Aug 112010
 


VxA320b  
Good news for people wishing to travel
between DFW and SFO or LAX.  Virgin America plans to start service
between these cities on an apparently as yet unspecified date in
December, with two roundtrips from both SFO and LAX a day (sort of one
in the morning and one in the afternoon).

Dallas has long been a fortress hub for
American Airlines, and AA have been very aggressive at protecting their
primacy there.  It will be interesting to see what AA does to
respond to Virgin America's threat – would you be stunned if, for
example, AA ensured it had flights departing at almost exactly the same
times and at the same or even lower fares?  Would you be stunned if
AA started offering double mileage on those flights?  And would you
be stunned if flights at other times of the day were not similarly
discounted?

These are all typical responses when other
airlines have attempted to offer service in/out of DFW.  And all
have been passively blessed by DoT and DoJ as being fair marketplace
competition, even though the inevitable outcome is the failure of the
new airline's flights and a subsequent return to the 'same old same old'
service and fares as soon as it disappears.

Meantime, the first shot in the airfare war
that will almost surely follow has been fired, by Virgin America. 
They are offering fares from $129 each way (ie $258 roundtrip) between
DFW and either LAX/SFO – a fairly restrained and moderate level of
discount which they are probably hoping won't enrage AA into an
extravagant retaliation, and which are on sale only until midnight
Thursday (Pacific time).  Currently the lowest roundtrip fares seem
to be about $313.

Because Virgin America is a privately held
company, little is known of their financial situation, but it seems the
airline has generally been losing money until recently, and one wonders
if it has the financial strength to stand up against American Airlines
if AA decides to 'teach them a lesson'.

More details in their announcement
here.

  One Response to “Virgin America to Fly to Dallas – Offers Discounted Fares”

  1. One of the reasons that Virgin decided to add DFW was that it couldn’t obtain gate space at Chicago-O’Hare.
    But here’s something that I thought about. If Virgin started service out of ORD to LAX and SFO, not only would it compete with American and United, but also Southwest out of Midway. Generally, Southwest likes to put a number of flights on a route. Virgin may not have been able to offer as many flights as Southwest, and Southwest could very well undercut any fare that Virgin would charge.
    But with flying LAX and SFO to DFW, Southwest can’t do anything for a few years, because of the limitations on destinations that can be flown non-stop out of Dallas-Love Field.
    Virgin may be hoping to fly under AA’s radar, but it’s also trying to get some following among people who, if given a choice, would fly Southwest to and from the Metroplex.
    This tells me that while Virgin isn’t horribly afraid of American, United, and Delta, it may have a greater fear of Southwest

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