The Skift Airline Innovation Report is our weekly newsletter focused on the business of airline innovation. We will look closely at the technological, financial, and design trends at airlines and airports that are driving the next-generation aviation industry.
We also provide insights on developments in passenger experience, ancillary services, revenue management, loyalty, technology, marketing, airport innovation, the competitive landscape, startups, and changing passenger behavior. I write and curate the newsletter, and we send it on Wednesdays. You can find previous issues of the newsletter here.
At the Star Alliance and United Club lounges in Los Angeles, you can wait for your flight outside on an observation deck, perhaps while sipping Chardonnay, smelling jet fuel and enjoying one of roughly 330 sunny days each year.
It’s part of a newish trend of airlines and alliances opening clubs with outdoor decks. Some are in obvious places, like L.A. Others are not. Delta Air Lines has outdoor lounges in Atlanta and New York, while Virgin Atlantic has one in London. The terraces delight passengers, who pose for selfies by fire pits, while watching aircraft move on the ramp.
But it’s December now. And while Virgin Atlantic likes to brag it has the only rooftop garden at Heathrow, the airline has never figured out how best to use it because, unlike in Los Angeles, the sun does not shine year-round. “Winter in London proved to be the most challenging time for us to make this space incredible,” Daniel Kerzner, the airline’s vice president for customer experience, told me.
Enter the igloo.
This week, Virgin Atlantic announced it had built an eight-seat igloo on the deck, available to passengers through January 14. It’s part of a marketing deal with London’s Coppa Club, which uses seasonal igloos to goose low-season sales. At Virgin Atlantic, executives hope igloos will make the brand pop on social media. According to the release, the airline expects customers will take “highly shareable selfies in this unique location.”
I don’t see many igloos — I’m in L.A. — but apparently elsewhere they’re a thing. “Igloos have become a huge sensation in London, and we wanted to take it one step further,” Kerzner said. Kerzner, who earlier this year left Marriott International, where he was vice president of marketing, promised we’ll see more innovative ideas from Virgin Atlantic in 2018.
What do you think? What should Virgin Atlantic plan to help improve the brand’s positioning? Does it need to do more than have a month-long igloo popup?
And what’s with this igloo craze?
— Brian Sumers, Airline Business Reporter
The Week’s Links
Delta Air Lines Is Going After Future Business Travelers — While Still in College: At investor day last week, Delta’s chief marking officer said the carrier is courting university students as well as young professionals with lucrative jobs. Also interesting: Delta monitors spending patterns on its American Express-branded credit cards, keeping a close eye on splitters — or customer who buy on Delta and other carriers.
Video: Lufthansa Strives to Become as Data-Savvy as Netflix: At Skift Global Forum in New York earlier this year, I interviewed Lufthansa Chief Digital Officer Christian Langer. He told me he seeks to persuade all the group’s airlines to implement sophisticated ecommerce strategies used by major online retailers. As anyone who works in airlines knows, this is a tough task. He’s up for the challenge.
Spirit Airlines Names Next CEO as It Tries to Fix Old Problems: When Spirit replaced CEO Ben Baldanza in January 2016, it bungled the messaging. Baldanza said he left on his own, as part of a succession plan. But it didn’t seem that way, and investors received no warning. Spirit is not letting that happen this time. Investors are getting more than one year of warning. Current CEO Bob Fornaro will step down in January 2019.
25 Travel Moments That Mattered in 2017: At Skift, we recap the year with moments we think were important. I contributed three — one on the rise of basic economy, another on United’s dragging incident, and a third on the massive Airbus order placed by four discount airlines, all partly owned by Indigo Partners.
Should Ryanair CEO Michael O’Leary Step Down? The idea of replacing iconic Ryanair CEO Michael O’Leary would have been unthinkable six months ago. But times change. Maybe Ryanair needs a leader who is less antagonistic to labor. Or maybe it just needs a fresh start, Bloomberg View columnist Chris Bryant writes.
Southwest Sees U.S. Tax Bill as Opportunity to Buy New Planes: This is impressive spin by Southwest CEO Gary Kelly, a proponent of tax reform. More than most U.S. airlines, Southwest needs to place a massive order for new planes. It will have to replace older jets no matter the tax implications. But, hey, why not credit tax reform?
In It for the Long Haul: Passengers love to complain about airlines, but for business class travelers, the product has never been better. At least that’s what I say in this Globe and Mail story about long-haul business class. “Almost every airline has seats that turn into a flatbed. Most airlines are investing in new airport lounge,” I noted. “Many airlines are improving their food and wine. Things are a lot better up front than they were a decade ago, when just about every airline has recliner seats, and not beds.”
First Class Airline Travel. Is It Dead? Airlines Should Expand Their Brands With Premium Perks: There is no shortage of stories proclaiming first class is dead. I’ve even written a couple. But this report from CAPA-Centre for Aviation is more interesting than most. Its conclusion: “First class mostly exists not for direct revenue contribution, but for marketing.”
How Flyers Can Relax and U.S. Airlines Can Compete — With Spas: A couple of things here. Spas are not a new airport trend. And while the people quoted in this New York Times story may say otherwise, few passengers choose flights based on the spa experience. Business travelers tend to choose flights based on price and schedule. They always have, and they probably always will.
Norwegian Wi-Fi Update
Norwegian Air is expanding its U.S. network again, with new less-than-daily flights from New York to Madrid and Amsterdam, and Los Angeles to Madrid and Milan. Boeing 787-9 aircraft will fly all four routes.
Norwegian uses the Dreamliners as a marketing tool, and it should, considering how much it costs to new lease the fancy planes. But as much as Norwegian promotes the onboard experience — customers can order food through the entertainment system and flight attendants can help control jetlag through mood lighting — something is missing. Neither Norwegian’s 787s nor its Boeing 737 Max fleet have Wi-Fi. It is a perk the airline has long promised but never delivered.
Regular readers know I rarely will fly without Internet — I’m a millennial, and I’m addicted — so I asked Norwegian spokesman Anders Lindstrom about the holdup. While he didn’t explain why it has taken so long, he promised Wi-Fi is coming soon.
“We will start installing Wi-Fi onboard both the 787 Dreamliners and the 737 MAX mid-2018,” he said.
He didn’t say when Norwegian would finish, however. Let’s hope it’s soon.
Tweet of the Week
The lobbying group for the largest U.S. airlines — just about all of them except Delta Air Lines — is joining the suck-up-to-the-president game.
Is this what a lobbying group must do in 2017 to ensure the president will take it seriously? Presumably the airlines still want safety regulations.
— Airlines for America (@AirlinesDotOrg) December 15, 2017
Meet Me in San Francisco
Want to know about big travel trends coming in 2018? Skift is holding three free events in January to share our Megatrends — an overview of what we expect for travel in 2018.
We’ll be in New York on January 16, London on January 18, and San Francisco on January 30. In addition to lively discussion, we will have refreshments. And you’ll leave with a fancy magazine, featuring a story by me about how airlines are rushing to refine ecommerce strategies.
I’ll attend the San Francisco event, and would love to meet you there. Or you can meet my colleagues in London and New York.
Details on all the events here. You will need tickets.
Three You May Have Missed
You won’t get a newsletter next week because of the holiday. But here’s some extra content to get you through the month. I enjoyed writing these three stories in 2017 more than others.
Business of Pajamas, Pillows and Bragging Rights on Airplanes: Before Harry Zalk, I hadn’t thought about launching an Airline Insiders feature — a question-and-answer series where I ask airline employees and vendors about the intricacies of their jobs. But I met Zalk at a London conference and he impressed me with his zeal for airline pajamas, and amenity kits. He said the global soft products and amenities market is probably worth at least $500 million. He helps match luxury brands with airlines.
For the First Time, Allegiant Air Learns What It’s Like to Configure a New Airplane: If you fly U.S. discounter Allegiant Air, you may see a bright orange stripe running along overhead bins. That’s because many of its planes are former EasyJet Airbus aircraft, and it’s cheaper to keep the cabins as they were, rather than retrofit them. But earlier this year, Allegiant added its first new planes and had to decide how to configure them. One Allegiant executive described it like renovating a house. “They [Airbus] kind of walk you through the process and say, ‘Now it’s time to make these 14 decisions,’” he said. “That’s when we open the catalogue and say, ‘Oh, shit, there are many, many options.’”
Spirit Airlines Wants to Win Back Customers by Being Nicer: I spoke with Spirit Airlines CEO Bob Fornaro over the summer during what might be described as his apology tour. Baldanza, his predecessor, built a formidable low-cost carrier, but he did not create a customer-friendly airline. “For the most part, you can only do that for a short period of time,” Fornaro told me. “We almost went out of our way to poke the customer in the eye. And once a business gets more competitive, you can’t do that anymore.”
Skift Airline Business Reporter Brian Sumers [[email protected]] curates the Skift Airline Innovation Report. Skift emails the newsletter every Wednesday. Have a story idea? Or a juicy news tip? Want to share a memo? Send me an email or tweet me.