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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39 Comments on "Virgin America Heads to Dallas, Let the Brawl Begin"

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Ex AA
Guest

Cranky- This will be especially interesting given David Cush’s history with American. He was heavily involved in the successful competitive response to AirTran entering DFW-LAX and the Wright Amendment fight. When AirTran entered the market, AA went nuclear very quickly and I imagine that they will do the same this time around.

Bradley
Guest
Interesting points with Cushing. To add, this may also be a preemptive strike at the Post-Wright Southwest product several years away. Why would VA stop with LAX and SFO and not also connect all their existing markets out of DFW in the future before Southwest can do the same out of DAL? One thing is clear, Branson and Cushing are not going away, and it is also becoming clear that targeting major cities with both large populations of leisure and fringe (perhaps not so loyal) business travelers captures just enough revenue to build the base for future growth in the… Read more »
Eric
Guest
I love the graphic as well btw. This is a curious move given Cush and his connections to his former Lord and Master, AMR. I do not want to sound like a conspiracy theorist … but could this foray into the DFW market have AA’s blessings??? Look at the industry-wide ‘huh?” when AA announced their quasi-partnership with B6….they are leveraging a competitor’s cost advantage to provide feed that they can not do economicly on their own. Think about it; AA has had their @zz handed to them, twice, on the west coast (OC & Reno) . What better way to… Read more »
MeanMeosh
Guest

As a long-suffering traveler based out of DFW, I say – BRING IT ON!!!

Cale
Guest

Who is the meanest of all? American…or the late Northwest? I’ve got to go with NWA. Who else would try and set up a remote hub (Reno) to kill an entire airline just because it added two flights into your home hub (MSP)? Who started non-core routes (DEN-LAX is an example) to retaliate for two non-stops into your home hub (Frontier LAX-MSP)? Northwest was brutal!

RB
Guest

Or more recently smothered ATA in their hometown of IND…

David SF eastbay
Member
There will be people who will fly American and those that will fly Virgin America. The big mileage holders will still with American no matter what the service is like, and others may chose Virgin America to see what it’s like and to sample the inflight service. With only two flights in each market, AA doesn’t have to worry about Virgin America taking all it’s business away. The only thing it may do it get AA to use select aircraft for the routes and improve the inflight product on those aircraft. Still not sure why Virgin America hasn’t been going… Read more »
Elizabeth
Guest

I’ve enjoyed seeing the pictures that you put on your posts, Cranky, but this one made me laugh out loud. It really shows just how aggressively American likes to defend its territory.

uday.unl
Member

Though some articles are too dense. But I just love your images for articles. They are just too funny!!

christiandulin
Member

what she said. awesome pic.

A
Guest
Any news if VA is going to add flights from DFW to places east? I know to some the world revolves around LAX & SFO, but to the business traveler it would be nice to connect big business centers of the mid-west to those on the east coast. I’m surprised VA didn’t pick IAH, just because it’s a similarly sized metro without the AA problem. That said, all of Texas has pretty good competition from WN so I don’t think AA really has the monopoly that people think they do. I agree with Cale that MSP was held hostage moreso… Read more »
MeanMeosh
Guest

According to the article in the Dallas Morning News yesterday, no plans to go east right now, but they did leave the door open to doing so in the future.

Marty Near DFW
Guest

Hi, A,

AA has 80-85% of the flights in and out of DFW. I’d say they have a monopoly here.

=M=

Nick Barnard
Member

I wonder if Branson is wanting a big fight with a legacy carrier, al la VA’s fight with BA.

David SF eastbay
Member
Maybe AA doesn’t care to worry about Virgin A. coming to Dallas. It’s more worried about Delta in New York. Besides getting chummy with jetblue, they announced today a sweepstakes highlighting New York City in partnership with NBC Universal. They don’t have to worry about Virgin A. in DFW, they have to worry about giant Delta in New York. Maybe Virgin A. is counting on that and saw that this was the right time to enter DFW. http://www.aa.com/nbc to take the New York/AA quiz to enter or just to watch the promo video. I don’t watch network TV so assume… Read more »
jon.fjalstad
Member

Nicholas is on to something here. I agree that this move is related to the VA/BA competition and recent alliance approval.

Dr. Dre
Guest

I wish they would have come to Houston – however, face off with CO/UA at IAH or WN at HOU. That would have been interesting, to say the least.

JamesK
Guest

It’s also worth noting that between American and Southwest, even Delta got squeezed and finally gave up the DFW hub. How soon we forget…

David SF eastbay
Member

And remember the second ‘new’ Braniff (or sould that be said as Braniff-3 ???) even left Dallas and moved their hub to Kansas City. They were an old home town name with a following and had to leave to try and make it.

But then again maybe some of the locals are just tired of AA and want someone new to try. A hub carriers terminal(s) can be a nightmare to deal with compared to a carrier with a few flights and 1 or 2 gates.

eponymous coward
Guest
If you look at what happened the last time VX did something similar, you find something interesting. VX started LAX/SFO-SEA, AS retaliated… and a couple years later after the fare wars (you could fly round trip SEA-LAX for less than $100, which was nuts) AS is there, VX is there, but the airline that shrank their service was UA- they completely took mainline off LAX-SEA (RJ-only), and they fly a number of RJs now on SEA-SFO. I think the same thing might happen here- UA already flies RJs on LAX-DFW, and is merging with a company (CO) that LOVES to… Read more »
eponymous coward
Guest

There’s also the factor that I would guess that the combined UA/CO will replace some DFW-SFO/LAX connecting service with connecting people through IAH, especially as 787s come online.

RB
Guest

DFW to SFO/LAX is to feed Asia so it is doubtful it will go anywhere. The CRJ-700 on that haul is a pretty lousy plane to draw the high yield paxs though.

eponymous coward
Guest

Keep in mind CO flies IAH-NRT and has Air Mike feed from there…

Scott Laird
Guest

Right on the money (and I laughed out loud at the photo too). Let us not forget AAdvantage members are some of the most maniacal (they’re almost as bad as Mileage Plus devotees). I’m surprised we haven’t already seen a quadruple miles from DFW-LAX/SFO offer. If AA wants VX out of Dallas, it’ll happen.

Marty Near DFW
Guest

Hi, Scott,

It looks like AAdvantage Elite will get our Double EQM promotions this year after all…!

=M=

Bill Fesperman
Guest

A little bird says that Frontier moving to HOU is a prelude to Virgin adding service to IAH as well. Branson was in Houston when the announcement was made. This begs the question, if Virgin goes up against AA and CO to the west coast can they make money?

BCH in NYC
Guest

You wonder if VA’s startup in DFW can survive AA’s ‘scorched earth’ tactics. I wonder if–and hope that–the newly combined presence of Branson’s enterprise with the ever-popular WN in the Greater Dallas-Ft Worth market will revive the battle against the so-called revised Wright Amendment, perhaps even dump it and its niggling limitations entirely, so that truly competitive service can begin at Love Field. Anything else is indefensible.

MeanMeosh
Guest
Only problem is, Wright is already scheduled to die in 2014. And even after it does, I’m skeptical that anything truly transformational will happen at Love. Remember, as a kickback to the militant neighborhood associations around Love Field, they agreed to demolish the old Legend Airlines terminal and cut the number of gates to 20 permanently. You think WN is going to be willing to give up some gates to share? You might see increased frequencies on some routes, and maybe a few new routes like DEN, MDW, LGA, etc., but even then, it’s probably only a matter of time… Read more »
million miler
Guest
Quote from Dallas Morning News article “with the very accommodating position of D/FW Airport and their willingness to meet our needs…” I think the real question is what did DFW have to offer to make this happen? They have been after Jet Blue for years, at one point even had a commitment that as the Embraers entered the Jet Blue fleet that there “was an aircraft with DFW’s name on it” My guess is that there is enough incentives in this to make it worth trying. Unless they can really catch on, they will be gone as soon as the… Read more »
Spirit FF
Member

This will have very little impact for AA. Remember, AA’s goal of SFO traffic is to connect beyond DFW. Virgin’s goal is local traffic – they will be able to co-exist. Keep in mind, business travellers like frequency – I’m not sure two flights will have an impact. If and when Virgin goes to 4 flights or more, AA will respond with a full court press – possibly adding 777s on the route and flood the market with capacity.

It will be nice to see Virgin, but I am a customer of the Star Alliance carriers!

Chuck
Guest

This seems like a good route for VA; it strikes me that all too often they pick their routes to cities that are considered “hip” rather than ones that make good business sense. However, I really can’t see them winning in a head to head war with AA…but I suppose time will tell what happens.

Mark
Guest

Well I don’t know what the actual numbers are, but its been a year, and just by word of mouth, VA is winning the DFW turf war! Loyal is right. Dallas likes things to look new and nice. And Virgin is just that. Consider me a new cult follower. AA is great, but they can stick it.

PS. Feel free to have a price war indefinitely for the next 10 years. I love Dallas! lol!

J Mills
Guest
The biggest difference this go around is AA is so close to bankruptcy and practicing tactics like this is what got them into this situation in the first place…. It’s backwards thinking… Why businesses forget the golden rule, I’ll never understand. Focus on your product and employees, make them happy, who in turn make the customers happy, meaning happy employees, happy customers. Instead, you have miserable people who you tell to all take pay cuts, they are miserable and in turn, tray the customers like crap. You get so focused on trying to making a profit by adding fees and… Read more »
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