VA- Why an Airline that travelers Love is Falling

[ROSWELL41]

Spirit is going to take another 9 airframes in the next year.
The rumor is these are VXs orders for 2013.

Are you saying the rumor is that Spirit is going to accept 9 additional frames in addition to the 9 (2 used 319s and 7 320s) that are already on the way?

 

[scoreboardII]

You hit the nail on the head, inner financial workings. You can run forever as long as papa Virgin is willing to sink an unlimited unknown sum into the mix.

 

[sstearns2]

The problem with VA is simple. Airlines make money on the long haul, large (low seatmile cost) airplane flying and lose money on short haul.

The regional and domestic system is a money loser, but nessecary to feed the big money long haul flights. That is why the domestic shorter routes are going to smaller and smaller airplanes and the seats on those flights are very expensive unless you are connecting to a long haul flight.

For example I fly LAX-LAS in 50-65 seat RJs all the time. The flights are nearly 100% asian connecting passengers. 5 years ago the LAX-LAS flights were all 130+ seat airplanes. The airline basically ditched all the low revenue weekend gamblers from SoCal and just kept the high revenue international passengers. The old United shuttle west coast flying is all done by RJs now for the same reason.

The problem with Virgin America is that they are stuck with the low revenue end of the market. VA lacks both the big money international routes and the regional feeder system. Jetblue, Spirit, etc also have this problem and as the majors regain strength those carriers will also feel the pressure.

Also Delta, American, and United can all sell their extra seats (the ones that are not sold to long haul connecting pax) dirt cheap. This technique was first used by American to kill People's Express and it is exactly how VA is being killed today and it is how other small airlines may be killed tommorrow.

Cheers,
Scott

 

[XJAVRO]

Spirit is going to take another 9 airframes in the next year.
The rumor is these are VXs orders for 2013.

That's funny considering that's more aircraft then virgin has coming in 2013.

 

[climbhappy]

what's wrong with VX is a chevrolet in a world full of Fords..?

..corp travel mgrs dont get the VX advantage..

 

[Mr. Johnson]

"The problem with Virgin America is that they are stuck with the low revenue end of the market."

Plus having so many operations in SFO, one of the worst in the country for delays and cancellations.

 

[HA25]

Virgin is a Cadillac Cimarron in a Chevy Cavalier world.

I could have written a 10 page opinion about this topic and not captured the gist of it any better. Well stated.

 

[climbhappy]

okay.........you've just been made CEO of virgin america...how do you fix the company? or get through this weak economy? or do you limp along like jetblue with a big foreign minority partner..?

united should just buy them then let them show a loss or profit..however they let the accountants disguise it.....but it would be a good brand to have in your offering....plus the pilots get a raise.....i just dont see how they can survive in a US market that has consolidated almost fully to just a handful of big players..

 

[Ky.BrownBourbn]

or do you limp along like jetblue with a big foreign minority partner..?

united should just buy them then let them show a loss or profit..however they let the accountants disguise it.....but it would be a good brand to have in your offering....plus the pilots get a raise.....i just dont see how they can survive in a US market that has consolidated almost fully to just a handful of big players..

Limp along with a BIG Foreign Minority Partner....Pot meet Kettle, Oh yeah, he's not a "MINORITY partner"

Why would United buy a losing product, they have enough problems, to get the customers, already have them...let the predatory pricing that happened into the 90's kick in and they are gone tomorrow..., to get the employees, NOPE, don't need them, I'm at a loss, why would anyone buy them?
KBB

 

[climbhappy]

i guess that's exactly whats happening....matching price, saturating their routes...it's more a slow death.....kind of like rat poisoning...