Virgin Atlantic’s decision to divide its economy product into three tiers two years ago has been paying dividends, EVP-commercial Juha Jarvinen said.

The UK-based carrier now offers economy light, the lowest fare with hand baggage only; classic economy, with one checked bag; and economy delight, which adds more legroom and priority boarding. Premium and upper-class products are also available.   

“Since doing that and since we have the same class mix, we actually grew incremental revenue by £27 million [$34 million] since the launch in March 2018,” Jarvinen told ATW on the sidelines of the Future Travel Experience conference in Istanbul.

The airline has seen incremental revenue from passengers buying more bags or upgrading to economy delight, he said.

The economy light offering was an effort to better compete with LCCs like Norwegian, and often exceeds passengers’ expectations, Jarvinen said.

“We offer competitive pricing against them, but when passengers fly with us, they realize they receive other things for free,” he said, such as meals, which are included in all three economy fares.

Crew training was an important part of the move, Jarvinen said. Cabin crews now sell upgrades onboard, for example.

“This has been a big change for the crew,” he said.

The competition from LCCs has forced legacy carriers to rethink how they operate, Jarvinen said.

“Which is a good thing,” he said. “The next step for us is the data insight. How we do leverage the data we already have from our passengers?”

Airlines often do not know how to use that data, which may be stored in different systems.

“Now we need to be able to get the data together to be more relevant to the consumer,” Jarvinen said, by better publicizing and personalizing its offerings. “Quite often people are just not aware—they don't know the product. That is the problem many airlines face.”

“We have to make sure that we are relevant, and we believe with the five products Virgin has, we have a good base,” he added.

Kurt Hofmann, hofmann.aviation@netway.at