Ancillary revenue key to Virgin America's growth strategy

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US start-up Virgin America will soon permit passengers to order a variety of upscale items via its “Red” seat-back in-flight entertainment (IFE) system, as part of a larger program to boost ancillary revenue at the low-cost carrier.

Partnerships with high-end retailers are being brokered, and sale items are expected to be “shortly” announced, says Virgin America director of in-flight entertainment and partnerships Charles Ogilvie.

“If anyone flies today, you’ll see a shop button [on the IFE screen] – that’s obviously the area it will be in.”

At present, passengers can order food, beverages, premium television channels and new-release movies over the system’s touch screens; a raft of television channels and a category of music options are free.

The carrier in 2008 will begin charging for AirCell connectivity services in the main cabin. Passengers will be able to access the Internet and virtual private network (VPN) e-mail accounts using WiFi-enabled devices.

Part of Virgin America’s strategy is to also integrate the broadband offering with its IFE system. “Six years ago, folks were saying the iPod and DVD players would make the installed seat-back IFE system non-essential, but what airlines have found and what passengers have consistently asked for, is hey, 'I don't necessarily need to have a full-blown laptop'.

“As we move forward, we will continue to offer things that might be also available on laptop, but are more easily consumed by passengers via the seat-back. The seat-back becomes a delivery vehicle for a more beneficial airline cabin experience.”

Some voice applications are also being explored by Virgin America. Allowing passengers the capability to listen to voicemail messages is, for example, “obviously a high value for some passengers and it would be non-disruptive”, says Ogilvie.

The US Federal Communications Commission and the FAA currently prohibit the in-flight use of cellular telephones. Until regulatory barriers are lifted, VOIP (voice over IP) may be an option for passengers, but Virgin America “must consider” how it diminishes or moves the overall availability of bandwidth, says Ogilvie.