Virgin America is turning its operation at Dallas Love Field into a bit of a hub serving connecting passengers rather than focusing only on the O/D markets. The carrier announced service between Dallas and Austin today for 5x daily flights; service begins on 28 April 2015. Currently Southwest flies the route 10x daily while American Airlines flies DFW-AUS 14x daily. Service to Austin will replace previously announced service to Chicago O’hare; the company has expressed concerns about securing the necessary gate space at ORD to support that route.
Choosing Austin means heavy competition but also lower operating costs due to it being a shorter route. It also means feeding the flights to Washington, DC, Los Angeles and New York City from Austin (SFO has non-stop flights). That can help to increase load factors but it also creates a situation where yields are likely to be depressed; connecting flights typically have lower yields than nonstop flights with lower fares and the revenue is amortized over higher costs.
That could present financial pressures on the new Dallas hub operations even as it creates something more of a hub rather than just a city with a lot of O/D flights.
Read More: Virgin America to battle Southwest on Dallas-Austin route
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