Airline seats are mostly sold as commodity products. The genius of frequent flyer programs has been to take what is essentially an interchangeable thing — a seat one from city to another connecting in a third city — and create differentiation and brand loyalty.
What hasn’t historically worked in the US market is to offer a better value proposition. Certainly it hasn’t earned a price premium. American had ‘More Room Throughout Coach’ but they put seats back into their planes because customers weren’t choosing them over competitors. People choose, for the most part, on price and schedule.
It’s interesting that Virgin America is taking a different tack — they aren’t advertising that they’re more expensive but worth it. They’re advertising that you pay the same and get more.
They’re promoting travel out of the Dallas market with their new Love Field flights.
They’re pairing this with a ‘we’re cheaper after all’ .. a 2-for-1 deal. You enter your email address and the addresses of three friends (or three other addresses of your own, I suppose).
- You receive a 2-for-1 offer for your next Dallas Love Field flight
- Each of the other addresses gets a 20% off code for Virgin America travel in and out of Dallas Love Field.
I’m somewhat skeptical that Virgin will prevail here, because while customers will be happy to get more for the same price, I’m skeptical they will be willing to PAY more for more. Of course, Virgin’s salaries are significantly less than Southwest’s highly paid employees, so perhaps they can put that money into the product and remain competitive.
An interesting aspect of this is loyalty. Traditionally, it’s hard to steal another airline’s customers because they’re wedded to their existing frequent flyer program. But the “new” frequent flyer programs seem to engender less loyalty. When you typically only get a 10% rebate from WN, why not give Virgin a try on your next trip?
Has anyone received the 2 for 1 promo code yet? I have yet to see it.