Branson, we have a problem
I warn you against believing that advertising is a science. -Bill Bernbach
The quote can be applied to a brand as much as the ads created for them. Few things are better examples of this than Virgin America .
Back in days of yore, flying was awesome. People used to get dressed up as opposed to wearing sweat pants and slippers. The food was good, and not the butt of every amateur stand-ups' jokes. Problem is, the flying from days of yore happened before airlines were deregulated, a move that ushered in the era of low cost airlines that cared little for nostalgia and more for the bottom line.
Enter from stage awesome, Virgin America. Richard Branson started this airline in San Francisco in 2007 to bring some much needed glitz and glamour back to flying in America. Or so it seemed.
On paper it sounded perfect. We had a charismatic icon of a founder, a sweet n' sexy vision and a bunch of wealthy silicon valley patrons wanting to ride the digitally savvy neon club in the sky from Virgin's San Francisco hub.
Problem is not enough of them are. San Francisco Chronicle reports the airline has recorded just one year of profit in its five years of existence.
Virgin may be a victim of its own vision. As Atmosphere Research Group analyst Henry Harteveldt said in the article, "Virgin pays attention to design, product and service details...Virgin is the most experiential of U.S. airlines."
All well and good, if people are paying to have the experience. But they aren't, for a myriad of reasons. High fuel costs, limited routes, a recession and high ticket prices aren't helping. Neither is the competition in the form of both low cost airlines, and well-branded jaunty airlines like Porter in Canada and meltdowns aside, Jet Blue .
Since 2007, Virgin has posted a net loss of over $671 million dollars. But how can this be? This is a well-liked brand on social media! You mean, likes and shares and retweets aren't translating into profitability? Even after five years?
Virgin for its part is doubling down on its efforts to be cool and stylish by recently redesigning flight attendant uniforms, and tweaking their in-flight entertainment. But one has to ask, how wise a decision is this? Isn't it like putting an addition on a house that has stayed for five years on the market unsold?
While The San Francisco Chronicle article which came out in August had Virgin suggesting cautious optimism for profitability, an article in Time a few days ago, suggested otherwise. Quoting Hunter Kaye, an analyst at Wolfe, Trahan & Co:
Mostly, Virgin America seems to have misread what travelers wanted most, and what they were willing to pay for. “They had an assumption that consumers would choose product quality over price and convenience and network carriers responded with force.”
Time went on to declare that Spirit Airlines the low cost airline that very antithesis of glamor and service is due to be one of the only profitable airlines this year.
While Brad Tuttle, author of the Time article ends thusly:
So who is to blame if an airline that’s comfortable and treats passengers well fails, while a carrier that annoys and nickel-and-dimes customers at every turn is a run-away success? We all are.
But I don't buy it. Because it isn't that simple, for several reasons. Remember the grandeur of flying from days of yore? Well, I frankly don't, because I wasn't old enough. Generations like myself have grown up with The Roaming Gnome and fourteen years (!) of William Shatner going to bat for us. It's a bit like trying to convince someone that taking the Bus was once upon a time an amazing travel experience if you've only
Frame of reference aside, the economic times aren't helping people make the decision to spend more for touch screens, shag rug check-in sections and the chance that a cool guy who also happens to own a bunch of companies will retweet you. Add to this Virgin's decision to focus on upgrading its "experience," rather than its flight routes and it seems like a set up for failure.
You can get the social media right, you can have great ads. You can get the experience of flying right, you can get everyone loving you, really really loving you, man! But unless you're getting enough butts in those fine Corinthian leather seats on those flights so you can cover your overhead, it won't mean much.
Advertising like business, may not be science. But when you start counting up the costs it doesn't take a scientist to know something ain't working as good as it should. If it was, we'd all be drinking Virgin Cola.
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