I think it will succeed.
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
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
, 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
was about $10 tops and I was getting the same price quote from WN
as I was for OAK
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
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.