Virgin America

Virgin America targets US Airways with launch of Philadelphia service in April

Virgin America will continue its strategy of targeting fortress hubs with service to Philadelphia commencing in Apr-2012 from Los Angeles and San Francisco. Virgin America will take approximately one-quarter market share on both routes at the main expense of Philadelphia's hub carrier, US Airways. Philadelphia is a key step in the development of Virgin America's network as it will give the carrier service to all five of the largest metropolitan areas in the US and eight of the top 10, with only Atlanta and Houston still missing from its network but likely to be added before the end of 2012.

Virgin America's first flights to Philadelphia, its 17th city, will arrive on 05-Apr-2012 with double daily service from Los Angeles on the carrier's 137-seat A320s. A third daily frequency will be added on 01-May-2012. Services from Virgin America's San Francisco hub commence 10-Apr-2012 with one daily frequency, increasing to double daily on 01-May-2012.

Virgin America closes 3Q facing stiff headwinds for 2012, but still breaking even

As most of the US airline industry was collectively earning over USD1 billion in the third quarter, Virgin America joined Southwest and American in posting losses. The San Francisco-based carrier posted USD3.3 million in losses – a paltry sum compared to the USD140 million loss at Southwest, and relatively positive news considering the airline's overall financial performance.

The story for Virgin America was much the same as for the rest of the US industry and is likely to be repeated in the fourth quarter and the new year. That story is a frustrating one of rising revenue on falling profits, meaning costs often outstripped revenues.

For its part, Virgin posted an operating profit of USD16.2 million for the third quarter resulting in a 5.6% operating margin, the carrier said, which was down 4.8 points from 3Q2010, when Virgin posted its first net profit, indicating the carrier is still working towards sustainable profitability.

US airlines’ ancillary revenues continue to grow, but at a slower pace for legacy carriers

The US Department of Transportation (DoT), through the Bureau of Transportation Statistics (BTS), has released second quarter data which provides some interesting numbers for consideration. Looking at the ancillary revenue collected by carriers, we find that the amounts collected continue to grow, but for most legacy airlines at a slower pace. The overall year-on-year total increased only 5%.

However, passengers flying Spirit had a quite different experience and despite its general “no fees” image, Southwest has increased its take from fees by 10% over the year.

Slots continue to make news in the US, first at New York and change comes to SFO

The US aviation landscape is again being affected by the scarcity of capacity in two of the nation’s important metro areas. Last week the FAA gave its blessing to the slot swap between Delta and US Airways at New York’s LaGuardia and Washington’s Reagan.

Virgin America caps the theme for US carriers in 2Q2011: falling profits on rising revenues

After losing approximately USD40,000 in the first quarter, Virgin America continued its loss record in the second quarter with USD21 million in net losses, worse than the USD15 million posted in 2Q2010. The airline cited rising fuel costs but, as with its peers, said its operating loss - USD5.6 million - came on rising revenues. Yield alone rose 12.1% to 12.17 cents. The disclosure of Virgin’s financials brings to a close the second quarter reporting season which had but a single theme - falling profits on rising revenues - as fuel conspired once again to test airlines.

Virgin America’s David Cush says the airline's unique formula will drive success

There is an assumption that all new airline startups are built on the model pioneered by Southwest: low costs, low fares and simple operational models. While true much of the time, there are instances when a low cost platform has been the basis for an upgraded product. Such is the case at Virgin America, the US bearer of the Virgin brand and designed to provide a distinct type of service to the market.

In an extended interview with Virgin America’s President and CEO, David Cush, he summarised the airline’s appeal by stating that, “With us, you always get a good ride”.

That is a claim generally substantiated by overwhelmingly positive customer responses as well as a lengthy list of awards already collected by the 4-year-old carrier.