Where Will Virgin America Fly Next?

I’ve been a big fan of Virgin America since their launch.  The in-flight experience is top-notch, the service is great, they’re based at SFO (my home airport), their eleVAte rewards program is revolutionary, and best of all – they’ve got great fares.

And that’s just a consumer perspective.  From an airline industry perspective, all of those things are even more impressive.  Plus most of the colleagues I know who either work or have worked there are smarter than the average airline bear.  The bigger question is whether they can continue to offer more for less and still be profitable.  It wasn’t long ago that JetBlue was in a similar situation, and their decline has to do with more than just winter ice storms.

More on all of that later.  For now I wanted to focus on Virgin America as a Travel 2.0 company, and specifically how they’ve engaged social media.  They’ve done a great job building up followers on Facebook (over 20K fans) and Twitter (over 15K followers).  In comparison, that’s still not quite as many Twitter followers as JetBlue (503,671) or even Southwest (26,855), but substantially more than the world’s largest airline, Delta (just 749).

Keep in mind that Virgin America is a smaller and newer airline than any of those other carriers, but it’s creatively using Web 2.0 to help figure out where its new passengers will be coming from.  I’ve seen similar promotions from airlines in the past, but I can’t remember them ever sharing the results.

Virgin America did just that on their Facebook page yesterday, capping off a month where they’ve already held an in-flight online chat with Vegas techno act Crystal Method, as well as posting some fun photos from their recent SFO-SNA launch:

The results (in order) are below, and can also be found here.

1. SFO- Chicago
2. SFO- Honolulu
3. SFO- Miami
4. LAX- Miami
5. SFO- Portland
6. LAX- Chicago
7. SFO- Phoenix
8. JFK- Miami
9. SFO- Denver
10.LAX- Portland

Here’s my 2 cents on when/if any of these new routes will take off:

1. SFO- Chicago
6. LAX- Chicago

I’m guessing many of these people are like me – San Francisco travelers who are sick of United.  I was eager to cash out my United miles and cast all my chips with Virgin as soon as eleVAte came out, and that’s turned out great – I promise that I’ll devote a whole blog to eleVAte sometime before the end of the week.  Anyway, this route is dominated by United (10 nonstops/day), followed by American (5) and Southwest (3).

United is generally very protective of this route, as it connects two of their hubs.  I heard a rumor from a reliable source last summer that this was going to be Virgin’s next flight, however they surprised everyone by starting SFO-Boston in February, followed shortly thereafter by LAX-Boston, and most recently last month’s Orange County launch, featuring Shaun White (above), MC Hammer and Lamar Odom.  Editor’s note: Not a single Boston route made the top ten on the proposed list.  This may or may not have something to do with MC Hammer’s absence from that launch party.

Verdict: I think this route is inevitable regardless, but don’t know when will it happen.  The SFO-SNA flights caught many people by surprise, and sent a strong signal that VA was looking to compete head-on with Southwest in one of their strongest markets (many Southwest sales specifically exclude SNA, given its dominance at that airport).

With the exception of Vegas, Virgin is currently only flying to East and West Coast cities (and Vegas is essentially West Coast), so they’re going to need to make inroads in to Middle America soon.  Also, given the nearly $100-drop in fares on this route over the past year, I think that other airlines see it coming.

I’ll predict that VA will at the very least announce service to CHI before the end of the year, although if the economy continues to struggle then I wouldn’t be surprised to see the flights not starting until 2010.  Given how they’ve rolled out their other flights, it’s safe to assume that SFO-CHI would come first, followed a few weeks later by LAX-CHI.

2. SFO- Honolulu

Interesting, but I’m not so sure about this.  VA did send a signal that it wants to compete on Mexico routes last February when it applied for rights to fly LAX-SJD.  Those rights were eventually awarded to United, and given the Swine Flu hysteria, I doubt that VA is rushing to get in there anytime soon.  That may mean that they’d be interested in flying to Hawaii instead, but I wouldn’t hold my breath.

Although this would be a popular leisure route, it’s not very lucrative for premium class travel (First Class and Main Cabin Select), and has limited inbound potential for HNL-SFO.  United already flies SFO-HNL daily, as well as to the other islands, and Hawaiian also flies to HNL from all 3 Bay Area airports, plus Sacramento.  Until the economy (and subsequently leisure travel) pick up, I wouldn’t count on this.  Just because people voted for this route doesn’t mean that they’ve got the time and money to actually take that trip.

3. SFO- Miami
4. LAX- Miami

In the interest of full disclosure, I voted in this survey myself, and I voted for SFO-MIA.  I don’t even have any real need or interest to fly that route, hence my feelings on those daydreamer SFO-HNL votes.  However, I did used to have to fly from the Bay Area to South Florida for work a couple of times of year at my old job, where my only nonstop options were American (SFO-MIA) and JetBlue (OAK-FLL).

I have nothing against American – they’re just mediocre, and if I have any loyalty to a mediocre airline it would be United since they offer more flights to/from SFO.  I prefer carriers such as JetBlue and Virgin that offer inflight entertainment, especially on long cross-country flights.

I live much closer to SFO than OAK, and one time I had a meeting right across the street from MIA.  I still chose to fly JetBlue home from FLL-OAK simply because it’s such a superior experience to carriers such as American, not to mention the fact that it was cheaper.  Plus it’s so much easier to return rental cars right inside the terminal at FLL as opposed to offsite at MIA, it arguably doesn’t take all that much longer on that end.

Prediction: Miami is a jet-set market that fits in perfectly with VA’s demographics.  It’s just as likely to be their destination as Chicago is.

5. SFO- Portland
10. LAX- Portland

Very interesting, because SFO-PDX has historically been one of the most overpriced routes on the West Coast, with fares ranging from $200-$275 over the past year.  In contrast, SFO-SEA fares now cost half as much, primarily because Virgin shattered the price floor when they began flying this route last spring, as they also did between LAX-SEA.

Unfortunately Portland isn’t nearly as big of a corporate market as SEA is, which limits the demand for lucrative high-yield seats (ie: First Class).  However, it shows that VA has done a great job of branding on the West Coast, and that California hipsters are fascinated by Portland.

I’ll admit that I’ve now lived in SF for 11 1/2 years and have never been to Oregon, mainly because it’s too far to drive for a weekend and usually too expensive to fly.  We’re heading to Seattle for Memorial Day Weekend because we got roundtrip flights for about $100/apiece, and if we could ever get something like that to PDX then we’d be up there in a heartbeat.

There are also plenty of Portlanders who’d gladly come visit California under the same logic.  Strictly from an anecdotal experience standpoint, Portlanders are some of the most well-travelled people per capita of any US city.  The local tourism boards in SF, LA and Portland would be wise to get together with VA to make these flights happen, as the other carriers have proven that they have no interest in promoting attractive leisure fares to/from PDX.

7. SFO- Phoenix

Given the number of flights already in the market to PHX from all 3 Bay Area airports on US Airways, Southwest and United, I definitely don’t see this happening in the current economy.  Of course I could say the same thing about PDX (where Alaska Airlines dominates the market locally), which is also much smaller than Phoenix and would thus arguably have less potential.

8. JFK- Miami

The most interesting route on the list, simply because it’s the only one not to/from the West Coast, where VA’s brand is clearly strongest.  This is also arguably an oversaturated market, especially when you consider all the flights out of Newark on Continental, not to mention plenty of other regional service such as JetBlue’s nonstop HPN-FLL flights.

While it is another potential jet-set route perfectly catered to VA’s target customers, the oversaturation creates unloyal customers who are focused on price.  VA has certainly shown the willingness to be extremely aggressive on that front on similar West Coast markets such as SFO-LAS, but that was arguably more of a marketing/branding decision as much as it was a revenue decision.

VA currently flies from both SFO & LAX to 3 East Coast cities (New York, Boston and DC), as well as JFK-Vegas.  It appears that JFK would likely wind up being their East Coast hub, but expect an official decision to be made on that first before they announce what would potentially be their first non-West Coast flight.

With three proposed routes in the top ten, things are looking good for MIA to be VA’s next new destination.  It’s reasonable to assume that SFO-MIA & LAX-MIA would come first, but you never know in this business.

9. SFO- Denver

Like SFO-ORD, this is another route dominated by United, and has thus been traditionally overpriced.  Even with Denver-based Frontier Airlines (a supposed Low Cost Carrier) flying to all 3 Bay Area airports (plus Sacramento), fares prior to 2007 were typically well over $200, if not $300 roundtrip.  That started to change 2 years ago when Southwest began flying between Denver and Oakland, finally dropping them under $200.  As Southwest expanded its network to also include both DEN-OAK as well as DEN-SJC service, the price floor was again shattered.

However, I’m not so sure how well that’s doing for them.  I flew Southwest to/from Denver recently, and the flighst were maybe half full, even during peak leisure weekend hours.  I wouldn’t expect VA to start this route if Southwest is already struggling with it, even while offering the lowest rates for it in years.

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