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US airlines have sour taste from newcomer Virgin
Virgin America got a taste of the difficulties associated with the US airline business in its first foray out of Kennedy, which was delayed by severe storms that struck New York City and caused the usual problem there: long delays.
But what will the long-term impact of the San Francisco-based airline have on US carriers?
The airline “has triggered a fare war that has nearly halved ticket prices on some routes and could erode earnings” at other US carriers, observed Reuters.
“It’s pretty apparent that the airlines are worried,” Rick Seaney, CEO of fare-tracking website FareCompare, told Reuters.
Morgan Stanley analyst William Greene estimated Virgin America’s new flights will compete directly or indirectly with about half of JetBlue’s available seats.
Virgin America could hurt JetBlue and other airlines as well.
“Virgin America adds to cost concerns at other carriers that include factors such as rising Virgin America competition with Southwest,” where competition is heating up, says the San Francisco Business Times.
Virgin and Southwest both offer direct flights from San Francisco, Las Vegas and Los Angeles. Virgin reportedly is adding San Diego, another Southwest-served city, in the near future.
Observers say Virgin’s biggest impact will be on San Francisco, its headquarters where Southwest and JetBlue recently introduced service.
“There’s going to be a battle royal out there and consumers will be the beneficiaries,” aviation consultant Robert Mann told Bloomberg News.
The airline is expected to fly to as many as ten cities in the US by the summer of next year.
Virgin America is being tagged as a next generation low-fare carrier, with a host of innovative guest features and services aimed at bringing a little fun back to flying — including mood-lit cabins; one of the most advanced in-flight entertainment system in the skies with on-demand movies and TV and games, and First Class cabins with massage chairs and 55 inches of seat pitch.
Report by David Wilkening
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