Virgin America Tries a New Tactic: Mexico

It’s been awhile since we’ve heard about any new routes from Virgin America, so when I saw a press release saying that they were applying to fly from LA to Cabo, I felt compelled to write.

08_02_20 vxmexicodartsCabo?!? Are they really that desperate to find a place to fly?

This is the second time they’ve jumped in on a route after Frontier has abandoned it. The first was LAX-SFO, and that one hasn’t fared too well so far. At least, that’s the case through the DOT’s recently released November data. The airline only filled 58.7% of seats on that route that month. (Other markets don’t look so good either – the best is LAX-JFK with 68.7%, and JetBlue will be starting that soon.) And this isn’t just historical. I’m assuming that trend is continuing because I’ve seen a lot of cheap fare sales coming out of the airline lately.

So, we’ve seen them shift away from their original transcon idea more toward the short hauls, and now they’re going international. It seems to me they’re just throwing ideas against the wall and seeing what sticks, because this doesn’t seem to be a very cohesive plan.

Why would an airline that has shown interest in serving major business markets all around the US decide to go to an already over-served, leisure-oriented Cabo market? Have they run out of good options in the US already? This does not make sense. They’re flying to a short-haul vacation market that has the added complexity of being international. That means you need to arrange for customs and immigration, and you have to hope that your homegrown IT system can handle international travel. Oh, and those low fares? They don’t look so low after you pile on those international taxes. And of course, live tv doesn’t work down there either.

Maybe it really is just a case of “jumping on the opportunity.” The bilateral agreement with Mexico allows for three carriers from each country to fly this route. Currently, Alaska and American both fly it twice daily from the US and Mexicana flies it from Mexico. Frontier has been flying it, but they’re giving up and that’s why this new authority is available. United has applied for it with the possibility of connections throughout California, and now Virgin America has jumped in with only a couple connecting opportunities that are already well-served.

But as I’ve said earlier, this market really doesn’t need another carrier in it. CEO David Cush says “Since it was a low-cost airline that is giving up the right to fly to Cabo, we think it would be ideal for another low-cost carrier to take its place.” Um, so since it was a low-cost airline that failed in Cabo, does that mean another low-cost carrier should follow in its footsteps?

08_02_21 chewbaccadefenseAfter that statement, he should have added, “Look at the monkey. Look at the silly monkey.” Yes, as a friend of mine said, this a prime example of the Chewbacca Defense. That’s right. It just does not make sense.

Do they have a strategy right now that I’m missing? Someone please help me see the light, because it’s looking pretty dark to me right now. From what I can tell, the best success they’ve had is with their tiny first class cabin. It would seem to me that you’d want to start focusing on what’s worked for you instead of going into a market where first class isn’t going to matter at all.

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