When was the last time you heard someone get excited about Newark? For Virgin America, however, there is a lot of excitement as the carrier looks to challenge United Airlines on two major routes, connecting Newark to San Francisco and Los Angeles.
The service starts in April 2013, with thrice daily service each to both San Francisco and Los Angeles. Given that Virgin America has been slowing its growth (and even cutting ASMs this winter) adding these long-haul flights is a big move for them. Not surprisingly, the introductory fare sale is obvious in the market. Here’s the lowest one-way fares between Newark and San Francisco chart for the two weeks before and after the service launches:
The numbers are similar out of LAX.
For the premium cabin seats and refundable fares, the markets where real money is made (at least in theory) the fares don’t appear to be changing all that much. It doesn’t appear that Virgin is pushing too hard against United and United has not – at least not yet – decided that they are looking to start a fare war. That said, I do expect that United will eventually respond in some way. After all, disparities like this make it hard to justify the higher fare:
The competition is good for consumers in that it should bring fares down a bit in the market. And it might be good for consumers in service levels or other experiences. A decent chance of a frequent flier promotion based on this, too. That said, it isn’t clear just how long Virgin America can afford to fight it out with other carriers based on fare alone, and their service frequencies are half of what United is offering. Virgin has challenged US Airways in Philadelphia and American in DFW. They’re still in both markets but it doesn’t appear that the legacies have taken much of a hit either.
It will certainly be interesting to watch.
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