It's actually not immaterial at all and it is definitely a fact. While you may be willing to pay $10 extra and another $10 or more in gas each way to have a frilly flight, the vast majority of people won't. You may not think that $4 is all that much but, based on their tried and proven experience, airlines know that it only takes a penny difference to see a huge difference in the numbers of bookings. Most people are very cost conscious and go directly to the lowest price feature on most booking engines (travelocity, Orbitz, etc.) - the lowest priced carrier will show up at the top of the display. If it's Alaska's $73 fare, and not Virgin's $77 fare, it's likely Alaska will capture more of the business. Since Virgin is so new there will undoubtedly be some people that will be looking to try them out but when the dust settles, he who has the lowest price will almost always win the business - frills or not. The overwhelming majority of people want a cheap fare on a safe plane that leaves/arrives on time and don't care about mood lighting, meals or television - especially on a 2-3 hour flight.