Virgin America Prepares For Transcon Takeoff Next Month

The U.S. Department of Transportation this month approved Virgin America's application to begin selling tickets, crossing one of the last hurdles to the carrier's launch after months of obstacles. At press time, the carrier intended to begin selling tickets late last week, with its first flights set to commence in August. Virgin America expects to serve as many as 10 cities within a year of operation and up to 30 cities within five years.

Virgin America on Aug. 8 plans to launch its flagship route between San Francisco and New York JFK, as well as service between SFO and Los Angeles International. Beginning Aug. 29, the carrier will launch LAX-JFK service, and on Sept. 26 will serve Washington Dulles from San Francisco. In October, the carrier will commence service between San Francisco and Las Vegas, as well as LAX and Dulles.

Vice president of planning and sales Brian Clark characterized Virgin America as a "hybrid carrier" between low-cost airlines and legacy operators. He said Virgin America would court the corporate market with lower-than-legacy fares, a two-class configuration heavy on amenities and global distribution system participation. Virgin America conceded it might take some time to establish itself in the corporate market.

"Generally speaking, we expect a lower mix of business travelers at the outset, but as we grow we certainly hope to see that mix grow toward the business traveler," Clark said. "At the outset, I don't think we can expect to have a big number of preferred contracts. We're not going to be big enough to be relevant to some of the biggest accounts, but we're hopeful to find some like-minded customers that will find some value in the markets we'll serve initially. Within those markets, they'll find a lot of benefit in the pricing that we're going to offer, combined with the product and service we're going to offer."

The carrier will sell its fares—all nonrefundable but available for credits if unused—starting at $44 each way for coach and $149 each way in first.

"Our highest coach fare will start with a three," Clark said. "Generally speaking, we will offer some very attractive walk-up fares or business fares for folks that are buying tickets within seven days. To buy a transcon ticket, it will be a JetBlue type of ticket for our main cabin. Even more special, from our perspective, is our first class cabin. We're going to drop our first class fares and even try and sell first class up to 50 percent below walkup coach fares on legacy carriers."

Clark said upon launch, its focal point of distribution will be its Web site, "but for the corporate market, we will on day one have one GDS partner and we will have one online partner," using Galileo and Orbitz, which includes Orbitz for Business, Clark said. "They will be our exclusive launch customers."

The carrier said it is in "discussions with many, many different partners," including the other global distribution systems. "We're looking to do deals that are good for them and good for us. Those deals are ongoing. We'll have a larger GDS presence if the price is right."

The carrier offers eight first class seats on each flight with 55 inches of pitch and a 165-degree incline, while the bulk of its coach cabin will have 32 to 33 inches of pitch. Clark said bulkhead and exit rows boast seats with 39 inches of pitch, "which is larger than a first class seat on many legacy carriers," Clark said. "You'll be able to purchase those for an additional $25 above your fare and on short-haul, it will be $15."

Clark said each seat offers a power port, USB port and 9-inch widescreen television monitor with movies on demand. Wi-Fi also is on tap.

"Our planes are pre-wired for broadband, so middle or late next year we hope to fire up wireless and productivity is at your ground-based levels," he said.

Through the carrier's frequent flyer program, called Elevate, travelers can begin accruing miles upon the carrier's launch, but Virgin America likely won't enable point redemption for the next six months, Clark said. Travelers accrue five points per dollar spent on the fare.

"It's a unique program in North America," Clark said. "It's revenue-based, rather than being miles- or segment-based, which we believe are outdated and really not applicable when fares are the way they are."

DOT in May approved Virgin America to launch service, following months of negotiations as to the carrier's compliance with U.S. laws governing foreign ownership of domestic carriers. DOT in March tentatively had approved the Virgin America venture after Virgin agreed to replace CEO Fred Reid, who the government saw as too close to foreign investors, and loosen parent company control, such as the ability to veto certain contracts and spending. Virgin America said Reid would step down by November, when the DOT ruled it would have to switch its leadership.