SFO777

http://www.virginamerica.com/vx/philadelphia

adamj023

I see Virgin added Philadelphia to its competing routes. Nice.

Another destination for Virgin.

adamj023

Yup. I see that. Philadelphia is a nice airport though for Virgin.

Looks like they are looking for more Airports to feed to SFO + LAX right now in their route structure building out the West coast hub, then I bet they come back and build out the east coast as well.

N830MH

And there is more specific route is PDX, SLC, IAH, MSY, CVG, JAX, ATL, PHX, ABQ, RNO, GEG, EUG, BOI, TUS, YUM, ELP, LBB, COS, DEN, MKE, GRB, PIA, BMI, MLI, STL, MCI, ICT, OMA, LNK, BIL, RDU, GSO, RIC, PHF, ORF, BWI, IND, FAY, BHM, BNA, MEM, TYS, TRI, CID, FAR. FSD. CMH, CLE, DTW, GRR, FNT, AZO, OKC, TUL, MNK, BTV, MHT, PWM, BGR, BDL, PVD, ORH, ALB, BUF, SYR, ROC, PLG, SHV, BLI, EWR, PIT, ERI, PSC, DSM, MSN, PNS, ECP, VPS, TLH, RSW, TPA, SRQ.

That will buildup to bring more specific new routes sometime in a distant the future. Can VX will have beef up to bring more new city to be announced.

How about VX can order a small regional jet? Can they have CRJ900 or CRJ1000 or E75 or E95?

adamj023

Were those routes based on speculation or do you know those will be added for VX?

I don't know all the codes offhand but did a quick glance and saw some would be good additions.

Carriers like Virgin will never go CRJ as a non legacy. Embraer has been hit or miss but I don't see Virgin in any position to do those at this time. Perhaps later on if the market conditions were ripe they could think about it but right now they will be focusing on their other routes so even if Virgin ever did decide to do a E, it would be years away since there is still loads of big markets to do. So I just don't see any Embraers for them except a slim chance later down the road as they expand their routes significantly with the Airbus fleet. CRJs definitely not. Not a chance.

volvo99

Less a hub and more about building traffic to high yield transcon city pairs. LAX/SFO are poorly positioned for a domestic hub; great fro going to Asia/Pacific.

It looks like EWR may be a long time coming; a dearth of available slots and the "market rate" just too high.

volvo99

You can toss out 3/4 of the airports there; unless VX takes over an unused pier in Cincinnati, Kansas City, or St. Louis. I'm wondering what they see in PHL; it is a US/Star Alliance fortress hub; WN has scaled back, it has a poor runway layout and proximity to DC/NY creates ATC issues, and PHL has traffic siphoned off from ACY-Atlantic City being a Spirit stronghold.

rittenhousesq

Virgin CEO is quoted in today's Philadelphia Inquirer (sorry can't find the link as the paper is no longer available online for non-subscribers) as saying: "In Philadelphia we saw two things that were particularly attractive." "One was high ticket prices......second, about half the travelers going between Philadelphia and San Francisco and Los Angeles fly nonstop. The other half connect though other cities.......that tells us that it is an underserved market. People are connecting because there are not enough nonstop flights on the route."

FWAAA

Or it could mean that about half of the passengers between PHL and LAX/SFO are not willing to pay the (generally) higher nonstop fares but prefer instead to connect and save some money. If everyone wanted a nonstop flight, and was willing to pay for it, I gotta think US would already be flying mre nonstops.

Alternatively, there may be some other airline elites who value their elite status, upgrades and miles enough to waste some time connecting (again, generally for a cheaper fare than the nonstop). Loyalty programs have been shown to work.

So along comes VX with more nonstops than the market demands (or is willing to pay for) and discounts fares so as to fill its planes, hastening its demise.

rittenhousesq

Yes it will be interesting to see how this pans out. WN initially offered nonstop service from PHL to LAX, but that didn't last long. UA first cut back on the # of LAX nonstops; now the service is seasonal only, however their twice a day service to/from SFO always seems packed.
I think US has also cut back on these routes, but I try to avoid flying them.
Delta recently started an LAX-PHL nonstop, but I have no idea how that is doing.

Eastbay1K

Also, I believe that VX (on their new res system) can interline tickets with other carriers - there is no joint fare structure, but they can be on one ticket, so an agency can sell, i.e., PHL/SFO on VX and SFO/NRT (or pick your route) on any IATA carrier, all on one ticket.

steve64

+1^
I sometimes roll my eyes at FT'ers playing Armchair Airline CEO but I had the exact same thoughts as you when I heard the reasoning.

• Having lived in DFW (when AA was strong and DL had a decent hub) and now PHX based with both WN and HPdbaUS, I know about those non-stop fares.
• My #1 reason for taking a connection when a nonstop is available is that COdbaUA doesn't run the non-stop. Securing those 1K Elite benis another year goes a long way in my route planning. Having said that, there are times I've been in California needing to go east and took VX. But not because of the non-stop, it was due to being VX and I'd like to see this airline make it !!

Yea, my 2 bullet points aren't worth it to a lot of folks (those who are laughing at me right now ).
Likewise, I'm saying that it's just as silly to think that all of the PHL<-->LAX/SFO folks making a connection right now are just gonna jump over to the VX non-stop simply cuz it's there.

As much as I prefer VX over WN, IMHO the fact that Southwest is pulling down in the market speaks volumes.

volvo99

And it made sense for WN to cut back because:
*They found better yield and aircraft utilization on stage lengths around 750 miles.
*Their onboard product is mediocre for a NS transcon.
*LCC traffic was being siphoned off by Spirit at a relatively close by ACY-Atlantic City, and premium traffic also has Amtrak as an option, especially when ATC issues flare up.

And it made sense for US to cut back because:
*Thet rationalized their banks to achieve better connectivity and achieve better load factors in the face of volatile fuel pricing.

As for DL; they already tried to compete with "LCCs" in the LAX-FLL market and realized they couldn't generate enough yield, so they pitched tents over to MIA.

volvo99

Or it could be that the NS options aren't all that attractive because US has a level of service that is a turnoff. Also, US could fly more nonstops, but chooses not to to better drive yields on existing capacity.

The idea that loyalty programs work is correct only in the sense that the consumer still receives value for money. Plenty of chatter on the UA/CO/DL boards about recent changes to FFPs chasing people away.

As for VX bringing more capacity than the market demands, the usually positive response to the onboard product tells me they are able to generate their own demand. Despite AA's EQM giveaway, VX is likely to add, not subtract flying into DFW. Investors have recently chipped in another $150M, so I suspect your musings about imminent demise are premature at this point.

FWAAA

VX recently borrowed another $150 million, adding to a very large debt load. Interest payments at VX consume a higher proportion of revenue than at AA.

"Imminent demise?" I didn't say or imply anything about "imminent demise." That's your straw man.

You and Cush may be correct. VX may be able to make money by adding nonstops between SFO/LAX and PHL. Perhaps "people are connecting because there are not enough nonstop flights on the route."