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sfointern
Topic Author
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Will Virgin America Succeed?

Sun Jul 04, 2004 1:43 am

FYI, everyone: here's an article considering whether Virgin America will succeed.

http://sfgate.com/cgi-bin/article.cgi?f=/c/a/2004/07/02/BUG267FIGL1.DTL

Discuss.

 Acting devilish
 
BostonGuy
Posts: 489
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RE: Will Virgin America Succeed?

Sun Jul 04, 2004 2:28 am

No planes, no financing, no routes announced that will be served.

What's the point of discussing whether or not it will succeed if the Virgin America doesn't have the necessary elements for us to even speculate on it's probability for success?
 
charlib52
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RE: Will Virgin America Succeed?

Sun Jul 04, 2004 2:35 am

Bostonbguy, because that's what we do here....  Big grin
 
smcmac32msn
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RE: Will Virgin America Succeed?

Sun Jul 04, 2004 2:40 am

Bostonbguy, because that's what we do here....

I speculate that it will be an all Airbus fleet capable of trans-con flight. My guesses on citys will be MCO (duh, who doesn't fly there), JFK, BOS, MIA, SFO, LAX, SEA, DEN, ORD, DFW, IAD.

Just a wild guess.
Hey Obama, keep the change! I want my dollar back.
 
charlib52
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RE: Will Virgin America Succeed?

Sun Jul 04, 2004 2:48 am

With it's base in SFO (regardless of the delays they will incur on a daily basis) Does anyone think that they are going after UA and AS on the west coast as part of their plan? Both those have the west coast locked-up and with lots of customer loyalty, however personally I think prices are high ( for example from my home: $290 SEA-LAX versus $290 SEA-JFK transcon??? what's up with that???) Could be an opportunity?

Just my WAG...
 
SuperDash
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RE: Will Virgin America Succeed?

Sun Jul 04, 2004 3:04 am

They will take a beating on the West Coast. The fares are already low, so another low fare carrier will not stimulate the added traffic needed for survival. There are 4 major players in the west and 3 of them are pretty healthy to really healthy (Am West, Southwest, Alaska). San Fran is high high cost (both the airport and the cost of living). It has heavy delays and Southwest controls the Bay pricing. Transcon out of San Fran and the Bay area is highly competitive and low yield. So, this game plan is poor. An oh by the way, they don't have an operating certificate, or financing or US ownership and the Delta/Song flunky Reed is the CEO. But they did order A320s (which are too big for most West Coast routes and can't fly transcon without a payload penalty). I don't usually bet against Richard, but in this case, I don't give him much of a chance. Richard, put your money in an interest bearing savings account...You will make tons over what this airline will do for you.
 
smcmac32msn
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RE: Will Virgin America Succeed?

Sun Jul 04, 2004 3:12 am

But they did order A320s

This was my original guess on aircraft type, but I didn't wanna put it in my original post. I missed a city on my original post also... LAS. I dont know about the west-coast, but if they try the mid-continent they might be successful. Try breaking into the markets of ORD, MKE, CVG, MSP, DTW, MEM, IAH, MCI, Rapid City SD, etc. I also agree that the CEO could do much better things with his money though. This, like FlyI is bound for failure.
Hey Obama, keep the change! I want my dollar back.
 
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solnabo
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RE: Will Virgin America Succeed?

Sun Jul 04, 2004 4:05 am

 Big thumbs up Way to go Branson / Virgin  Big thumbs up

Mike//SE
Airbus SAS - Love them both
 
airbus3801
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RE: Will Virgin America Succeed?

Sun Jul 04, 2004 4:13 am

Shouldn't this be in the Polls section!
 
BostonGuy
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RE: Will Virgin America Succeed?

Sun Jul 04, 2004 5:20 am

Yes, Airbus. I agree.

I'm learning that the thread title often has nothing to do with what the thread creator wants to discuss.
 
LMP737
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RE: Will Virgin America Succeed?

Sun Jul 04, 2004 10:54 pm

One has to question the logic of choosing the two most expensive cities in the US in which to set up shop.
Never take financial advice from co-workers.
 
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chrisnh
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RE: Will Virgin America Succeed?

Sun Jul 04, 2004 11:02 pm

I think this carrier will only succeed if another legacy or LCC carrier ceases to exist. Song seems to be treading water, so that may be the roadkill that Branson's vulture is circling. JetBlue is still an untested operation; wait until they start taking delivery (and paying for) all their new jets and see if the bloom is still on the rose there. But Virgin USA can't just come along and do well 'just because.' They need someone to go belly-up for them to have a good chance. When you stop and think about it, what economically feasible city pairs are there that ARE NOT already served well enough?
 
Lono
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RE: Will Virgin America Succeed?

Mon Jul 05, 2004 11:16 am

Securities firm JP Morgan thinks so (6/30/04)....
they downgraded AS stock to "Underweight" due to Virgin starting competition...on the west coast...
This will be interesting

[Edited 2004-07-05 04:31:00]
Wally Bird Ruled the Skys!
 
uadc8contrail
Posts: 1666
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RE: Will Virgin America Succeed?

Mon Jul 05, 2004 11:42 am

can we all get a round of applause from the DL people in here.......let fred wreak havoc on richards empire like he did at DL.............
Bus Driver
 
Lono
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RE: Will Virgin America Succeed?

Mon Jul 05, 2004 12:12 pm

He knows how DL operates (or doesn't!)... He may use his past experience to pin point where DL is weak... and exploit to Virgins advantage!!!
Wally Bird Ruled the Skys!
 
hz747300
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RE: Will Virgin America Succeed?

Mon Jul 05, 2004 2:52 pm

I think they will succeed once they have two secondary hubs. Then SFO will eventually be scaled down and the hub activity moved to San Jose.
Keep on truckin'...
 
BostonGuy
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RE: Will Virgin America Succeed?

Mon Jul 05, 2004 8:23 pm

I was finding it hard to believe that SFO would be a hub or major destination for Virgin America.

One thing stood out: Virgin America's choice of San Francisco as a "maintenance base" and/or "operational base".

I did find some other news tidbits featuring quotes from Virgin America spokeswoman Stacy Geagan:

"...it would be incorrect to assume that San Francisco International Airport will become a Virgin America hub".

"We have not announced airports (to be used) and it is not our intention to create a hub operation".

I think Hz747300 is onto something. I wouldn't be surprised if SFO isn't even on a list of initial cities served.

Here's a link to the article from where I extracted the Stacy Geagan quotes (same paper as the link in the thread starter): http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2004/06/16/BUGQU76KBE1.DTL&type=business
 
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legacyins
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RE: Will Virgin America Succeed?

Tue Jul 06, 2004 3:35 am

The Virgin team already stated that their new airline will not be a "hub" operation. SFO will have a few of the first flights but so will various other cities. Reid was out at SFO this past Thursday and was shown which gates his airline can use in the Int'l terminal until the "old" International could be up and running. A LCC really does not need a lot of gates. They specialize in high frequency/ turn around times. Highly unlikely they will move down to SJC.
 
vsmike
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RE: Will Virgin America Succeed?

Tue Jul 06, 2004 3:42 am

Yes it will!








VSM
Skyteam. Caring More About Me.
 
vsfullthrottle
Posts: 274
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RE: Will Virgin America Succeed?

Tue Jul 06, 2004 5:18 am

I second VSMike, Yes it will succeed...
 
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VS4ever
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RE: Will Virgin America Succeed?

Tue Jul 06, 2004 9:06 am

I think it will succeed.

Reasons:

1. Very rarely has Branson failed with a business model. Just visit the Virgin corporate website to see just how many companies exist under the brand.

2. Financing - Whilst I understand the US ownership issues have not been resolved and I await with interest to see how that plays out, I wouldn't worry about financing, in fact the Virgin Mobile IPO in the UK will give him more than enough spare capital to get started, without using any existing funds, even if he was planning to start it with those funds anyway.

3. Aircraft - If people are correct and the A320 would not be capable of Transcon, then lets assume he's either a) not doing Transcon, or b) stopping part way. However, it's interesting to note that Jetblue seem to be doing alright with their fleet of er, A320's. So I don't think it will be a problem.

4. Hub - I disagree slightly with those people who don't think SFO will become a hub. Whilst I don't think for an LCC a hub is the correct way to go, VS already has a flight to LHR from SFO everyday (which I am sure could be upgraded to 2 if demand existed), so it would be a great marketing ploy for him to say "Hey Fly on VS to SFO, then we can take you on Virgin America" whereever you want to go", he wins both ways.

5. Cities of choice - Everyone knows SFO gets fogged in, a lot of the time, but as someone rightly pointed out, it's not going to be necessarily a hub, so the delays may not be as bad as everyone thinks. Plus to begin with it's only going to be a small fleet, I think the choice of SFO, was definitely the maintenance aspect and initial capacity. Not for a hub.

6. Branson - he is a shrewd cookie and wouldn't have even spoken to Reid if he felt he would destroy the brand image. Believe me, Virgin are fanatical in the extreme about their brand and customer service. They won't even start something until they are absolutely sure everything is in place to make it work.

7. Competition - I still think a lot can be done on the west coast in terms of pricing, yes it's expensive here, but it's interesting that when I had to go to LAX from the bay area for a meeting, the difference between going from OAK and SFO was about $10 tops and I was getting the same price quote from WN for OAK-LAX as I was for OAK-LGB on Jetblue. I thought the point of LGB was it was supposed to be cheaper and quicker to use than LAX? hmmmm..... If the capacity is there and money to be made, Branson will almost certainly find it, time will tell, but as I said before, it is not often that he fails. Someone mentioned that a carrier would need to disappear before Branson could move in? why? no-one disappeared when Jetblue started up? so why shouldn't it be any different now? just because they have done a good job, doesn't mean someone else can't.

So my gut feeling from all of this is that Branson will succeed eventually, it might take a while, but he's had knockbacks before and he is still here, so best of luck and I can't wait to see the new aircraft around SFO.

VS4ever.
That feeling when you sit at the end of a runway, brakes are released and the raw power takes over. Now that is a thing of beauty and it never gets old.
 
miaskies
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RE: Will Virgin America Succeed?

Tue Jul 06, 2004 9:27 am

I think VirginAmerica will fly to these cities at some point:

NYC (JFK)
MIA (interesting if they take on AA on the NYC-MIA routes)
LAX
SFO
ATL
SJU (Compete w/ JetBlue on their low cost JFK-SJU, these routes are very $$$ profitable and also give them an entrance to the Caribbean)
BOS
Montreal or Toronto (Why Not? hmm interesting to see LCC do service to Canada)


My 2 cents...Ciao!
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vsfullthrottle
Posts: 274
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RE: Will Virgin America Succeed?

Tue Jul 06, 2004 9:34 am

MIASkies, you should also mention MCO, almost every US LCC flys into Orlando and I am pretty sure V.America will too!!!
 
vsmike
Posts: 279
Joined: Mon Sep 15, 2003 12:40 am

RE: Will Virgin America Succeed?

Tue Jul 06, 2004 9:37 am

I want SFB... SFB... SFB...

Orlando/Sanford INTERNATIONAL airport...
Lots of empty domestic gates thanks to PanAm!

VSM SFB
Skyteam. Caring More About Me.
 
lowrider
Posts: 2542
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RE: Will Virgin America Succeed?

Tue Jul 06, 2004 9:50 am

Branson's track record suggests that he will be successful in this latest venture. However, the past 50 or so years are littered with airlines started by people who thought they would be successful too. Some were bought up, such as Western and TWA, before they failed, and some simply fell apart, like Braniff. People's Express, North Central, North Eastern, Repulic, Ozark, the list goes on.

I think the biggest obstacle is that at some point, the LCC market in the US is going to be saturated. You can only drive down fares so far and still make money. With Southwest, JetBlue, ATA, Frontier, AirTran, America West, and Spirit slugging it out with the rest, you have to wonder how much more room there is? Also, many of the mass vacation packages using carriers such as Sun Country, Pace, Apple, TransMeridian, Champion, Southeast, Sunworld, Planet, and Ryan, This takes a bite out of what was a traditionally strong market for the LCC's

Eventually I think we will go through another "thinning of the herd" phase. It will be interesting to see who is left standing.
Proud OOTSK member
 
PlaneviewNYC
Posts: 130
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RE: Will Virgin America Succeed?

Tue Jul 06, 2004 10:40 am

With their hub in SFO and their corporate headquarters in NYC, a JFK-SFO route is almost guaranteed.
 
toltommy
Posts: 2809
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RE: Will Virgin America Succeed?

Tue Jul 06, 2004 11:47 am

Anyone have a link to the VirginUSA website? It was posted here once, but my search didn't find it. I remember that the address had nothing to do with the name of the airline. Can anyone help? I promise to bookmark it this time!
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JeffDCA
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RE: Will Virgin America Succeed?

Tue Jul 06, 2004 12:15 pm

TOLtommy,
http://www.virginamerica.com - That's the only one i know of, hope it helps.

Cheers,

Jeff

[Edited 2004-07-06 05:16:26]
If something hasn't broken on your helicopter, it's about to.
 
miaskies
Posts: 1268
Joined: Thu Jun 10, 2004 3:08 am

RE: Will Virgin America Succeed?

Tue Jul 06, 2004 12:19 pm

Well I did not mention MCO since that city is "saturated" w/ LCC service...as stated before the U.S. is going to be "saturated" w/ LCC's. I placed MIA on the list because other than AirTran, no other LCC's serve it...so that could be interesting to see how VIRGIN AMERICA takes a roll at MIA. Could be interesting and seeing how they have a daily 744 to LHR from MIA..it could workout.
Crosscheck Complete :)
 
ckfred
Posts: 5189
Joined: Wed Apr 25, 2001 12:50 pm

RE: Will Virgin America Succeed?

Tue Jul 06, 2004 12:39 pm

Sir Richard needs to seriously consider two issues if Virgin America is to succeed.

First, Virgin America should coordinate its schedule with Virgin Atlantic. I remember a few years ago watching Sir Richard being interviewed on CNBC. A viewer wanted to know why Virgin Express didn't coordinate it arrivals and departures with Virgin Atlantic at LHR.

Sir Richard said that the two airlines normally don't go after the same customer, but that he would look into the possibility of coordinating schedules in the future.

All of the legacy carriers coordinate their trans-Atlantic and trans-Pacific flights with domestic flights. Virgin America and Virgin Atlantic should do the same.

Second, since most flyers know about the high level of on-board service offered on Virgin Atlantic, Virgin America is going to have to offer service that is superior to Southwest. My guess is that Virgin America might have to even go a notch above JetBlue.

Virgin America doesn't have to have the on-board massage therapist, but if I got off a Virgin Atlantic flight, having been in Upper Class, and then connected to Virgin America and found something akin to Southwest, I would be more than a little peeved.
 
toltommy
Posts: 2809
Joined: Tue Dec 09, 2003 9:04 am

RE: Will Virgin America Succeed?

Tue Jul 06, 2004 11:15 pm

JeffDCA -

Thanks for the link, that's the site I saw before, it must've been a beta link back when it was first posted.
A300/A310/A319/A320/A321/A332/A333 / 707/712/727/732/733/734/735/738/739/752/753
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