commavia wrote:Again - no argument. In 2008, Virgin America's offering in the transcon markets was highly disruptive. In 2016? Not so much.
2016 speaks to my point about sniffing IPO cash.
commavia wrote:In other words ... Virgin America came into DAL without any clear plan as to how to profitably schedule its two gates there, and then set about filling (or in some cases not filling, as it were) its DAL flights with drastically-discounted seats in a transparent attempt to salvage the DAL adventure. "Disruptive" as defined by aggressive discounting? No question. Financially sustainable for the industry, let alone Virgin America itself? Demonstrably not.
VX is profitable. The legacies now have huge profit margins. Defining a carrier with 5% profit margins rather 25% as unsustainable just hands the industry to the legacies for their view of what competition should be. i.e. none.
commavia wrote:I don't follow. Airlines have been flying thousands of seats per week from California to Mexico for decades - long before Virgin America even existed. Indeed, Alaska was arguably more of a "trailblazer" in this area than Virgin America. I think the "huge upswing" in flying between California and Mexico has far more to do with the progressive loosening of the U.S.-Mexico bilateral than Virgin America. Capacity between LAX and Mexican beach resorts is about to "swell ridiculously" again this winter - and it has absolutely everything to do with the lifting of bilateral restrictions, and basically nothing to do with Virgin America.
VX was the first LCC into those markets since F9 failed at it. VX did much better and then came WN from SNA and B6 wanting to fly from LGB. Now everybody with an airplane seems to be flying LAX-SJD/CUN. When VX did it they didn't need a liberalized bilateral because there were open spots nobody thought the market could justify. These markets had been stagnant and VX stimulated them to grow and they keep on growing.
commavia wrote:Another example of a disruption that happened nearly a decade ago.
They still get credit.
commavia wrote:In other words - once faced with the reality that at some point even the most idealistic investors would demand some form of economic return for their hundreds of millions in capital, Virgin America's managers decided it was time to behave in a financially rational way.
Let's be frank, Branson is a deal-maker and he always has been. He really hasn't kept anything. His airlines are all basically gone. The record company is gone as far as I can see. All these businesses are just transient investment vehicles with his brand stamped on them to get them off the ground and create resale value. Good for him.
VX was not intended to be like B6 IMHO, a long term independent airline. VX was created to be sold. Indigo has the same motus operandi. So it was inevitable they wanted to launch strong out of the gate and then wait for a buyer. It doesn't mean the government has to let them be bought. The best laid plans of mice and men... If they stick around they can either see all their investment slowly die as they blow like a stick in the wind or they can get back to what they were doing which is being disruptive. How disruptive was FL after the WN merger was announced? They call it a chilling effect.