Virgin America tentatively approved. Effect on AA out of SFO?

 
Old May 19, 2007, 11:31 am
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Virgin America tentatively approved. Effect on AA out of SFO?

http://www.iht.com/articles/2007/03/...-0321skies.php

Any chance of an improvement in service/amenities to compete rather than just a fare war?

Or will AA begin to pull out of SFO like they did from BOS?

What do you think?

PS: I am very amused by this quote
"This decision will set a deadly precedent and open the door to foreign competition in our aviation industry," said Patricia Friend, president of the Association of Flight Attendants.
The whole thing about this approval is so silly in a country that allegedly believes in free-markets and wants other countries to open their markets to US interests.
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Old May 19, 2007, 11:35 am
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We already know they're improving the premium cabins on the 762s.
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Old May 19, 2007, 11:59 am
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Originally Posted by venk
http://www.iht.com/articles/2007/03/...-0321skies.php

Any chance of an improvement in service/amenities to compete rather than just a fare war?

Or will AA begin to pull out of SFO like they did from BOS?

What do you think?

PS: I am very amused by this quote


The whole thing about this approval is so silly in a country that allegedly believes in free-markets and wants other countries to open their markets to US interests.

Depends on how many flights per day and what the cost is for premium service (Business/First) that Virgin will have. But look for cut backs from someone (AA, UA, DL, B6) if Virgin adds a lot of flights with low cost premium services. AA historically cuts back when the have fare competition. IUnlikely AA SFO-JFK will go to zero. BOS AA transcon is down 50% with competition.
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Old May 19, 2007, 12:47 pm
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VX will fly the A320 with 12 F seats (quite nice too) while AA will continue with the an F/J product line, offering 39 premium seats (soon to be 40). Add in the UA PS product with quality F/J seats.

I just do not see VX displacing AA (or UA for that matter) from this the transcon routes. There is just too much demand.

AA has already signaled their response to VX and B6 on the SFO-JFK route.
- New F seats on the 762s.
- Improving food and beverage.
- Lounge access for J passengers.
- Personal Entertainment Devices.
- 1 additional RT flight for 6.
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Old May 19, 2007, 1:03 pm
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Given RT F on AA 762s JFK/SFO is $4700, if VX F (which looks in the pics comparable to AA 762 F - cant tell for sure until it goes live) is well-priced - i.e. - $1,500 to $2,000 RT and there is a good schedule, I think they could do very well. I would certainly try it.

http://www.virginamerica.com/differe...firstclass.php
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Old May 19, 2007, 1:14 pm
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Originally Posted by HNL
VX will fly the A320 with 12 F seats (quite nice too) while AA will continue with the an F/J product line, offering 39 premium seats (soon to be 40). Add in the UA PS product with quality F/J seats.

I just do not see VX displacing AA (or UA for that matter) from this the transcon routes. There is just too much demand.

AA has already signaled their response to VX and B6 on the SFO-JFK route.
- New F seats on the 762s.
- Improving food and beverage.
- Lounge access for J passengers.
- Personal Entertainment Devices.
- 1 additional RT flight for 6.
VX's F seats will get old really quickly... white leather!
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Old May 19, 2007, 1:46 pm
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The problem for the legacy airlines is likely to be the HUGE gap in the main cabins. Anyone not always flying F/J will look stupid flying the legacy coach for around the same price. VA will have no problems filling their 12 premium seats with all paid seats. How many of the AA/UA/CO premium seats will be paid seats to justify their wide bodies?

Looks like whatever market share VA wants to take in these routes it is there for the taking especially in the beginning when the planes and interiors are new and the buzz will be there. How much effect it will have on the legacies remains to be seen.

The thing that VA makes dangerous for legacy airlines is that as a consumer branding company Virgin (and it will inherit that culture regardless of the level of investment from outside the US) will outsmart all the legacy airlines marketing combined (not that it is difficult to do with the type of people AA has got in its marketing).

Expect to see some very clever ads and gimmicks where the competitor's outdated cabins and service will be exposed brutally as your "father's oldsmobile". The target market for VA main cabins will not be the bottom feeding families that fly WN but the young and the chic students and professionals that will show brand loyalty (as opposed to FF loyalty) as they grow up.

All in all, it is great for the consumer!
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Old May 19, 2007, 1:48 pm
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Originally Posted by venk
All in all, it is great for the consumer!
And I would imagine they will use the Virgin Clubhouse at JFK and SFO so the on the ground experience will beat UA and AA as well.
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Old May 19, 2007, 2:06 pm
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Originally Posted by elitetraveler
And I would imagine they will use the Virgin Clubhouse at JFK and SFO so the on the ground experience will beat UA and AA as well.
I wold not imagine that to be the case.

VX is expected to operate from the old international terminal building, although initially they may operate from a different terminal while the terminal is refurbished.

Originally Posted by vnek
The target market for VA main cabins will not be the bottom feeding families that fly WN but the young and the chic students and professionals that will show brand loyalty (as opposed to FF loyalty) as they grow up.
Agree 100%

Originally Posted by HNL
VX will fly the A320 with 12 F seats (quite nice too)
My mistake. VX will have 8 F seats with 55" pitch.
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Old May 19, 2007, 2:08 pm
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Originally Posted by UnitedSkies
VX's F seats will get old really quickly... white leather!

I saw that and thought it was a disaster waiting to happen.
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Old May 19, 2007, 3:30 pm
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I'd love it if a fare war breaks out but I think Virgin may want in on the oligopoly rather than a price battle. Isn't that how the competition has evolved in the transatlantic market?
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Old May 19, 2007, 5:07 pm
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Originally Posted by HNL
I saw that and thought it was a disaster waiting to happen.
Only of they subscribe to UA and AAs "best practices" on cabin cleaning and upkeep.
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Old May 19, 2007, 7:03 pm
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Originally Posted by HNL
I wold not imagine that to be the case.

VX is expected to operate from the old international terminal building, although initially they may operate from a different terminal while the terminal is refurbished.

Agree 100%

My mistake. VX will have 8 F seats with 55" pitch.
It's not so much in the First Class cabin where VX will shine; though shine it will, it cannot immediately compete with the larger aircraft and more frequent services whcih attract top spending business people.

BUT check out the whole offering; the maincabin is also seriously differentiated from the legacy carriers, and this could in the medium termhave a significant effect on the incumbent market:

www.virginamerica.com

Last edited by krug; Aug 19, 2007 at 2:53 am Reason: edit in working URL
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Old May 19, 2007, 7:39 pm
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Aren't essentially all full-fare premium transcon seats filled with business travelers? Just as BofA people drive Fords (not in their private lives, but in the corporate fleet), they'll continue to fly AA and UA.
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Old May 19, 2007, 10:06 pm
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Originally Posted by HNL
VX will fly the A320 with 12 F seats (quite nice too) while AA will continue with the an F/J product line, offering 39 premium seats (soon to be 40). Add in the UA PS product with quality F/J seats.

I just do not see VX displacing AA (or UA for that matter) from this the transcon routes. There is just too much demand.
As a former UA 1K, I see UA as suffering the most given they are the weakest link for those traveling Y class in the NYC - SFO market..

UA has the smallest presence in the NYC market. Unlike AA, DL and B6 which all have hubs at JFK, UA has dismantled their former JFK mini hub in favor of IAD. UA has a poor Y class product (depsite the PS branding) and typically has higher NYC-SFO fares vs AA.

UA has essentially abidicated the NYC Y class market and I cannot recall the last time I saw a New York City specific UA ad (as opposed to a general national ad) in NYC (print, newspaper, billboard, TV or radio spot).

Meanwhile, DL is bulking up their JFK hub, AA adding is a flight and will soon fully occupy an new (if uninspired) JFK terminal and B6 recently entered the market with MRTC, DTV, a customer committment and newer planes than UA. Soon B6 will have a new JFK terminal as well.

For Y class pax, UA's vaunted PS service has been downgraded and IMO less comfortable or entertaining than B6's cabin.

UA might as well just convert their 757s to all F and C configuration given their neglect of the Y product in this market, or use 737s configured in F and C class only.
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