Speculation: Virgin America competition coming to DAL: effect on AA?
Apr 28, 2014, 10:38 am
#16
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WN did not become a large airline just flying Maw and Paw Kettle to see the grandkids, and they have MORE gates at LGA, DCA and LAX than VX does, as well as ability to fly to HOU, SAT, PHX, ATL and other places than VX will never be able to offer out of DAL.
Apr 28, 2014, 10:42 am
#17
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I think what this shows is that Virgin does not have enough differentiation in product versus AA in order to win customers over once they decide to use DFW airport. Virgin, on the other hand, absolutely has a product lightyears different than Southwest and that they "could" compete more on product than anything else.
I think this is more a story of inability to compete with AA than anything else.
I think this is more a story of inability to compete with AA than anything else.
Apr 28, 2014, 11:01 am
#18
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Lots of business travelers are just fine in a Y seat for a 1-3 hour flight, especially if that is on a 737 instead of a cramped RJ.
WN did not become a large airline just flying Maw and Paw Kettle to see the grandkids, and they have MORE gates at LGA, DCA and LAX than VX does, as well as ability to fly to HOU, SAT, PHX, ATL and other places than VX will never be able to offer out of DAL.
WN did not become a large airline just flying Maw and Paw Kettle to see the grandkids, and they have MORE gates at LGA, DCA and LAX than VX does, as well as ability to fly to HOU, SAT, PHX, ATL and other places than VX will never be able to offer out of DAL.
Will be very interesting to see how WN responds. They are no longer a low fare carrier, lack of amenities, chronic delays, no interlining during IRROPS, labor issues, stated goal of 15% margin combine to put them in a precarious position; will they match fares, risk their stellar financial performance, or cede market share to VX, NK?
Apr 28, 2014, 11:39 am
#19
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I don't disagree that VX has a great product, I like it - but limited frequency is what won't make this a true competitor. I'm just spit-balling here, but let's say VX does 3-4 departures to NYC-area daily. Is the product that much more superior to AA that you'd trade AA's 24+ daily flights? If it's as successful as you guys are predicting - won't the fares rise as the capacity is severely constrained by just having a handful of flights from 2 gates with zero room for expansion?
VX should have grown at DFW, but AA is such a juggernaut in terms of daily schedule that it's very hard to make any in-roads.
VX should have grown at DFW, but AA is such a juggernaut in terms of daily schedule that it's very hard to make any in-roads.
Apr 28, 2014, 11:44 am
#20
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I don't think the City of Dallas is legally bound to the DoJ "recommendation" that VX get the two gates AA had to give up at DAL. Though if they DO decide to snub VX and lease the gates WN, I am certain there will be a legal challenge.
Apr 28, 2014, 12:14 pm
#21
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I don't think AA is very much concerned with VX and their 3x daily service to DCA and the 4x to LGA - the huge win for AA is that they get to block DL out of DAL- When the divestiture was announced, DL proposed a large number of flights out of DAL that they won't have the chance to use now... An LCC competitor capped at two gates and a handful of flights is just what AA wants.
Apr 28, 2014, 12:50 pm
#22
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VX is the aspirational airline of the Silicon Valley crowd (and the one in the U.S. with the highest customer satisfaction), and AA is forced to match its prices on SFO-DFW even if VX only has 3 frequencies to AA's 11.
UA, which is far stronger in the Bay Area than AA, does not match VX's lowest prices on its 4 frequencies (2 of which are on -- gasp -- CR7s).
However, the days of $1,000+ SFO-DFW economy class roundtrips are gone.
UA, which is far stronger in the Bay Area than AA, does not match VX's lowest prices on its 4 frequencies (2 of which are on -- gasp -- CR7s).
However, the days of $1,000+ SFO-DFW economy class roundtrips are gone.
Apr 28, 2014, 3:05 pm
#23
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With all due respect to the yokels on the Dallas City Council, they can no more give those gates to WN as they could give those gates back to AA.
The Department of Justice required that AA divest those gates as a remedy in an antitrust settlement, and the DoJ has selected VX as the appropriate new competitor. The Dallas City Council isn't in a position to second-guess that determination.
WN already controls 80% of the 20 gates at DAL and not a chance that a consultant's opinion will provide a legal rationale for awarding WN control of 90% of those scarce gates.
The Department of Justice required that AA divest those gates as a remedy in an antitrust settlement, and the DoJ has selected VX as the appropriate new competitor. The Dallas City Council isn't in a position to second-guess that determination.
WN already controls 80% of the 20 gates at DAL and not a chance that a consultant's opinion will provide a legal rationale for awarding WN control of 90% of those scarce gates.
Apr 28, 2014, 4:22 pm
#24
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They may do, but that's not the same as controlling the gates. They were just talking about this on the DFW-area local news. The city council is sure that they have the final say, but AA believe that they get to decide since they are the ones giving up the gates (and they chose VX)
Apr 28, 2014, 6:42 pm
#25
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I am from Dallas (north), but have felt that, while DAL is convenient for central and south of Dallas folks, the lack of connecting flights INTO DAL makes it less viable than DFW. Maybe this will change with VX, but VX has limited flights everywhere (small route map).
Apr 28, 2014, 6:58 pm
#26
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Apr 28, 2014, 9:29 pm
#27
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I am from Dallas (north), but have felt that, while DAL is convenient for central and south of Dallas folks, the lack of connecting flights INTO DAL makes it less viable than DFW. Maybe this will change with VX, but VX has limited flights everywhere (small route map).
If this is no big deal for AA why did they offer DEQM when VX launched service to LAX and SFO?
I'm hoping at a minimum that this leads to a major fare ware. It would be nice not to have to trek to DFW.
Apr 28, 2014, 10:41 pm
#28
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They may do, but that's not the same as controlling the gates. They were just talking about this on the DFW-area local news. The city council is sure that they have the final say, but AA believe that they get to decide since they are the ones giving up the gates (and they chose VX)
Of course AA wants VX to have the gates. VX could stay at DFW and fly the same proposed flights, while WN could have 2 more gates and add even more competition to AA.
Apr 29, 2014, 1:46 am
#29
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It'll be a fun two years or so while it lasts. Cheap fares for everybody.
And AA isn't going to be the one that runs Virgin America out of town, it will be Southwest.
Maybe after $20M in losses Virgin will give up on this ridiculous idea?
I love Virgin America, it's domestic product is the best out there (but AA has superior catering, IMO, and Virgin's product is the worst in the trans-con market now), but wow, is it being stupid with this.
And AA isn't going to be the one that runs Virgin America out of town, it will be Southwest.
Maybe after $20M in losses Virgin will give up on this ridiculous idea?
I love Virgin America, it's domestic product is the best out there (but AA has superior catering, IMO, and Virgin's product is the worst in the trans-con market now), but wow, is it being stupid with this.
Apr 29, 2014, 2:39 am
#30
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Despite the fact that Dallas is primarily served by pmAA, the new airline is acting as one entity from the perspective of business intelligence planning and route competition. Therefore I'll move this to the parent forum.
~Moderator
~Moderator