Richard Branson is doing it again. He’s shaking up an industry. The airline industry. And according to millions of airline passengers, its about time.

By Lisa Steinkamp

Airline Industry Gets Virgin-ized

Call it brand personality or just clever marketing, either way Virgin America has seemingly hit a hot-button for air travel customers with its August 2007 launch: the innovative new airline brought an array of new features, low prices, and hip-ness to an industry that has become stagnant, even demoralized.

It’s what the Virgin Group does so well reinvent existing industries that are struggling, or have simply become stale. Its no secret that billionaire Brit Sir Richard Branson, the man behind the Virgin Empire and its 200 + businesses (ranging from cell phones and music to credit cards and space travel), has a knack for shaking things up.

Everyone knows the quality of service of the big carriers in America has always been rather sad, Branson said after a news conference in San Francisco (the city is Virgin Americas hub in the U.S).

U.S. Loves Virgin

The early verdict on the new Virgin? America has fallen in love.

• Initial $88-round trip fares from San Francisco to Los Angeles: big hit
• Similar deals from hub to NY, DC, and Las Vegas are packing Virgins planes
• Branson predicted profits in 5-years; now says it will be much quicker than that.

The Fun Stuff

Virgin America is all about price, and, amenities: in addition to Branson’s own irreverent and upbeat personality which infuses all his ventures with a spirit of fun, theres the cool factor. This includes that quirky yet soothing mood lighting that everyones talking about, and some solid, practical features that everyone can appreciate:

• PLUGS: Laptop power-plugs, USB ports at each seat, internet access next year
• INDIVIDUAL SCREENS: An entertainment system called Red, complete with live satellite TV, pay-per-view movies, over 3,000 MP3s, games, and an on board chat feature that lets you talk to other passengers
• FOOD ON DEMAND: An on-screen menu; you order, they deliver
• GREAT SEATS: Comfortable leather seats with generous pitch

Whats it all add up to? Well, one reviewer has likened the Virgin America experience to “A multi-million dollar iPod. That flies.”

Can the Other Guys Compete?

Well, lets see: fellow discount airline and Virgin rival jetBlue may offer comfortable seats and TV monitors, but it seems to be outmatched by Virgin America’s overall passenger experience and style. Another Virgin rival, Southwest, falls even further behind with no entertainment features at all, relying instead solely on its discount prices to draw in travelers. Is this enough, against Virgin? We shall see.

Airfare War? No. Skirmish? Yes.

Skirmish is how FareCompare CEO Rick Seaney sees it. Yes, prices for fares, especially transcontinental travel, have become more competitive since Virgin Americas launch, and a Southwest spokesman said, they are still very much in the game: Well keep a very close eye on them and compete vigorously. For the most part, you’ll find our fares are very competitive, if not, in fact, lower.

Crystal Ball Time

It remains to be seen how long Virgin America can maintain their low pricing, while offering all those great amenities, and still be profitable. Lets hope they hold out at least until we book next summers vacation.

But, even if fares do begin to rise, Virgin America has shed some mood lighting on the bleak situation of customer service and amenities in the industry. One can only hope that Virgin Americas reinventing of the air travel experience will serve as a wake-up call of sorts, to other U.S. carriers.