After two years of dwindling profitability, however, the company appointed a new CEO, former American Airlines executive Craig Keeger, earlier this year.
While he pledged to drive cost savings from the business, Keeger promised to keep Virgin Atlantic’s identity as an innovative, even fun airline in tact. “My focus is to ensure the things we’re investing in are the things that drive the hipness, coolness and customer experience that define Virgin,” Keeger told Reuters earlier this year.
It was perhaps this identity that led Virgin Atlantic to appoint David Bulman as its IT director back in November 2011.
Bulman’s roots lie in media and advertising. He was digital director News International (now News UK) when it relaunched both The Sun and The Times websites, before joining digital communications conglomerate Aegis Media as CIO.
This experience has served Bulman well at Virgin Atlantic, where – as he explains below – he has restructured the company’s digital capability around an Agile methodology to make sure its web and mobile presence is in keeping with the state of the art.
But there is more conventional IT work to be done too. Bulman is currently in the process of redesigning Virgin Atlantic’s enterprise data model, assessing which of its business applications are still fit for purpose, and rationalizing its IT sourcing model.
Information Age: What are your strategic objectives as IT director at Virgin Atlantic?
David Bulman: Virgin Atlantic still feels like a young airline but we'll have been around for 30 years next year. In that time you build up a lot of legacy. We've got a very strong operating environment to run the business day-by-day, but now we're looking at the whole environment and asking how we could do it all cleaner, cheaper, and more efficiently. We're taking an enterprise-wide view, and asking how we can move our IT environment into a more modern, slicker form.
So we're looking at three broad areas. The first of these is data and information: we've got pots of data all over the place so how can we pull all of that together? Secondly, we have a clear digital remit: Virgin Atlantic has been an innovator in the digital space – we were one of the first airlines to release a mobile app, for example – but some of our technical advancements were starting to get a little dated.
And thirdly, we are looking at our back-office functions and asking how we can improve our operational efficiency.
Data and information
What is driving the data and information component of your IT strategy?
When I joined Virgin Atlantic 18 months ago, we built a technical map of our information architecture as it was then – how many data marts did we have, how many different reporting functions? And it was a lot.
Now, the business was operating very well, so our information architecture was certainly functional. The operations team would have the data they needed to make decisions about flights; the crew management team had the information they needed to make crewing and rostering decisions.
But it wasn't very joined up. And when you to look at what the leading lights in the airline business are doing, you see that it's when you join all that information that you start to get to really interesting insights. This means you can plan differently, operate differently and really become much more efficient.
What are you doing to resolve that?
We're looking at it from a number of different angles. Some very big brains, both internally and at some of our partners, are looking into what an enterprise data model for an airline should look like. There are some good ones out there on the market already, so we may build one ourselves or just buy one in.
As far as implementing it is concerned, we've got a new CEO, who started three months ago. He's bringing in some new strategic thinking about how the company needs to operate, so we're building a roadmap around the information that senior management is going to need. So we haven't quite implemented yet, but we've done a lot of the design work.
"You don’t need to do huge projects to see whether something will work. You can start small and test it with a few people"
What makes you say Virgin Atlantic's digital offerings were becoming dated?
If you look at our mobile app and parts of our website today, they don't feel modern. Because we were an early adopter, I think we probably got complacent. We got something out there that was very well received at the time, but then we sat back and the focus moved on to other things, so the technical capability stayed were it was.
Last year, we began a major investment programme in our digital space. If you look at the Virgin Atlantic website right now, the front page looks great. If you start to get a little bit deeper into it, you start to get into some of the older parts of the website.
How can you make sure your digital presence stays up to date?
We've adopted an Agile methodology, and we're refreshing our entire estate in an Agile fashion. We've started with the home page and we're drilling down into all the other pieces of functionality and changing it component by component, and we've put in new software testing techniques that are appropriate to Agile.
How are you measuring the success of your digital strategy?
Sales metrics, quite simply. We know that since we introduced new flight search functionality, for example, our average price per booking has increased. That means that we're getting the right products across that our customers want to buy. We've also seen some shift in the volume of bookings on the web versus our contact centre.
How do you plan to improve the operational efficiency of the organisation?
We've been looking at some of our core systems and asking which ones we really need to change. For example, we've just agreed that we're going to be putting in a new loyalty system. We're taking a cold hard look at our reservation platform and deciding whether it's fit for purpose and we're about to formally go out to the market to see what the alternatives are.
And what about the efficiency of the IT department?
Right now, because our new CEO thinks technology is key to our success as a business, my budgets overall have remained stable. But I absolutely have a challenge to reduce my operational cost to free up more money for investment.
We have a heavily outsourced model in IT, which suits us because it allows us to be flexible. We've got three key partnerships: CSC hosts all of our hardware, [air industry specialist] SITA does all of our telecommunications, and TCS provides our helpdesk all the way down to third tier applications support.
So I'm looking at my environment of suppliers, how effective are we, can we make changes, can we contract differently, and how I can work with my supplier base to drive down my costs.
What other changes you have introduced since joining Virgin Atlantic?
One thing I've introduced is the idea of very small proofs-of-concept, which help us find out very quickly whether something is going to be effective or not. You don’t need to do huge projects to see whether something will work – you can start small and test it with a few people.
So, for example, we just completed a proof-of-concept around putting iPads into the flight. It's been great – it allowed us to prove what the cost savings are, how difficult it is, and what the issues that we need to resolve are.
Another thing we’re looking at, which a lot of other airlines haven’t yet, is giving handheld devices to our turnaround co-ordinators, the people who make sure the plan is refueled, the baggage is dealt with and everything elsle.
These guys would have to run down underneath plane to talk to the guy with the fuel, then up to a computer system to plug in some numbers, and then up to the cockpit and back the computer, and so on.
Now, we've moved them on to a handheld device that allows them to communicate with all the different systems they need to use. And I think that’s a vital part of why we’ve got one of the best ‘on time’ performances at Heathrow right now.
So that was one relatively small project, but it is reaping really big benefits.
The airline of the future
Where do you see the airline business in five years’ time?
That’s an interesting question. It used to be that our customers would walk into a travel agent and walk out with a few slips of paper. Now, we can keep in constant contact with them from the moment the buy a ticket, we can upsell to them, offer different products, and use technology to make their experience in the airport as stress-free as possible. We're moving into an age where the product starts to stretch even further beyond that.
We’re also thinking about innovation in flight entertainment. We were the first airline to provide on-demand video in an aeroplane, and we're thinking about what the next stage of that is. How do we start delivering entertainment to people's own devices? How do we give them access to 1,000 movies instead of 50?
When we look at what an airline is going to be in 5 years' time, or 10 years' time, we’re thinking about how we will use technology to make the customer experience as interesting and engaging as possible from the point of ticket to the point of destination.