David Cush
Four months after its inaugural flight, Virgin America is getting a new CEO. The San Francisco-based airline--which now also operates to New York, Los Angeles, Las Vegas and Washington--is targeting 30 airport stations by 2012. To get there and possibly beyond, the carrier plucked the top sales executive from one of the market's largest competitors. C. David Cush, former American Airlines senior vice president of global sales, takes the reins on Dec. 10. He succeeds Fred Reid--the carrier's first CEO, who was required to leave as part of the Department of Transportation's certification process--and joins former AA CEO Don Carty, currently Virgin America's chairman. The airline has entered the fray with new Airbus A320 aircraft, such inflight extras as power outlets, a globally recognized brand, distribution deals with Galileo and Sabre, and intentions of "bringing a little fun back to flying." Its new leader brings more than two decades of air industry experience covering finance, sales and marketing, customer service and operations. Cush took time from his "farewell tour of Dallas" this week to speak with Management.travel.
Why leave an industry leader for a start-up carrier?
It is a unique opportunity. American is a great, powerful, multinational company. I had a very powerful position there. I did not take leaving lightly. At the same time, there are only a few chances in life to get into a company on the ground floor, one that very much has a focus on creating a different customer experience. And one that starts up out of the gate with very strong brand cachet. The opportunity was so unique that it pulled me away from something that I was very happy doing, and from a company that I have very high regard for.
Some would say the domestic airline market already has too many players, and all business models--from the legacy network airlines to low-cost operators and hybrids in between--already are represented. How do you describe the Virgin America value proposition?
The value proposition will be a very strong focus--almost a maniacal focus--on the customer. When I talked to the board and to management, that is where their head is. They are very focused on creating a different customer experience and it is up to the market to decide if there are too many airlines and too many seats. There are a couple of opinions in my head. First, you do have the legacy carriers shrinking capacity quite a bit in a market that still has significant demand growth. And secondly, you do have customers that are dissatisfied. In general, the American public is not happy with the service they are receiving and therefore our goal is to go in and meet some of the product and service demands that they have. If we do that, we'll be successful.
How do travel agencies and corporate clients fit into the Virgin America model?
My view at American was that between some of the reductions in global distribution system fees and other things, the travel agencies had become a very cost-competitive way of distributing the product. I'll have to get into Virgin America to see if that really makes sense for us. My initial view is that there is a very large, unmanaged business market out there that I think we will be able to crack. These will be independent and small- and medium-size businesses. They buy a product because they want to buy it, not because their corporate purchasing department mandates that they buy it. That will be the first place we put our focus. As far as getting into managed corporate ... given the initial size of the company, my feeling is that will be something well down the road if it fits into our plans.
To what degree have you considered domestic or international partners?
I haven't really gotten into that level of detail. I will say that one thing I will be very focused on is making sure we don't build up levels of complexity that will impact our ability to operate our core product--which is point-to-point service--reliably and at a low cost. Partnerships sound great, and certainly the revenue side of that is always alluring, but I will have a singular focus to make sure we do not sacrifice the simplicity of the business model and our low costs in order to chase after partnership revenue.
What are the key lessons you learned at AA that you bring to this new venture?
Obviously I have been schooled very well at American, and have had a broad career there, working for some of the smartest guys in the industry. There are a couple of things that I will walk in the door with. One is that the key to this business is happy employees who enjoy what they are doing and are very focused on the customer. Mission one is to maintain what Virgin America has already built with that culture. The second thing, which is certainly part of my American pedigree, is that I have always believed, to a certain extent, that you manage to numbers. You measure what is important and drive to excellence in those measurements--whether that is on-time dependability, baggage or any other type of quality ratings. Numbers, in general, do not lie. If it is important enough to measure, it is important enough to be excellent in.