Virgin America Chooses Empty Seats Over $41 Dallas-NYC Fares

Discussion in 'Regional & National Airlines' started by Hatu, Feb 19, 2016.

  1. Hatu

    Hatu Veteran

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    Virgin America Inc., caught up in a Dallas fare war, said it will fly out of the city with empty seats rather than sell tickets at rates so deeply discounted it cant make money.

    We are not going to fly passengers at rates that will not make money, he said on a Thursday conference call with analysts. We are going to make sure we get an average ticket value up to where its sustainable and we can earn a return, and we'll take the hit on load factor.

    One-way fares of $30 from Dallas to destinations along the U.S. West Coast and $41 walk-up fares from Dallas to New Yorks LaGuardia Airport were among those Virgin America cited from a recent review of airline data filed with the U.S. Transportation Department. Theres no indication when the battle might end, and everyone is feeling the pain, he said.

    Southwest and American are reporting load factors, or the amount of seats sold, above 90 percent on some flights to Los Angeles and New York, with about half the tickets priced below $100, he said.

    http://www.bloomberg.com/news/articles/2016-02-18/virgin-america-chooses-empty-seats-over-41-dallas-nyc-fares?cmpid=yhoo.headline
     
  2. jimntx

    jimntx Veteran

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    Smart move on Virgin's part.  When people on here and elsewhere start the "I don't know why the company keeps saying we're losing money.  Every flight I work is jam-packed full" argument, this is why.  A full flight does not mean a profitable flight.  If they are selling tickets from DFW to the West Coast and NY for $30 one way, I would be surprised if that price covers the cost of the fuel, much less the paychecks of the working crew.
     
  3. eolesen

    eolesen Veteran

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    It's only smart if they're actually getting an average fare that does more than break even.
     
  4. swamt

    swamt Veteran

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    I also read another article that said Virgin is pulling back some of their San Fran and Las Ang. flights from Dallas as well, do to the lower airfares.  Not sure how smart this will end up being until later on.
     
  5. jimntx

    jimntx Veteran

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    Well, I've seen more than one financial review which indicated that if it weren't for Mr Branson's deep pockets, Virgin America would have shut down some time ago.
     
  6. eolesen

    eolesen Veteran

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    That might have been true during their infancy, but they did make money in 2015. How much of that was directly due to lower fuel is still up for discussion.

    Their average fare fell from 2014 to 2015, but presumably that was from launching all the shorthauls and competition at DAL.
     
  7. dash8roa

    dash8roa Senior

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    Eastern airlines had full flights just before the shutdown in January 1991.
     

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