How does Virgin make a profit on $39 fare???

[chperplt]

they don't sell all their seats at that rate. Just have to advertise it to get people interested.

I think they actually do.... I took a trip from LAX to BOS a few weeks ago. I was watching their prices vs the open seats on the seat map. The price stayed at $90 each way until the day of departure and then went up, regardless of booked capacity. As the departure date drew near, the seat map went from wide open to nearly full and the flight left with just a few open seats.

The only seats they seem to sell at a premium are the exit rows and the 4 first class seats. So technically no, they don't sell all their seats at that rate; just most of them.

 

[jonjuan]

Source: http://www.virginamerica.com/va/search.do?method=thisIsHowToFly

San Francisco - Las Vegas$39
San Francisco - Los Angeles$39
San Francisco - Orange County$39
San Francisco - San Diego$39
San Francisco - Seattle$49
Los Angeles - Seattle$59
Los Angeles - Boston$99
San Francisco - Boston$99
San Francisco - Washington, D.C. (Dulles)$99
Los Angeles - Washington, D.C. (Dulles)$99
Los Angeles - Fort Lauderdale$99
San Francisco - Fort Lauderdale$99
San Francisco - New York (JFK)$99
Los Angeles - New York (JFK)$99

http://www.jetblue.com/UBF/flights/flights.asp

Ever see the F class fares on VA LAX-NYC? Try $1,500 each way. They do very well selling transcon F class and full Y tickets.

 

[jayme]

I think they actually do.... I took a trip from LAX to BOS a few weeks ago. I was watching their prices vs the open seats on the seat map. The price stayed at $90 each way until the day of departure and then went up, regardless of booked capacity. As the departure date drew near, the seat map went from wide open to nearly full and the flight left with just a few open seats.

The only seats they seem to sell at a premium are the exit rows and the 4 first class seats. So technically no, they don't sell all their seats at that rate; just most of them.

How was the flight?

 

[clickclickboom]

They dont make money they have firehosed over half a billion into this company so far.. Except for the recent small profit accounting reshuffle reduction in cash on hand.

 

[jonjuan]

They dont make money they have firehosed over half a billion into this company so far.. Except for the recent small profit accounting reshuffle reduction in cash on hand.

Give it a few more years and they'll be jblu's worst nightmare in lcc land.

 

[rigger]

If the FAA and congress really did want to fix this industry they would outlaw pricing below cost (including industry average pay for all work groups).

So let me get this right, you want the government to go into the private sector(again) and tell the person who OWNS those seats what he can and cannot do with them????

One step at a time.....you should be happy these folks can sell or hell give the seats away if that's what they want to do......FREEDOM, it really is a great concept...worked well for years!!! try embracing it in everything you do!

 

[pilotyip]

Re-reg

So let me get this right, you want the government to go into the private sector(again) and tell the person who OWNS those seats what he can and cannot do with them????

One step at a time.....you should be happy these folks can sell or hell give the seats away if that's what they want to do......FREEDOM, it really is a great concept...worked well for years!!! try embracing it in everything you do!

Wouldn't be a return to regulation? Life was good for a few pilots under regulation. There are probably 3-4 times as many pilot’s jobs in 2005 as there was in 1977. Back in reg time it was about 90% military that went to the majors. Dereg opened up a lot of airline job to non-military pilots. To return to regulation would raise ticket prices, reduce the number of passengers, and therefore reduce the number of pilots needed.

 

[labbats]

So let me get this right, you want the government to go into the private sector(again) and tell the person who OWNS those seats what he can and cannot do with them????

One step at a time.....you should be happy these folks can sell or hell give the seats away if that's what they want to do......FREEDOM, it really is a great concept...worked well for years!!! try embracing it in everything you do!

Yes I do. That's exactly what I want and nothing more. I never mentioned re-regulation. Flooding the market with below cost seats attacks our wages. Putting an end to that seems like a simple and effective fix to the race to the bottom.

 

[Metrojet]

Source: http://www.virginamerica.com/va/search.do?method=thisIsHowToFly

San Francisco - Las Vegas$39
San Francisco - Los Angeles$39
San Francisco - Orange County$39
San Francisco - San Diego$39
San Francisco - Seattle$49
Los Angeles - Seattle$59
Los Angeles - Boston$99
San Francisco - Boston$99
San Francisco - Washington, D.C. (Dulles)$99
Los Angeles - Washington, D.C. (Dulles)$99
Los Angeles - Fort Lauderdale$99
San Francisco - Fort Lauderdale$99
San Francisco - New York (JFK)$99
Los Angeles - New York (JFK)$99

Ok TG Joe -

I am not falling for this - are you the VP of Flt for Virgin - Joe H- and just trying to get your fellow FI brothers to click on the links and buy a full fare ticket on VA? Ha Ha! Good try though!

Metrojet

 

[get2flyin]

If you're really gonna ask this question then you also need to ask How does usair lose money on $600 fares?

Management retention bonuses.

 

[rigger]

Yes I do. That's exactly what I want and nothing more. I never mentioned re-regulation. Flooding the market with below cost seats attacks our wages. Putting an end to that seems like a simple and effective fix to the race to the bottom.

Not saying I disagree with the concept it's the manner..... Don't look to government for anything worthwhile (cept the military and now we tie their hands so much they are becoming sterile) GOVERNMENT IS NEVER THE SOLUTION....only the BIGGER PROBLEM. Flooding any market with anything is called capitalism it's the folks that take the risks (and steal the money ha ha ) decision to flood the market. It should NEVER attack wages unless there are folks that will allow the wages to be attacked. If I make my widget it has a set cost you make your widget it has a set cost....If I want in your market I can do 2 things....make a better widget and prove it to the market or I can cut cost and show the market mine is OK also. If I cut and you cut we eventually loose money....if my pockets are deeper or I have bigger nads than you I eventually will win cause I price you out of the market. I can loose more money longer!! now if I can treat my people like crap and cut the wage I will make some of that up...problem is if I cut to the point I can't get people...I loose cause I cant build my widget at all anymore...every industry has a bottom....perhaps we have not hit ours yet, I don;t like it anymore than you but Govt will not solve it....only make it worse!

As for pilot YIP's comments....I agree with him, what you are advocating is that....There was some good and some bad.....being unemployed and JR anywhere I go next I think this would be BAD if I was real senior I would think GOOD...and there in lies or real industry problem...we have created an entire industry of have and have not's Those who have don't want to change anything and will do nothing to help guys "pay their dues" and those that don't have want everything changed and will do anything to get in to start to "pay their dues" I think we should work on that without the Government being involved then perhaps it will be the industry like say ALMOST EVERY OTHER ONE IN THE WORLD where hard work and skill land and keep the job rather than DATE OF HIRE!!!

 

[pilotyip]

Any Aviation Management College Degreed Pilots?

If you do not sell seats below cost you go out of business. It makes the difference in the one or two seats a flight that is needed to ensure overall profitability. Anyone read Hard Landing? AAL's Crandall came up with yield management. It goes like this you sell low demand seats in advance for below cost, maybe there is 5 seats on Friday, 15 seats on Tuesdays that sell below cost. As those seats fill the price goes up. Leaving those seats empty will cost the airline $M's, and once the flight leaves those seats are like spoiled fruit at the super market, they have no value. An unused seat can not be stored, they cannot be inventoried for future use, and they are useless. In order to pay for the airplane it must fly 10-14 hours per day, it must fly Tuesday and Wednesday. These are low travel days; these are the days the flier with no schedule to keep will buy tickets to ensure the airline comes close to covering cost on low yield days. I am sure there are some Aviation Management College degreed guys who could make meaningful input to this discussion. But then again they may not wish to disclose that, because management is a four letter word on FI.

 

[FADEC]

Give it a few more years and they'll be jblu's worst nightmare in lcc land.

They don't have slots at JFK so I don't think B6 are too worried

 

[labbats]

If you do not sell seats below cost you go out of business. It makes the difference in the one or two seats a flight that is needed to ensure overall profitability. Anyone read Hard Landing? AAL's Crandall came up with yield management. It goes like this you sell low demand seats in advance for below cost, maybe there is 5 seats on Friday, 15 seats on Tuesdays that sell below cost. As those seats fill the price goes up. Leaving those seats empty will cost the airline $M's, and once the flight leaves those seats are like spoiled fruit at the super market, they have no value. An unused seat can not be stored, they cannot be inventoried for future use, and they are useless. In order to pay for the airplane it must fly 10-14 hours per day, it must fly Tuesday and Wednesday. These are low travel days; these are the days the flier with no schedule to keep will buy tickets to ensure the airline comes close to covering cost on low yield days. I am sure there are some Aviation Management College degreed guys who could make meaningful input to this discussion. But then again they may not wish to disclose that, because management is a four letter word on FI.

I've read hard landings and am familiar with the "grapefruit concept" you mention. However, I believe both are nullified when the entire industry is forced onto the same page.

Step back from the matter and ask yourself if flying on those same Tuesdays and Wednesdays at a loss is really necessary. Cut the flights to equal profit via an established minimum price per flight and let the chips fall where they may. The only real disadvantage from a pilot perspective would be having mainly Tuesdays off, yet that would be outweighed by being paid as good or better than those of a previous generation.

 

[Ben Franklin]

Step back from the matter and ask yourself if flying on those same Tuesdays and Wednesdays at a loss is really necessary.

Of course it's necessary.

You want as many bodies traveling through your operation as possible, as often as possible.

(One should study Steve Wynn's business model of the mega-casinos he's pioneered instead of wasting your time on 'hard landings')

Passengers spend money on other things while traveling through your system and, if you weren't flying them through your hub, some other airline would be flying them through theirs.

More ASM's, everything else equal, means more CA and FO positions - not fewer.

But, I am a pilot. I fly A-B safely for a price. Everything else is academic and I don't think you need a mgmt. degree to understand profit/loss and supply & demand.

Sincerely,

B. Franklin