AeroBlogger

Virgin America unveiled its 19th destination today when it announced that it will serve Philadelphia from its Los Angeles and San Fransisco hubs starting in April. This announcement means that Virgin America will now serve all 5 of the largest metro markets in the USA.

Last week, the carrier announced a contest, in which people got to choose what they thought will be the next destination out of 6 choices. All, except for Bozeman, are likely targets for Virgin America service soon, assuming that the carrier continues expanding at the current rate. Atlanta, Houston, Newark, Philadelphia, and Pheonix are all major metro areas with large amounts of demand. They all also are hubs of major airlines.

Virgin America has been following the strategy of targeting the hubs of other airlines with their service. They are based in Los Angeles, a hub for American Airlines, United Airlines, and Delta, and San Fransisco, a hub for United Airlines as well. They serve United hubs Chicago O’Hare and Washington Dulles. They serve New York JFK, a Delta hub. They serve Chicago O’Hare, New York JFK, and Dallas, all American Airlines hubs. They also serve Boston and New York JFK, hubs of JetBlue.

Launching service to Philadelphia means that Virgin America will find itself a new opponent: US Airways. To US Airways, Philadelphia is a major fortress hub – an airport in which it controls over 70% of the capacity. US Airways has almost 75% of capacity and marketshare at Philadelphia. This creates a situation in which flyers from Philadelphia are held captive to US Airways because of a lack of options. US Airways therefore can price flights from Philadelphia extremely high, and passengers will have no choice but to pay the fare. This hub-captive situation is very profitable, but creates an antagonistic relationship between the airline and its passengers, a relationship that Virgin America will try to exploit.

That said, US Airways has a strong history of fighting off upstart competition from its hubs. It knocked out quite a bit of Southwest Airlines’ operation from Philadelphia just last year. It has also been successful in fighting legacy and low cost carriers alike in a variety of markets. Only time will tell if Virgin America is just another KO or if they are in for some real competition for a change.

While Los Angeles receives more flights, San Fransisco gets a better flight schedule. Both San Fransisco flights are scheduled at times suitable for premium business travelers. In contrast, there is not one flight from Los Angeles that leaves during peak travel hours.