Where Will Virgin America Hub?

[coolflyingfool]

I just think that every day that they wait, they run the chance of loosing gate space. B6 is expanding, WN is expanding, F9 is expanding, so airports are going to not be able to accomodate them some time in the future. I feel their target hub has to be SFO or IAD. BOS is pretty much out of gates. Just my thoughts..........

 

[RowUnderDCA]

Why does this keep popping into my head: DCA?

Did I hear that Branson's discussions with U were halted? But U is still considering asset sales. I just can't shake the thought.

 

[coolflyingfool]

I was just thinking that no matter where they hub, they are a year to year and a half away from launching service. We have a ways to go.

 

[Just Plane Crazy]

I was just thinking that no matter where they hub, they are a year to year and a half away from launching service. We have a ways to go.

I wouldn't say that they are so far out to start operating. Branson has lots of experiance to start an airline. He has it down to an efficiant way to get things done. Just because he has not officially started the airline dosn't mean that he hasen't worked wthi the FAA on certification etc. And now with Reid heading the venture it is more than certain that is is going to move fast. Would estimate by Jan'05 they will be selling tickets.

 

[mweiss]

What happened to selecting underutilized airports near big cities? Gary/Chicago? Toledo/Detroit? Orlando Sanford? Mid-America? Allentown? What's wrong with lower landing fees contributing to lower operating costs?

The backlash against these reliever airports is that carriers quickly realized that passengers are willing to commute to get a cheaper flight, but not willing to commute as far as these "relivers".

Also, the "underutilized" strategy was developed in response to the major airports' slot control. With slots disappearing from all but two airports in the 1990s, the value of that strategy diminshed. WN has already established their markets in those second-tier airports, so they have no incentive to leave them. Nonetheless, you can see how even WN has begun to abandon that strategy, with their new service to PHL.

 

[LiveInAHotel]

Maybe it will be PIT? US has given up several gates at PIT.

 

[Ch. 12]

Maybe it will be PIT? US has given up several gates at PIT.

Doubt it. Not enough local traffic.

 

[atpcliff]

Hi!

The latest press releases from VA state that the hub will be BOS, LAX or DC area. THey will start operating in 1 year. THey've hired Delta's COO as their CEO.

CLiff
DTW

 

[Cris L]

yesterday there was a very interesing article in the local paper here (LONDON) about Virgin Express (Virgin's european LCC) which has just merged with SN Brussels...

Anyway the article said that per the agreement, Virgin has the right to reclaim the Virgin Express brand in 2 years time.

This lead to speculation about a possible Virgin/BMI merger under the Virgin brand. Virgin having some great longhaul routes, and BMI while operating some longhaul, is primarily a great European airline.

Both companies agree that such discussions are going on, but say that no conclusions have been reached. They also say that such a merger is in fact a GOOD idea, because it builds on the strengths of the 2 companies, and adds to an already very well known brand.

So who knows

 

[Just Plane Crazy]

yesterday there was a very interesing article in the local paper here (LONDON) about Virgin Express (Virgin's european LCC) which has just merged with SN Brussels...

Anyway the article said that per the agreement, Virgin has the right to reclaim the Virgin Express brand in 2 years time.

This lead to speculation about a possible Virgin/BMI merger under the Virgin brand. Virgin having some great longhaul routes, and BMI while operating some longhaul, is primarily a great European airline.

Both companies agree that such discussions are going on, but say that no conclusions have been reached. They also say that such a merger is in fact a GOOD idea, because it builds on the strengths of the 2 companies, and adds to an already very well known brand.

So who knows

Isen't BMI part of STAR? So with that they have SK, LH, OA, NZ, SQ, TG, UA, SA. LO etc for longhaul.

 

[flypie]

IAH is out as a Virgin hub if flyi (Independence Air takes off).

Not neccesarilly. I thought this first but the more I think about it, the less likely of Independance Air's success. They have a poor reputation of bad morale amongst employees, aircraft cancellations and delays, and loss luggage just to name a few. I also cannot see them filling 300 flights a day out of IAD after only several months of operation. It is likely that Independence Air will be out of business or back to what they are doing now (as United Express or Delta Connection). Although I believe they have a good idea, I doubt that a company can be changed so much in such a short period of time.

This could make IAD a very possible location to hub for Virgin America/USA. United is struggling financially and will have lost some of their dominance as a result of the ACA divorce. I am sure most people of northern Virginia would pay a little more to fly out of IAD than make the commute to Baltimore which would allow them to compete against WN/FL.

Maybe it will be PIT? US has given up several gates at PIT.

Not enough O&D traffic. On the PIT note though, whatever happened with Project Roam? Still looking for financing?

 

[mweiss]

Not enough O&D traffic [in PIT].

Not necessarily. There's plenty of O&D available to WN, for example, if their past market introductions are any indication. There's just not enough O&D to support US's costs.

 

[Ch. 12]

Not necessarily. There's plenty of O&D available to WN, for example, if their past market introductions are any indication. There's just not enough O&D to support US's costs.

But WN does not currently serve PIT. If it is not desirable as one of WN's mini-hubs, it definitely cannot sustain a primary hub for a new carrier. Project Roam will figure this out if they move into PIT (if they ever unground themselves).

 

[mweiss]

You draw the erroneous association of

WN doesn't serve PIT -> PIT doesn't have sufficient O&D to support WN

Does that mean that, until a couple of years ago, ISP didn't have sufficient O&D? Or that California didn't until 1991?

WN is growth constrained by how quickly they can add capacity to their system. I can assure you that if WN had the capacity, they'd be quite profitable in PIT. And I'd put some major bucks on the line that they will move into PIT in the next few years, barring some other LCC establishing a solid foothold there first.

 

[Ch. 12]

I only followed your assumption that there is plenty of O&D available to WN but perhaps I mis-interpreted your post and you can elaborate for me.

The point you should get from my post is that PIT is not an ideal primary hub for ANY carrier. If WN were to go to PIT, they would have a focus city rather than a hub and would probably serve the few markets that have sustainable O&D demand (MDW, BWI, ISP, PVD, SNA, FLL, OAK, SNA??) But for a Virgin product that is hub based rather than focus city, point-to-point, PIT is a failure.

As with MCI, PIT is often erroneously assumed to be a bright spot on the radar when it comes to a hub. It makes sense that there is one airline with the lion's share of traffic and that its location is suitable as a trans-con hub. The issue with both of these cities is that there is not O&D demand sufficient enough to warrant a large hub. PIT often fails as a spoke, let alone a hub. I just disagree that it is a suitable option as a Virgin USA hub and would doubt that Branson would focus that much of his energy on forcing it to work.