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Airlines

At the leading edge

David Cush was born and raised in Shreveport, Louisiana. He has a BA in Broadcast/Film, a BSc in Psychology and a Master’s degree in Business Administration.
 

With over 22 years of management experience at some of the world’s biggest airlines, David Cush was appointed president and chief executive officer of Virgin America on 10 December 2007. Since then, Virgin America has experienced record-setting growth and has won all the major, reader-based, travel industry best-in-class awards, including ‘Best Domestic Airline’ at both Travel and Leisure’s World’s Best Awards and Condé Nast Traveller’s Readers’ Choice Awards. Cush was named one of the Bay Area’s ‘Most Admired CEOs’ by the San Francisco Business Times in 2009.

 

Which other airline chief executive officers do you admire and why?

When I was getting started in the industry, Bob Crandall, the chief executive officer of American Airlines, was an important early influence for me. His impact on the industry is unmatched. Under his leadership, American invented the computer reservation systems that the industry relies on today, as well as implementing modern revenue management and the first frequent-flyer loyalty programme.

 

What are some of the key challenges facing the low-fare airline industry in the US?

There has been a significant reduction in the number of US domestic airlines as a result of industry consolidation and the mergers between Delta and Northwest, United and Continental, and most recently American and US Airways. These merged carriers operate enormous route networks. While travellers benefit from more flights in hub cities, there is often a lack of competition at hub airports, which results in higher fares paid by consumers. As the industry consolidates, regulators need to ensure there are opportunities for new entrants to compete in these markets, since there are enormous consumer benefits to be gained from new services by low-cost airlines in hub markets. Firstly, regulators should take steps to ensure that low-fare carriers can gain access into critical hub airports. While there have been access rules in the past to ensure that low-fare carriers could obtain a reasonable number of slots, these regulations have now expired and most slots today are controlled by the ‘Big Three’ merged airlines. Secondly, new entry into the airline business has virtually stopped due to the anti-competitive practices of these airlines. While regulators have intervened in the past to address the competitive practices of these large network airlines on hub routes, there has been little attention paid to this issue in recent years. This has emboldened the network carriers and encouraged the adoption of brutal tactics that are designed to prevent new entrants from gaining a foothold into hub airports. If competition authorities are unable or unwilling to address this issue, there will be little hope for competitive services at the fortress hubs of the legacy carriers.

 

There is a growing movement among some low-fare and hybrid carriers to generate more revenue from business travel. How much emphasis are you putting on this?

Business travellers are important guests for us from a revenue standpoint – they travel frequently, they often book close to their travel date and they tend to become loyal, repeat guests. Our migration to Sabre was justified, based on the more powerful distribution capabilities that it gave us with corporate travel agencies. From a product standpoint, having wifi on every flight and power outlets under every seat helps business guests stay connected and productive even at 35,000 feet. But we didn’t stop there; in 2012 we significantly enhanced our business traveller offering with the introduction of tiered status levels within Elevate, our frequent-flyer programme. And in 2013, we’ve added a number of key business travel markets to our network, including Newark Liberty International Airport, Mineta San Jose International Airport and Austin-Bergstrom International Airport.

 

Virgin America introduced three daily flights between Los Angeles and Las Vegas earlier this year. What opportunities do you see on this new route?

We already knew the market pretty well, because we already flew between San Francisco and Las Vegas, and that has been a very popular route. We launched a new Los Angeles-Las Vegas service in April 2013 and our amenities – we have mood lighting, custom-designed leather seats and touch-screen entertainment at every seat – are quickly finding a following. The new ‘ride’ is a stylish, welcome alternative to the current options in the market. >>


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