New Domestic Carrier Starts Fare War

August 2007
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Virgin America’s effect on American and Delta domestic fares

Virgin America arrives on the domestic scene this month, and already there’s a lot to say about this start-up based in San Francisco. Even though it hasn’t started flying, its pre-launch fare sale has already had an impact on other airlines’ fares. (See “Sporadic Matching” below.) Here’s how the roll-out is scheduled.

Aug. 8: Inaugural service between San Francisco and New York/JFK, and between San Francisco and Los Angeles; Aug. 29: New York-Los Angeles service commences; Sept. 26: San Francisco-Washington, DC/Dulles; Oct. 10: San Francisco-Las Vegas; and Oct. 24: Los Angeles-Washington, DC.

Low Fares in Several Markets

The airline reports that its last-minute economy class fares for business travelers will be up to 60% less than what other airlines charge, and its First Class fares will come in up to 50% lower. Virgin America says it will offer a “simplified fare structure,” with one-way fares and no Saturday-night stay requirements. The new carrier launched one-way First Class fares between New York and San Francisco or Los Angeles at only $389 (other airlines’ regular fares are as much as $804); fares between San Francisco or Los Angeles and Washington, DC/Dulles will be $389 (reg. $849); and fares between San Francisco and Los Angeles will start at $149 (reg. $281). The airline predicts it will sell more than one million seats for travel from Aug. 8 through Feb. 12, 2008.

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Sporadic Matching

American, which matches almost any airline’s fares, won’t be undersold this time either. American’s New York-Los Angeles fares have tumbled from $699 to $389 (44%) to match the new kid on the block. Delta is also matching. Continental and United, the other carriers offering non-stop service on the routes, must not feel threatened since their fares are—so far—unchanged.

Seats

In press materials, photos of Virgin America’s First Class seats look like they might be better than some US carriers’ international premium seats—and significantly better than most domestic seats. It claims to have “the most advanced personal in-flight entertainment system in the domestic airline market—with on-demand movies and TV, games, music and online chat rooms.” In First Class, “massage chairs” offer 55 inches of seat pitch and 165-degree recline, and are 21 inches wide. For perspective, Delta’s BusinessElite seats to Europe recline to 160 degrees, while its domestic First Class seats go back to about 130 degrees. Virgins brand new A 320 and A-319 aircraft will offer plugs for laptops and other portable electronic devices

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More: (877) 359-8474 and virginamerica.com

Virgin America’s effect on American and Delta domestic fares

Virgin America arrives on the domestic scene this month, and already there’s a lot to say about this start-up based in San Francisco. Even though it hasn’t started flying, its pre-launch fare sale has already had an impact on other airlines’ fares. (See “Sporadic Matching” below.) Here’s how the roll-out is scheduled.

Aug. 8: Inaugural service between San Francisco and New York/JFK, and between San Francisco and Los Angeles; Aug. 29: New York-Los Angeles service commences; Sept. 26: San Francisco-Washington, DC/Dulles; Oct. 10: San Francisco-Las Vegas; and Oct. 24: Los Angeles-Washington, DC.

Low Fares in Several Markets

The airline reports that its last-minute economy class fares for business travelers will be up to 60% less than what other airlines charge, and its First Class fares will come in up to 50% lower. Virgin America says it will offer a “simplified fare structure,” with one-way fares and no Saturday-night stay requirements. The new carrier launched one-way First Class fares between New York and San Francisco or Los Angeles at only $389 (other airlines’ regular fares are as much as $804); fares between San Francisco or Los Angeles and Washington, DC/Dulles will be $389 (reg....

[["Airline","NYC-LAX","NYC-SFO","SFO-LAX"],["American*","$804 \/ $389 (52%)","$804 \/ $389 (52%)","$281 \/ $149 (47%)"],["Continental","$799 \/ no change","$949 \/ $804 (15%)","-"],["Delta*","$804 \/ $519 (35%)","$854 \/ $519 (39%)","-"],["Northwest*","$804 \/ $389 (52%)","$804 \/ $389 (52%)","-"],["United","$804 \/ no change","$804 \/ no change","$281 \/ no change"],["US Airways","$579 \/ no change","$444 \/ no change","$281 \/ no change"]]
<small>*7- to 14-day advance purchase required.</small>
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