Jaunted Interview: Chatting with David Cush
5/13/2008 at 10:30 AM
Tags: Virgin America, LCCs, Low Cost Carriers, New Routes, ORD, David Cush, Jaunted Interviews (all tags)
A Jaunted Exclusive
Virgin America will ask the FAA for a share of the Chicago market this week, and if all goes well, VA will be flying to O'Hare by November.
After Virgin confirmed the expansion plans, we were excited to talk with CEO David Cush, posing here with Cisco Adler, about the future of the airline, how the FAA allocates landing rights and what it's like to compete with a former employer.
Jaunted: We've been hearing rumors about Chicago for months. Why make the move into that new market now?
DC: You're not an airline until you fly to Chicago. We want to fly four flights a day from LAX and SFO to ORD because this is third largest travel market in the US and we think Chicagoans are going to love our product.
Currently, Chicago/O'Hare has virtually no low-fare competition to the West Coast and none from SFO or LAX. We think we can compete with the big guys and inject a little healthy competition into a market that desperately needs it.
Jaunted: Does the recent $100 million you got from investors have anything to do with the timing?
DC: No. Chicago and the additional capital were both part of our original business plan. In the airline business, you have incredibly high launch overhead, so our investors and board are well aware of this and comfortable with the outlook.
Jaunted: What happens if work on ORD's new foul weather runway is delayed? How would that affect your entry into the Chicago market?
DC: It is hard to say what the impact would be. But [Richard M. Daley] is a mayor and [this is] an airport that have fought long and hard to make the investments needed to accommodate travelers at ORD, so a delay doesn't seem likely. They have assured us that everything is on schedule, and we are planning accordingly.
Jaunted: Tell us more about the application process for the eight slots you're requesting. How does that work? Surely you don't just call up the FAA ask for them, right?
DC: Other than having the FAA on speed dial? No, we actually are filing with the Federal Aviation Administration to serve ORD under the existing demand management rules at the airport. The FAA actually issued a directive to all carriers asking them to share their intentions with respect to O’Hare. So, in the name of sharing, we told them that we want to fly to O’Hare eight times a day, we want to provide a service that the incumbants--American and United--could only dream about providing and we want the guests on our flights to Chicago to be the happiest people in the air.
The FAA will make the decision based on what would best serve travelers in the market, and the agency's own rules state that new entrant airlines will get first crack at each of the first two flights per hour that are created with the new capacity. With legacy airlines representing 99 percent of the domestic departures at O’Hare (I swear, the number is really 99 percent--we are not making this up), and low-cost airlines only representing 1 percent, we think we have a very good case.
Jaunted: We talked to your predecessor Fred Reid about airport congestion and flight caps back in December 2007. He filled us in on the situation at JFK and proposed DOT flight caps there. How is the situation at ORD different and how is it similar to what's happening at other airports?
DC: O’Hare is a different situation. The airport is under demand management rules, but the outlook for capacity is a lot better--especially with the city’s strategic investment in a new runway. In addition, with all the bankruptcies and looming mergers, the larger carriers may start pulling down capacity and cutting some of their inefficient regional jet service. Because of that, there is just a lot more space for us.
And, in fact, one of the frustrations with JFK is that since April--when we were denied additional slots--at least two carriers have declared bankruptcies and are no longer operating their slots. Unfortunately, there is no mechanism for reallocating those back to Virgin America.
Jaunted: You spent a long time working at American Airlines. What's it like to be directly competing with your former employer?
DC: It is interesting to see both sides of the story. American is an incredible airline and they do an amazing job at getting a truly staggering number of people to the places they need to go all over the world. But the opportunity to help start something new and launch a product that is truly world-class and that is changing how people fly is something that comes along once in a lifetime.
But in all honesty, what we’re doing at Virgin America is so new and because our service, business model and companies are so different it doesn’t feel like we are competing head-to-head. We’ve got 18 aircraft and American has hundreds of planes. And in some ways it is really nice to be the underdog--the little airline that could.
Our business model is very focused and nimble, and we’ve got planes that are 30 percent more fuel efficient so we can be creative, opportunistic and not locked into a certain way of doing things. You can focus with less distraction on delivering the best possible experience for guests. Those things are not so easy when you are that big.
Related Stories:
· Virgin America Hopes to Start Chicago Service [Jaunted]
· Virgin America coverage [Jaunted]
· Jaunted Interviews coverage [Jaunted]
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