4 Responses

  1. Zack Rules
    Zack Rules at |

    Interesting move by Virgin America. Do you think Jetblue would a LAX flight too or continue (at least at the moment) to believe their single daily flight to Long Beach is competitive. Also, do you see Spirit responding as they seem to be protective of their only major base of operations? Perhaps they could add an additional LAX flight or crazily, add SFO service (I think they used to serve SFO-DTW on a seasonal basis before they went Ryanair on us.)

  2. Seth
    Seth at |

    Hey Zack…

    I cannot imagine that jetBlue will compete with themselves on the Southern California – Southern Florida routes, at least no until fuel costs drop another $10-20/barrel and demand picks up a ton. It just doesn't make sense for them to do so.

    And I honestly have no idea what Spirit is going to do. They're really quite the wildcard in terms of service offerings these days. They have several routes that seem to be rather profitable and they've managed to add on a whole bunch of fees that their customers don't mind paying. Still, transcons are expensive to operate and they generally don't have the yields, especially not down the back of the plane. That being said, they do already operate a redeye from Los Angeles – Ft. Lauderdale daily that I missed before because they don't publish it in the GDS. Oops. But I'm guessing they won't do too much in terms of defending their turf there. The fares can't come down too much and I think that most folks, when given the option, would choose against Spirit if they do try to compete solely on price.

  3. Anonymous
    Anonymous at |

    Maybe you need to check some facts before spouting garbage.

    Calling South Florida-California questionable in revenue is idiotic. The average fare for Miami-Los Angeles in 2008, quarter-by-quarter, frequently was higher than even Boston-Los Angeles.

    Furthermore, if the wealth has moved north, why is MIA-LAX an 85% larger market than FLL-LAX, even though MIA-LAX commands a 46% fare premium over FLL-LAX?

  4. Seth
    Seth at |

    My favorite thing about statistics is that they often can be used to prove just about any point.

    For example, the ATPI, a metric of how much fares have changed over time, suggests that FLL is actually increasing in average fare as a market faster than MIA is. In other words the money is moving north.

    As for the LAX-MIA market demanding higher fares than LAX-FLL, a significant part of that can be attributed to the fact that there is only one airline operating the route non-stop so they can set the prices as they see fit.

    And it is a bigger market because there are non-stop flights – 7 of them daily. Folks appreciate non-stop convenience. There is a decent chance that the new seats showing up in FLL will change things a bit.

    Finally, it is entirely possible that VX and B6 will show up, have lower fares than AA from MIA and still make more money on the routes than AA does. It will take some time to figure out, but it is possible.

    I certainly don't have all the answers but I'm also not completely off-base. At least not statistically speaking. 😉