Virgin Atlantic Exec Outlines Ambitious Two-Year Plan for IFEC with Gogo
Virgin Atlantic signed a huge deal with Gogo last year, as it started to bring its connectivity plans to the next stage. The airline hopes to begin offering connectivity across its entire fleet within two years. We talked to Reuben Arnold, director of brand and customer experience at Virgin Atlantic, about the airline’s connectivity plans, and the next stage of its connectivity strategy.
GCA Summit: What is your roadmap for offering In-Flight Connectivity (IFC) services? What is your vision of the concept of the “connected aircraft”?
Arnold: Connectivity, for us, is a key part of our customer strategy. We are looking to roll connectivity across our fleet quite rapidly. So, when we launched our 787 late in October, those initial aircraft came equipped with Wi-Fi connectivity. We are also retrofitting the rest of our fleet with the Gogo solution. For us, connectivity is a really important part of our service to customers.
We have a vision to be the connected airline over the Atlantic. Customers more-and-more expect connectivity wherever they are, whether up in the air or on the ground. For us, as a brand, we want to be at the forefront of those expectations. There is a basic offer to allow customers to remain connected in-flight. But, we are also looking, at how we as a brand at Virgin can use connectivity in an interesting way. So, we want to continue to use the technology we have on board to link up the end-to-end experience for the customer. It is quite a broad question but, in terms of our vision, we want to be the connected airline, and that is a core part of our proposition.
We hope to be offering connectivity across our fleet over the next two years.
GCA Summit: Why did you decide to partner with Gogo? Obviously, Virgin Atlantic wasn’t one of the first to sign a deal with the company. What was the thinking behind such an approach?
Arnold: There are a couple of reasons. Like a lot of airlines, we have looked at the different technologies that are out there. There is the inevitable Ku versus Ka debate. We were fortunate at the time that Gogo was about to launch its 2Ku solution. That, for us, was ideal for our need. It offered an unprecedented performance and enhanced coverage on what is ultimately proven technology, existing antenna technology and existing satellite technology. It is very much built on tried and tested technology, but offers the next level in terms of performance and reliability.
That was the first reason. But, also, as a partner, Gogo has a tremendous amount of experience, both operationalizing and commericalizing the offer. They are great when it comes to retailing, and making it a great customer offer. There are a lot of partners out there that can offer technology, but Gogo is a great commercial partner who can help us exploit the technology and that is right for us. In terms of customer experience, the support they offer is second to none.
GCA Summit: Was it a difficult decision?
Arnold: It was a very robust procurement process. We needed to make sure we got a good price. It wasn’t a particularly difficult decision when it came down to it. It was things like having a network operations system that was supporting us as a carrier in terms of reliability, but also offering great customer support, when customers are trying to connect, which made the decision easy. It really wasn’t that difficult a decision. They also had just announced the 2Ku solution.
GCA Summit: There is a debate about going with a Ka- rather than a Ku-band solution. What is your take on this? Why is Ku band the way to go for Virgin Atlantic?
Arnold: Ku is proven as a technology. There are dozens of satellites up there that can use this technology. But, it also has the potential to grow. So, with spot-beam technology and the evolution of 2Ku, we will be achieving very similar levels of performance to Ka band.
GCA Summit: Outside of the passenger experience, how will connectivity boost your overall operations?
Arnold: There are plenty of opportunities. We want to make sure our crew are connected so we are able to give them the most up-to-date operational information/passenger information — and making sure we can provide messaging and information to our crew in-flight. As customers become more-and-more connected, we need to make sure our crew are ahead of the game and have all the information they need. Even down to the fact that we are uploading content to our servers for in-flight entertainment. There are so many opportunities that we are only now starting to scratch the surface of. We want to be able to drive efficiency into our operations so if things go wrong, we are able to advise our customers on board.
GCA Summit: How do you see the Return on Investment (ROI) for Virgin Atlantic on such services? When do you hope to launch the IFC services?
Arnold: In terms of ROI, I think not having connectivity in the future will be seen as a weakness; that, for me, is the main thing. We are not looking to commercialize connectivity as a revenue stream. We are currently charging for Wi-Fi and connectivity on board. That helps cover some of the operational costs, but it is definitely not seen as an ancillary revenue opportunity. It is much more about continuing to remain ahead. For business customers, it is an extremely important way of maintaining our position in the market, but it is important for all customers.
GCA Summit: Have you been influenced by other sectors such as the hotel sector, for example?
Arnold: We look at hospitality beyond connectivity. Customers’ opinions are shaped at what they see on the ground. So, we like to see what trends are emerging in other verticals. Yes, you can offer basic connectivity but it is interesting to see what else you can do with that. How you use it will be a point of differentiation. So, we are looking to link up the end-to-end customer journey. We have a travel app on the ground and it will continue to be available as your travel companion, both on the ground and in the air.
GCA Summit: A number of airlines have now launched these services. What have been your learnings from the market so far?
Arnold: One of the key learnings is trying to be very clear on what the customers’ expectations are. We spent quite a bit of time on the technology, and which technology solution we wanted to go for. We were very keen to make sure ahead of the game, but still remain with proven technology so we have a proven level of performance for our customers. For us, how do we roll out this solution quickly? From a customers’ perspective, they want to know that if you offer connectivity, you are offering it consistently across your fleet, so you don’t want to offer it on some flights and not on others. For me, the objective is how can we make sure we reach a consistent customer offer.
GCA Summit: Some airlines like JetBlue and Nok Air believe a free offer is the best way to go. Do you see Virgin going down this route?
Arnold: There are fundamental differences in what those operators are offering when you look at satellite technology and ground-to-air technology. Currently, the cost of offering satellite connectivity is significantly higher.
I think charging for connectivity is also a useful way of managing bandwidth usage. You make sure you are maintaining a maximum amount of bandwidth for people that want it and need it on board; it is a good way of managing demand.
Another great opportunity for us with Gogo is that they also provide connectivity with one of our partners, Delta Airlines. There is a great opportunity for customers to seamlessly connect with our partner Delta in the United States and to be able to use their package across different aircraft.
GCA Summit: Other airlines are now looking to launch these services. Do you see these as a competitive differentiator?
Arnold: For certain segments of our customer base, it will be a differentiator and a deciding factor. However, some research shows that even when certain customers don’t use Wi-Fi, the fact that connectivity is available throughout the flight is a reassurance.
We actually have a number of aircraft with connectivity. When we have that critical mass and that consistency across our fleet, it will undoubtedly be a differentiator for certain segments that will be paying a premium.
GCA Summit: Where do you expect to be by the end of the year?
Arnold: Hopefully, we will be halfway there in terms of the rollout of these services. Our 787s are rolling out quite rapidly across our network. We have two 787s in service right now, and have already seen great customer feedback on both aircraft. Eventually, we will have 21 787s equipped with the service. So, it will be a chunky part of our fleet. So far, we have seen anywhere from 30 to 100 people using it on flights. It is what we expected.
GCA Summit: What innovative concepts are you looking at in terms of connectivity?
Arnold: We had the first live gig across the Atlantic with musical artists Rudimental and Gorgon City, a concert streaming live aboard the aircraft. That was to showcase connectivity. That was to promote the fact that we were rolling out connectivity. Ultimately, it is about what customers want and how we go about bringing it to them. Connectivity opens up a wealth of opportunity, we are now working on how we can differentiate our activity onboard. Having access to the Internet is great, but what else can we do with it? What content can we have onboard that customers can stream up with their devices? How can it link up with your travel app, and getting updates about the different stages in your journey? These are all things we want to exploit with this infrastructure.
Article originally posted on Global Connected Aircraft GCA Summit.