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Virgin America Heads to Dallas, Let the Brawl Begin

Finally, Virgin America has picked a new city that makes sense. It only took them a few years to get there. Starting in December, the airline will roll into Dallas/Ft Worth from LAX and SFO. Will it be successful? I have no clue. I mean, the Metroplex is littered with carcasses from American’s kills, but hey, it’s worth a shot. If Virgin America is going to work, this is a market that should work for the airline. If it doesn’t work, well, at least we’ll finally know for sure.

So why do I say that Dallas/Ft Worth makes sense? A few reasons.

  • It’s a big business market
  • There is no nonstop low cost competition to LAX or SFO
  • The 3-4 hour flight times means the Virgin America product is more relevant
Typical American Airlines Competitive Response

Now, why would Dallas/Ft Worth not make sense? It’s a short list.

  • American

Yep, that’s right. American has killed many a competitor who has tried to come into Dallas. In fact, instead of trying to create a better product and compete that way, American usually goes with the old school, full-on scorched earth strategy.

Remember when Vanguard came to town? No, neither does anyone else, because American destroyed it mercilessly. How about the Legend debacle at Love Field? Legend flew airplanes in executive configurations, and American got nervous. It actually refitted a fleet of airplanes just to go to Love Field and kill Legend. Once that was done, the airplanes were reconfigured and sent back into the main fleet.

We can also look at more recent events at Love. Remember when Missouri got approved for nonstop flights from Love Field? American wasted a ton of money going into the market just to compete with Southwest. Now, winning against Southwest is a hard thing to do, and American failed, but that’s one of the few times that American hasn’t won in Dallas. Is Virgin America up to the task?

It has an advantage over other failed efforts, that’s for sure. The airline has built up a nice little following in San Francisco, so it has a base to pull from. Meanwhile, American has been retrenching in San Francisco, most recently dropping Boston. In LA, it’s going to be tougher. American has called LA a key part of its strategy, but it actually hasn’t done anything new in the city for a long time. Maybe this will kick start American to finally do something there.

But competing with American is going to be virtually impossible for the serious business traveler. Virgin America will have two measly flights per day in each market. American has 16 a day to LA and 9 day to SFO. There’s just no comparison. But United has two a day in each market as well, some on tiny CRJ-700 aircraft. Virgin America should compare quite favorably there.

The real question, however, is how will American react? There’s no question that fares will be matched, if not undercut. I would assume there will be some huge frequent flier promotion and probably a bulking up of schedules. American will do anything to protect DFW. This may even push it to fight in other markets as well.

So, this puts us in a good place for seeing if Virgin America can actually make a go of things. The airline is finally entering a market that it should be serving, considering its previous strategy of big city business markets. It offers a much better product than American, which doesn’t even offer an overhead screen on half the flights in these markets. But can it survive American’s scorched earth tactics? We’ll finally find out.

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