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Cheap Frills

By Stephanie Overby

November 01, 2006 — CIO — How many high-profile CIOs can say they got their job through a free ad on Craigslist? Probably not that many. But that’s exactly how Bill Maguire became vice president and CIO of Virgin America.

Which makes sense. Like any startup, Virgin America must do a lot with a little, including fishing for IT talent in Craigslist’s free pool. That said, Virgin’s resources—$177.3 million in funding and a license to use the Virgin brand name, purchased from investor Richard Branson’s Virgin Management Ltd.—are a bit bigger than Craig Newmark’s were when he began his eponymous community forum a decade ago.

But, again like Craigslist, the upside is big. Virgin America’s plan is to create a new kind of low-cost carrier. Its fares will be in line with the sub-$300 cross-country round-trips offered by the JetBlues of the industry, but it intends to deliver a customer experience more along the lines of Singapore Air, the first to offer such perks as in-flight high-speed Internet service.

Virgin America executives say they want their airline to embody the next step in the evolution of bargain flying.

They’re a bit closed-mouthed about many of the details of what exactly that means, at least until they start selling seats early next year. But they have revealed the plans for their first route (San Francisco International to New York’s JFK), their fleet (34 brand-new, fuel-efficient Airbus A320s) and certain in-flight amenities (like seats built by Italian race car seat maker Recaro with thin backs to provide more legroom). They plan to create a simplified fare structure with just a handful of price points that consumers will understand, and they hope to sell 70 percent or more of their tickets through the Web.

And their IT strategy will be, of course, lean and mean.

The Virgin Vision: IT Is Key

Virgin America knows its ability to offer those differentiating amenities to a price-conscious public will depend in great part upon keeping IT costs low. Maguire, whose background features a flair for squeezing nickels until they beg for mercy, will have at his disposal a generation of technology that was not available even as recently as JetBlue’s 2001 launch. (See “The Virgin Tech Stack,” Page 70.) He plans to deploy a mix of lower-cost (and in some cases no-cost), efficient and agile systems to create the foundation for Virgin’s “low-cost, high value” business proposition.

 

 

 

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