Virgin America's Main Cabin Select Capitalizes on Corporate Contracts

I had the chance to sit down (or, uh, actually stand up) with Virgin America CEO David Cush yesterday, and we spoke about a variety of topics. (Full transcript at The Cranky Flier.) One thing stood out as being very positive for the airline, and that's the performance of Main Cabin Select. This could be an opportunity for other airlines that they're missing out on.

Main Cabin Select is effectively Virgin America's First Class without the seat. You get to sit in the bulkhead or exit row with extra legroom, but it's just a regular coach seat. You do, however, get the first class perks of free food, priority lines, etc. When it first came out, the idea seemed fine, but the pricing seemed absurdly high.

Looking at a random Wednesday in March, the lowest coach fare is $209 each way, but Main Cabin Select is more than double at $484. That's actually lower than what I had seen in the past, but for me, it's still too high for what is effectively just extra legroom, especially when you can get that on JetBlue for $20 or $30 more. It's a better spread at the last minute, today it would cost you $524 to buy a walkup in coach but $679 in Main Cabin Select. Still, most people would expect that this program wouldn't do very well.

Imagine my surprise when David Cush said that it is, in fact, selling quite well. On top of that, 60 percent of the seats they sell there are not upgrades, and the average fare in the cabin overall is double that of coach. So where the heck is all this coming from? According to Cush, corporate contracts that require people to fly in coach do allow tickets purchased in Main Cabin Select to qualify. Ah, now I get it.

Airlines have tried this in the past. They would slap a "YUP" fare basis on a First Class ticket so that it appeared to be a coach fare when in fact it was booked right into First Class. I've heard that those have been cracked down upon, but apparently they haven't gotten to the enhanced coach product yet. If that's the case, then you'd think other airlines could be trying this as well. United would be the most obvious choice since they already have an Economy Plus cabin that they sell for a lot less of a premium, but most of United's corporate contract travelers get auto-upgraded into Economy Plus anyway. Those legacy carriers sure get addicted to those auto-upgrades.

So, if everything they say is true, Virgin America has stumbled onto a nice little revenue boost here. There aren't very many seats in this section, so it's not going to save the airline by any means, but it does get them more revenue than they would have had otherwise. If these numbers are true, other airlines might want to take note.