unprofessional flight attendant can ruin things quickly, I think.

So how did I experience these at NBTA? Well, obviously, I sat in the seats. But the airlines also had people there to explain their respective offerings, and that made all the difference, I think. For example, let’s look at the American carriers. After I had sat in a few seats, I would probably rank the carriers in this order:

1. American
2. Delta
3. Continental
4. United

But, after I thought about them a bit more, the ranking is more like this:

1. United
2. Delta
3. Continental
4. American

Wait, how did American and United switch places? Well, United has a much better business class seat than American, but American had two fantastic flight attendants manning their booth, and one of them gave me a solid ten minutes of her time explaining the airline’s offerings. United, on the other hand, just had a sales representative. Delta, too, had a fantastic demonstration with some great flight attendants:

Getting tucked in by Delta.

So, why does having professional flight attendants who know their product at a trade show matter so much? Because convention attendees will think that’s exactly what they’ll receive on their next flight. As such, I think it’s very important that airlines have enthusiastic employees at events like NBTA.

I think the Virgin airlines were the best in this area at the show, and that was especially apparent when comparing V Australia (great flight attendants) to Qantas (no flight attendants).

Trying out V Australia’s premium economy seat.

A Virgin Atlantic flight attendant explains the features of Upper Class.

I promise I’ll be done with NBTA posts this week, by the way.

In a move that wasn’t too surprising, American, British Airways, and Iberia (along with Finnair and Royal Jordanian) applied for anti-trust immunity. They even set up a website to get support for the move (hat tip to Lucky for the link). Right now I think I like the deal. American and British have always been close and I think cooperating a bit further in terms of operations and other areas (like frequent flier programs) can help them run more efficiently.

Richard Branson, founder of Virgin Atlantic, isn’t too pleased at all. I’m not surprised – Virgin and BA have been bickering since before I was born! Yesterday an article of his appeared in the Wall Street Journal. He claims if the application is approved, it would be bad for air travelers. Mr. Branson definitely does makes some good points in his article, especially when he mentions the lack of open slots at Heathrow. He also criticizes Open Skies a bit, and then notes how much capacity BA/AA would have in certain markets:

• 80% in Boston
• 75% in Miami
• 66% in Chicago
• 63% in New York (JFK)

Guess who a major competitor is in all of those markets? Virgin! The airports he chose are certainly interesting. For example, he didn’t mention Newark (where BA and Virgin compete). Branson probably made that choice because Continental flies the route as well, making JFK a stronger example. Los Angeles is also missing – maybe it is because the Open Skies agreement (which Mr. Branson expresses distaste for in the article), has now allowed Air France to enter the Heathrow market and provide more competition.

I noticed one other thing about the article. Mr. Branson notes that “BA just by itself has more capacity from Heathrow to the U.S. than either Star from Frankfurt or SkyTeam from Paris,” but still talks about market share on some routes, which is a bit odd. In Boston, for example, SkyTeam has 100% of the direct flights to Paris, and Star Alliance has 100% of the direct flights to Frankfurt. SkyTeam also has a majority of the flights to Paris from JFK, just like British Airways and American (oneworld) have the majority of the flights to Heathrow.

It seems to me the Mr. Branson is just concerned about the routes where his airline has a presence. He does note that “no other airline alliance granted antitrust immunity, whether Star at Frankfurt or SkyTeam at Paris, would have such a stranglehold over such an important international airport and such major air routes.” I think I would disagree with him on that as both Lufthansa and Air France have such a large number of long-haul flights from their respective hubs.

A quick disclaimer, by the way. I love the Virgin Atlantic story. Richard Branson and his then-partner Randolph Fields had to cut through a lot of regulatory tape to get the airline started (the Wikipedia article is really good in describing it, I think). I really look up to Richard Brandon and admire his entrepeneural spirit. I just really disagree with him on this one.