Look, a Flying Saucer!

Imagine my surprise when, during the long flight from Los Angeles to Australia on VAustralia, I lifted my tea cup and saw a complete printed sentence on the saucer. As I squinted my weary eyes, surprise turned to amusement: "Look, a flying saucer!'' I read.

But then I should have expected the unexpected - even whimsy - on V Australia, a member of the far-flung Virgin-branded airlines. Like its airborne cousins -Virgin Atlantic Airways being the best -known - V Australia puts some of the fun back in flying. I say "some'' because airlines can do nothing about airports, and necessary but often-clumsy security rules. But while not neglecting to fly safely and efficiently, V Australia - the long-haul, international arm of Australia's number two carrier, Virgin Blue - reflects the UK's Virgin Group founder Richard Branson's roots in the entertainment industry: it never forgets to entertain.

A few words of explanation. Ten-year-old Virgin Blue and two-year-old V Australia are minority-owned by Branson, the media-savvy British billionaire and floppy-haired entrepreneur. Like Virgin America (www.virginamerica.com) in the United States, Virgin Blue and its affiliates - collectively known as the Virgin Blue Group of Airlines (www.virginblue.com.au) - license the Virgin brand from Branson, who forgoes operational control and harvests revenue from his stake. But while Branson doesn't run these airlines, clearly his corporate DNA is in them. And that's a good thing.

There is, for example, the stand-up, six-person bar in V Australia's business class. There are the stylish black, V-necked PJs, also in business class. There is the wide-ranging and easy to use in-flight entertainment system - important on those 13- and 14-hour trans-Pacific flights between Australia and North America. There is the cool mood lighting that makes you feel you've just strolled into a club. And there is a really charming touch when the interior cabin lights go down: small pinpricks of light appear in an indigo background, creating a starry night-time "sky''.

All this is, of course, by design. "We wanted to take a fresh look at long-haul,'' Virgin Blue's Liz Savage told me in a telephone interview on my recent visit to Sydney and Cairns. "What really makes a difference is the service quality,'' said Savage, the airline's group executive commercial. "We have a very different mindset. We're a bit more up-to-date, a bit more light-hearted, as well.''

As a later entrant into the market, Virgin Blue and V Australia strive to differentiate themselves from the 800-pound gorilla in that market, Qantas. Qantas is itself a high-quality airline and it has a decades-long head start. In Australia's continental domestic market, Qantas has two-thirds of the market, to Virgin Blue's one-third, said Savage, speaking from Brisbane, where Virgin Blue Group of Airlines has its headquarters. Still, that's good for a young company and is reflected in what Savage says are 90 percent domestic load factors.

Like all airlines, Virgin saves its pampering for high-yield, business-class fliers and long-haul intercontinental service. I flew Virgin Blue between Cairns and Sydney, where the product is more than respectable, though not posh. There is not much pitch - airline-speak for legroom - and food is offered for sale, as it is on virtually all U.S. domestic carriers in economy class.

This reflects Virgin Blue's roots as a domestic, low-cost carrrier targeting fare-conscious leisure travelers. It is now going after more free-spending business travelers - and this is especially true on international routes with fledgling V Australia.

"We are very successful in small- and-medium-sized markets,'' Savage says of the domestic operation. "Virgin Blue was an LCC; now, we're focusing on the corporate market.''

Like other Virgin-branded airlines around the world, Virgin Blue/V Australia is staying outside the three big global airline alliances and striking bilateral deals. Its major new initiative is with Abu Dhabi's Etihad Airways and the Aussie company is moving closer to Air New Zealand. V Australia last month launched service between Sydney and Abu Dhabi, where it is establishing an international hub, giving it greater access to the burgeoning Middle East aviation market and to Europe. Savage praises Etihad's high-end product as a good fit for V Australia. Having flown with both airlines, I agree.

Both have exceptional customer service, for one thing.

"We don't call our customers 'passengers,'' Savage says, "we call them 'guests.' '' Of course, so do some other airlines, and even government departments in some countries have taken to calling - sorry, 'rebranding' - members of the public "customers.'' More important than branding in this instance is employee training, and both V Australia and Etihad have tuned-in, attentive staffs that seem to know what you want before you realize you want it. That in itself helps both carriers stand out - although their young fleets don't hurt, either.

Meanwhile according to Savage, the company will seek more international bilateral deals even as it tightens its relationship with Etihad. Coordinated schedules, shared lounges and, eventually, shared frequent-flier miles will enable travelers "to earn and burn,'' Savage says.

Like other airlines, Virgin is being hurt by the cascading crises that have hit the Asia Pacific region this year: A cyclone in Queensland followed by flooding, the earthquake in Christchurch, New Zealand and the triple whammy of earthquake, tsunami and radiation leaks in Japan. That's not to mention the rising cost of oil, driven in part by the fighting in Libya. Like its competitors, Virgin Blue is hedging fuel prices, adding surcharges and raising fares.

Sensitive to the situation, Savage expresses tempered optimism. Of the rains that brought mud and floods to Virgin's hometown of Brisbane, Savage remarks "I don't want to underplay it,'' adding that, as fast as they can, people and companies are getting back to normal. "Queensland is 98 to 99 percent open for business,'' she says. "The message is "Come and enjoy.' ''

David Cush: "A Bad Rule'

Come April 29, a U.S. Federal Aviation Administration rule will require airlines at domestic airports to allow passengers whose plane has been sitting on the tarmac for at least three hours awaiting takeoff to leave the plane. Airlines that don't comply with the forthcoming rule face fines of nearly $30,000 per passenger on affected flights.

Airlines hate this rule. American Airlines, Delta Air Lines and JetBlue Airways have already applied to the FAA for a waiver at New York's John F. Kennedy International Airport, where runway reconstruction is expected to lead to more delays at an already notoriously congested airport in the months ahead. In a recent speech, Continental Airlines' new CEO, Jeff Smisek, said his airline will simply and necessarily cancel flights rather than knuckle under to the new rule or pony up the money for large fines.

The latest voice condemning the rule comes from David Cush, the CEO at Virgin America. Cush told me in a wide-ranging interview this week that while Virgin America has not asked for a waiver at JFK, the pending rule is "a bad rule, with unintended consequences.''

Cush was in a senior position with American before taking the top job at Virgin America, a San Francisco start-up that began flying in August 2007. Speaking of the pending rule, he said that, at a minimum, "delaying the rule 30 or 60 days'' would be a good idea.

"We are a small player at JFK,'' Cush told me. "American, Delta and JetBlue are the elephants.'' Nevertheless, he added, "We're all going to have a huge problem the first time thunderstorms roll into JFK in July or August, and there are 60 or 70 airplanes tied up at JFK.'' At such times, he said, Virgin America will accept delays of up to 2 hours and 15 minutes and then decide - 45 minutes before the new limit kicks in - whether or not to scrub the delayed flight.

Virgin America - minority-owned by British billionaire Richard Branson's Virgin Group - had a nightmarish experience on March 13, when VA flight 404 bound for JFK from Los Angeles International Airport was forced by bad weather on the East Coast to land 90 miles from New York and bus passengers to JFK. They got there at 3 a.m., 16 hours after departing LAX on a scheduled 5-hour flight. Cush wrote letters of apology to every passenger on the plane, and the airline refunded their fares and gave out $100 vouchers for future Virgin America flights.

"Flight 404 was unfortunate, but passengers had two opportunities to get off the plane,'' Cush averred. As for the new rule, "Taking away the discretion of the captain to make the decision is short-sighted. Ultimately, it is passengers who will decide'' if the rule will be effective, he said.

Asked if he expects consumer unhappiness about the new rule once flights are cancelled in compliance with it, Cush was blunt:

"Absolutely, and it won't take long.''

It's going to be an interesting spring and summer in the sky.

Like a Virgin

They play hardball in the travel biz. Ask anyone at Virgin America, a San Francisco-based, low-fare, high-style airline that launched commercial passenger service more than two years ago - and hasn't stopped fending off legal challenges ever since.

I don't know if Virgin America - which licenses its name from minority owner Richard Branson's UK-based Virgin Group - ever truly expected a smooth ride, but if so, I imagine the carrier has lost its innocence by now.

First, the fledgling airline's application to the U.S. Department of Transportation to begin service was held up when several mainline U.S. competitors, led by Continental Airlines, charged it wasn't in compliance with U.S. laws that restrict foreign ownership of any U.S. airline to a minority share. The application was approved, but only after the airline jettisoned its founding CEO, Fred Reid, who the DOT thought was too close to Branson. Branson tapped Reid, a former Delta and Lufthansa executive, to get Virgin America off the ground. Virgin America's first flight finally took off in August 2007.

Then, in early 2009, the Alaska Air Group Inc., which operates Alaska Airlines, similarly charged that Virgin America was not U.S.-owned and controlled. After renewed deliberation, DOT ruled last week that it is, while prompting several changes in the stakes of investors and the appointment of the airline's current CEO, former American Airlines executive David Cush, to the board of directors. This expands the board to nine members from eight, with seven of the directors being U.S. citizens.

As if all that wasn't enough, U.S. aviation legend Chuck Yeager, the former aircraft-test pilot - a main figure in Tom Wolfe's book "The Right Stuff'' and the 1980s movie adaptation of the same title - has sued Virgin America. Yeager claims the airline used his name "maliciously, oppressively and fraudulently,'' in promotional material, according to Andrew S. Ross's The Bottom Line column in the Jan. 8 business section of the San Francisco Chronicle. Virgin America, according to the Chronicle, praised Yeager in passing in an e-mail sent to its frequent fliers to ballyhoo on-board Wi-Fi, which it has pioneered among U.S. airlines.

"Not unlike Buzz Aldrin or Chuck Yeager, you have the opportunity to be part of a monumental moment in air travel,'' the e-mail reads, as quoted in Ross's reporting. Yeager says the airline didn't ask permission to use his name, and is asking for "the revenue and profits'' derived from its use, as well as "exemplary and punitive charges.'' The Chronicle's headline on the column: "Yeager's Suit - the Wrong Stuff.''

Jeesh.

Virgin America might prefer the exposure it will be getting on a new reality TV show, "Fly Girls,'' premiering on the CW network. "Fly Girls'' follows five young, not-average-looking female flight attendants who fly a lot and party a lot. The FAs work for Virgin America. That should be a boost to brand awareness.

As for Branson and foreign ownership, I can only say this: Most countries, convulsed by national security fears and worried about potential job losses, limit foreign ownership and control of their airlines. But, why? Business is global now, and the airline business is the main mode of transport for global commerce, especially travel and tourism. As much as any industry, civil aviation makes business more international than it's ever been. (I'll revisit this subject, and argue that such ownership rules are outdated and mercantilist, in another post.)

The British? Speaking as an American, I daresay the Brits haven't harmed the United States since they burned the White House during the War of 1812. You'd think we'd be over it by now. They're mainly a good lot. Of course, the British did give us Slade, Princess Di and Madonna faking a lady-of-the-manor English accent, so maybe it's OK to fear them after all. Probably not in aviation, though.

Virgin America, which flies to 10 U.S. cities and has ambitions to fly to 50, deserves a break. It's a good airline, a leader in in-flight technology, and a spur to much-needed competition in the U.S. domestic market. Allowing the airline to operate on that level playing field that everyone keeps nattering on about wouldn't be such bad thing.