10 replies to this topic

[FWAAA]

Cush of VX thinks the market is underserved:

Quote

"In Philadelphia, we saw two things that were particularly attractive," said Virgin America president and CEO David Cush. "One was high ticket prices, which generally when we come in drop quite a bit.

"Second, about half the travelers going between Philadelphia and San Francisco and Los Angeles fly nonstop. The other half connect through other cities, like Chicago or Dallas-Fort Worth.

"That tells us that it is an underserved market. People are connecting because there are not enough nonstop seats on the route."

http://articles.phil...n-entertainment

My response two weeks ago was that perhaps only half of the passengers between PHL and SFO are willing to pay the generally higher nonstop fares and that perhaps the other half are fare-sensitive leisure passengers and don't mind connecting. If VX lowers fares on the nonstops (likely), they might stimulate demand for nonstops.

[WorldTraveler]

That UA and US were not doing a better job at keeping the local market on themselves opened the door for VX to enter the market.
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Sure VX' presence in the market will increase the share of traffic flying on somebody's nonstops - but it will also dramatically reduce fares with the amount of capacity that is being thrown into the market.
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In ORD and JFK, VX has been able to withstand much larger competitive responses than what UA and US are mounting in PHL and they have persisted with their expansion. The only carriers likely to be hurt long=term will be UA and US - and yet one more long-haul market that has been the domain of network carriers will be shared with a low fare carrier - in this case one who delivers a pretty strong value proposition that passengers seem to support.

[NWANWA]

FWAAA, on 02 February 2012 - 03:45 PM, said:

Cush of VX thinks the market is underserved:


http://articles.phil...n-entertainment

My response two weeks ago was that perhaps only half of the passengers between PHL and SFO are willing to pay the generally higher nonstop fares and that perhaps the other half are fare-sensitive leisure passengers and don't mind connecting. If VX lowers fares on the nonstops (likely), they might stimulate demand for nonstops.

My friend just paid 2400 dollars for a roundtrip flight in First on United this summer. United def. gets a premium on these flights out of SFO and should do well with the connections in PHL onto USAirways. Some people will fly Virgin, but United has a great FFprogram and many loyal fliers out of the bay area.