SFO 1K

Virgin America, the low-fare airline partly owned by Richard Branson, will trim capacity by 3 per cent in the first quarter and is offering voluntary short- term leave to employees to cut costs, citing a weaker outlook.
The company, which reported a wider net loss for the second quarter, is seeking voluntary reductions through short-term leave and flex scheduling ahead of an anticipated drop in traffic in the first three months of 2013, chief executive officer David Cush wrote in a letter to employees last week. The Burlingame, California-based company, which employs about 2600 people, hasn't said how many workers are involved.


Read more: http://www.smh.com.au/business/world...#ixzz29bImd0am

ethanwa

There is ZERO good about this. VX needs a turn-a-round in the next 12-24 months or they are in big trouble.

eponymous_coward

I think the idea that VX could have found any realistic routes for a "monopoly" out of SFO/LAX, as that analyst discusses, is absurd- between UA/WN/AS in SFO/Bay Area and UA/DL/AA/WN/AS at LAX, you're talking about having to fly to cities that wouldn't work for G4 or NK, let alone a company with 8 F seats to fill and a fairly low-density cabin.

VX's business model would have worked in 2007 when you had cheap jet-A and a booming economy. Once the economy crashed and oil went to three digits a barrel, which drives up a major source of cost for EVERYONE and reduces VX's advantage at having inexpensive crew and newer planes, they were going to be in trouble... and then they did wacky things like YYZ and SNA.

It's a pity, they're a damn good product, and a bunch of people who've said "I'd fly them but the FF program's garbage, but I like that my flights are cheaper" are going to regret things if they go busto. Having competition to keep your flight prices down only works if you patronize the competition.

grt2106

Not when every flight you take with them is at a loss.

On that related not, not sure why YYZ was such a bust- Toronto really needs to advertise more. What a great city.

SFO777

That was easy. AC dropped fares, increased frequency and subbed metal with lie flat seats. With a crap FF program and only a single daily nonstop to/from both SFO and LAX, VX didn't have a chance. That plus most of the year, few leisure travelers want to go to overrated Toronto.

eponymous_coward

Yeah, that decision was a big "WTH? Really?". Right up there with SFO-SNA.

I think they should have been more aggressive on large midcon markets, instead of decisions that are really questionable at best.