So, Virgin America is coming to Philly


I’ll be the first to admit that I was definitely betting against Philadelphia scoring service from Virgin America in their announcement yesterday. There were a couple other destinations on their "short list" which seemed more likely to me. Alas, I was wrong, and the carrier will be launching five daily frequencies starting in April.

As part of the launch release Virgin America pulled no punches, describing their competition in less than flattering terms. Said company CEO David Cush:

Travelers deserve more options than just the typical legacy airline cattle car, and we hope our unique brand of low fares and inventive service will be a breath of fresh air for Philadelphians.

I didn’t expect Philadelphia to be the new market based mostly on the fact that transcons are expensive and it generally takes a lot of capacity to compete in those markets; once daily service, especially between larger cities, is often frowned upon by customers. Virgin America is coming in big, however, adding three flights to Los Angeles which will increase the daily frequencies from 7 to 10, a reasonably significant capacity upgrade. Similarly, the frequencies on the San Francisco route will increase from 8 to 10 with the two new Virgin flights.

But are there enough passengers – profitable ones at that – to make the service work? Virgin seems to think so, suggesting that roughly half of the passengers on each of those routes takes a connecting flight rather than a nonstop option. So maybe there are enough people looking for nonstop options; the question is whether they’re profitable. Time will tell.

With all the hating that goes on against US Airways, this route might seem like a perfect assault. But attacking them at Philadelphia with only a couple non-stop destinations seems unlikely to be the way to go. Even Southwest, which attacked many more routes, is pulling back in their assault there, suggesting that US Airways is reasonably stable and willing to fight their competitors.

One thing it might do, however, is convince US Airways to compete on pricing for the routes. A one-way fare is currently $850 on US from Phillly to LA; the new numbers with Virgin in the market look to be a bit lower:

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Interestingly, while US hasn’t been matching Delta fares on the route (or United Airlines on flights to San Francisco) they appear to be taking the Virgin entry into the market a bit more seriously. They aren’t completely matching the fare, but they are much closer, at least for San Francisco. Apparently they’re banking on their frequent flyers or the more frequent schedules demanding a $20ish premium for the route.

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For Los Angeles, however, the price disparity remains, at least as of this morning.

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It is also worth noting that elites in the US Airways Dividend Miles program can confirm that $850 fare into the first class cabin at the time of ticketing. Virgin is selling their first class cabin – admittedly MUCH nicer than that of the US Airways A321s – for about $1,000, a premium for elites, though still $200 less than the non-elite upgrade fare from US. Both are significantly higher than Delta’s first class fare on the route.

What does it all mean? I have no idea. But there are enough interesting bits at play here that it is worth watching. Oh, and prices on some of the inaugural flights are still pretty reasonable, so I might be headed to Philly for some fun in early April.

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Seth Miller

I'm Seth, also known as the Wandering Aramean. I was bit by the travel bug 30 years ago and there's no sign of a cure. I fly ~200,000 miles annually; these are my stories. You can connect with me on Twitter, Facebook, LinkedIn and .

7 Comments

  1. “…adding three flights to Los Angeles which will increase the daily frequencies from 7 to 10…Similarly, the frequencies on the San Francisco route will increase from 8 to 10…”

    Sorry, may be a minor detail, but I think your numbers may be slightly off here. In terms of the SFO flights, during the April-May period that VX is starting service, US only has 4x daily on most days, and UA has 2x, for a total of 6, and not 8, flights per day. In the peak summer months, US will often fly 5x per day, but that tapers off and during the winter schedule, they typically only fly 3x day. So assuming VX keeps service year round at 2x daily, that stacks up a bit better vs. 2x UA and 3-4x US daily.

    There is similar variation in the PHL-LAX market. Certain days in April only have 4x daily on US, while others have 5x daily. Once you get into May and the busy summer, many days are 6x daily on US. So total frequency when you add in DL and UA ranges from 6x daily to 8x daily, so it will be anywhere from 9x to 11x when VX gets in the game.

    As for selecting PHL as their next market, I thought it was the most obvious choice from the possible routes they were considering. Virgin’s goal is point to point service between LAX/SFO and major business markets, particularly on the East Coast…so PHL fits that mold perfectly.

    In terms of the pricing, why use a one-way flight as your example? RT’s are much more typical, and it appears US is matching VX at $279 RT (a great fare!) throughout the April/May schedule.

    1. Regarding the schedules, I see 7x frequencies the week of 18 April on PHL-LAX; that’s where I was basing the count on. For PHL-SFO I added the 2 new ones in doing the original count and then added them again when typing; definitely a screw up there.

      I’m a bit surprised the PHL beat PHX. Much shorter stage lengths and the ability to work on high frequencies to attract customers seems like a smart play to me. And the cost to operate those flights is significantly lower than the cost for the transcons. I’m surprised that’s the play they’re making. Toronto bombed miserably from them even though it is arguably a major east coast(ish) business market. I’m not sure why PHL is going to be so much better.

      As for comparing the one-way prices, I use that as a barometer for a few reasons. Most significantly, I use it because that’s often what the business travelers – the folks the company is trying to attract and get money from – are flying on. The folks flying on the $300 transcon round trips are not the target demographic for any airline as they are too price-sensitive and fickle in their choices as a general rule. Besides, US already has a similar r/t fare published (a bit higher, but not by much) so the “matching” isn’t particularly a change in the pricing policy of the company.

      Another reason I use the one-way price is because, in this case, VX showing up makes them the only carrier in the market that, as a rule, has one-way pricing on all fares. When the other carriers in the market match that it changes the pricing dynamic quite significantly. That hasn’t happened, at least not yet, so that dynamic is still of the old setup. That’s going to be an interesting thing to watch as it often demonstrates just how serious a threat the incumbent thinks the challenger is.

  2. I’m just happy I was right for once. Usually you’re the one correcting me 🙂

    This looks like a good opportunity to book a flight to PHL depending on how much it costs to get from SEA to SFO. Only had a few connections there, but “It’s Always Sunny in Philadelphia” brings back so many memories of my high school friends’ stupid stunts.

  3. I fly these routes a lot and UA/US usually wanted $$$ for direct flights within a 7/14 day window, sometimes up to $2K. I was often forced to take connectors through PHX. Virgin will get a share of this traffic now.

  4. Like Nick, I often end up paying $$$ for these flights (one-way fares, as you noted, can be absurd; those $850 fares are non-refundable). VX’s refundable fares are about $180 below what US charges now.

    One thing VX has done that is smart is added a late afternoon LAX-PHL; it allows someone to work a morning and into the early afternoon and still get to PHL before midnight. Currently, the latest flight LAX-PHL (not counting redeyes) leaves at about 1:30 pm, though there are later connecting options on UA and WN.

    One thing that VX has done that is not smart is not having an early morning LAX-PHL, though this may be an aircraft utilization issue. Until that’s added, I can foresee using VX only for that late afternoon flight, since there’s no advantage to me to leave LAX at noon vs. 9 am or earlier.

  5. @Seth, fair point on using one-way prices as a barometer.

    @Phudnik, I agree, the late afternoon flight on VX is really nice timing. It leaves about 2 hours later than the last direct flight on US (and that flight doesn’t even operate all year…sometimes, particularly in the winter months, the last direct flight to PHL on US is in the 11am hour), which would allow many folks to have close to a full work day in LA and still get to PHL the same day, whereas now, you really can’t stay much past Noon in the office in LA.

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