PHLDividends

Apparently Virgin America is going to try to make a go of it in Philly. It will be interesting to see what effect this has on US fares.

Jan 17, 2012 (The Philadelphia Inquirer - McClatchy-Tribune Information
Services via COMTEX) -- Low-cost carrier Virgin America will start flying to
Philadelphia from California this spring, offering competition to US Airways
Group Inc. on flights to Los Angeles and San Francisco.

Virgin, a privately-owned carrier which is 25 percent owned by English
billionaire Richard Branson, will offer three daily round-trip flights from Los
Angeles, starting April 4, and two daily round-trip flights from San Francisco,
starting April 10.

Starting at noon today, the San Francisco-based airline is offering introductory
one-way fares of $129 between Philadelphia and Los Angeles, and $149 one-way
fares between Philadelphia and San Francisco, excluding taxes and fees.

"When more airlines compete, consumers win -- with lower fares and better
service," said Virgin America president and CEO David Cush. "Travelers deserve
more options than just the typical legacy airline cattle car, and we hope our
unique brand of low fares and inventive service will be a breath of fresh air
for Philadelphians."

Cush said the Philadelphia market has "strong business and leisure travel
connections to California -- and we thank both Mayor Nutter and Philadelphia
International Airport for welcoming our new service."

When entering markets that offer little low-fare competition, Cush said, Virgin
America has historically seen fares drop by up to one-third.

In addition, 50 percent of travelers flying from Philadelphia to the Los Angeles
market now use connecting flights and 45 percent of those traveling from
Philadelphia to the San Francisco Bay Area are connecting passengers, he said.

Virgin America portrays itself as a hip, high-tech airline, offering such
amenities as touchscreen entertainment systems, wireless Internet cabins, and
soft mood lighting.

The San Francisco-based airline was started in 2007.

Branson, who in 1972 opened a chain of record stores, Virgin Records, and
expanded the Virgin brand in the 1980s to include Virgin Atlantic Airways that
flies internationally, holds 25 percent of the voting stock, with U.S. investors
holding 75 percent. Virgin America serves 16 airports in the U.S. and Mexico.

"This is a great development for the entire Philadelphia region, including
northern Delaware, southern New Jersey and Southeastern Pennsylvania," said
Philadelphia Mayor Michael A. Nutter. "New airline service not only lowers fares
for travelers, but it is also a major economic driver -- stimulating business
travel, tourism and local job growth. Virgin America's new flights also validate
the strong and growing business travel link between our region's
innovation-based sectors and those on the West Coast."

Contact staff writer Linda Loyd at 215-854-2831 or [email protected].

javacodeguy

Now I need to start looking if US will be matching these new routes.

I would love a $300 RT from PHL-SFO.

Anyone think this will be getting matched by US to LAX or SFO?

BoeingBoy

Depending on how long the introductory fares last, US may not match them - even VX probably can't make a profit at ~6 cents/mile with $3+ per gallon fuel.

Also keep in mind that if VX isn't able to make a go of these routes, they will pull out and it's bye-bye lower fares. So it boils down to whether you want all the perks US offers you at low fares for 6-9 months or want to throw some business VX's way so lower fares will last.

Jim

sdsearch

When VX introduced LAX-DFW and SFO-DFW (and again after it increased service), AA offered not just price matching but also double EQM promos on those routes. When VX introduced LAX-ORD and SFO-ORD (and again after it increased service), AA and UA both offered not just price mathing but also double EQM promos on those routes.

Obviously, this was the case because DFW is an AA hub and ORD is both an AA and UA hub.

So is possible that US could similary do a double EQM offer on these routes (to keep its elites from evaluating the competition)?

Btw, how does VX's frequency compare to US's frequency on these routes? (Even after the increased service, VX's frequency on the above routes is still a fraction of the service on the respective dominant legacies on those routes.)

PHLDividends

Excellent points. I am going to strongly suggest that my colleagues take a VX flight every once in a while. That will do two things - (1) help VX stay in the market, and (2) keep more upgrade space available for me.

steve65341

The $300 is before taxes and fees so it's probably closer to $350 all in. I flew US PHL-SFO last week for $385 all in so the fares aren't that earth shattering.

DCdeacon

US generally has between four and six flights/day between PHL-LAX, depending on the day of the week and the time of year. PHL-SFO always seems to be slightly less than that, in my experience...I've generally seen it at three or four flights/day, again, depending on day and time of year.

So actually, Virgin's frequencies aren't that much less than normal US service...it's certainly not the same type of situation that we saw when VX entered the LAX-DFW market, for example, where they fly 3x daily vs. about 15 for AA...same on the SFO-ORD route.

Dreamworks

Having flown VX in the past, there is no comparison between the in-flight experience. So they will lose some people that way, especially the younger crowd. but clearly US will still have all the connecting traffic from the Northeast. I wonder how much of connections makes up their loads.

VX also is having problems with their reservation system, though I'm not sure if they resolved that.

SFO777

Starting in 3-2-1...

perseus11

Actually one needs to add the daily UA PHL-LAX (eff April 1), DL PHL-LAX and 2x Daily UA PHL-SFO non-stops to get the whole picture. That's a fair amount competition for a true intercontinental route. IMO, VX needs to hard sell their signficant in-flight service advantage in order to pull the UA, DL and US FFs away - but -it seems to be working in the other top 5 markets - so far. It'd be interesting to see the result of a 1x daily PIT-LAX/SFO VX route.

3Cforme

There are already $329 DL non-stops PHL-LAX-PHL. If fares go lower - and stay lower- than that for very long, some capacity will get dropped.

Phudnik

I expect DL will drop PHL-LAX shortly after VX adds it. I wonder whether the daily UA PHL-LAX will come back (though as a UA/CO flyer I hope it does).

I'm sure they'll grab a fair amount of point-to-point leisure traffic, but will they get the higher fares that they will need? I would think that barriers to capturing business traffic from US -- with its interline agreements in case things go , upgrades, and relative lack of fees for frequent travelers -- will be pretty significant.

Fanjet

Wasn't WN flying LAX-PHL nonstop for a short while in the past? VX may do well in capturing some of the O&D traffic, but US will probably fill those "lost" seats with connecting traffic. And VX's FF program is probably the complete opposite of what the typical US elite member desires in a FF program (particularly the higher elites): i.e. no free upgrades.

perseus11

Unfortunately, the bigger negative for me is that you can't even use Points (Elevate) for international travel on their 2 partners (Virgin Atlantic and Virgin Australia). I'm not certain if this was a provision to enable them to acquire their license or not. I vaguely remember it was and had something to do with eliminating any appearance of excess foreign ownership. Even if VAtl had a reciprical agreement, PHL O&Ds would need to schlep to EWR or JFK to take advantage of their LHR route. Now if US merges with AA and dehubs PHL, Virgin should shine - at least for domestic travel. But of course one never knows what the DL gorilla would do in that case, or any other domestic or international carrier.

PHL

It's actually TRANScontinental or INTRAcontinental. I don't think WN had many frequencies, which probably hurt them. What flights at LAX or SFO can VX feed from PHL? I don't think Virgin Atlantic goes anywhere from those cities other than London, do that's not of much help.

Next question...what PHL terminal/gates will be used?