ANALYSIS: Virgin America driving capacity gains on US domestic

Washington DC
This story is sourced from Airline Business
Subscribe today »

Many have heard of the so-called Southwest Airlines effect or even the recently coined Spirit Airlines effect, but what about the Virgin America effect?

The Burlingame, California-based low-cost carrier, and its competitors, are behind the four largest capacity gains on domestic routes in the USA from October 2012 to October 2013 Innovata schedules show.

asset image

Virgin America launched flights between Newark and both Los Angeles and San Francisco on 2 April. Shortly thereafter United Airlines increased frequencies on both routes to 14 from six and 16 from seven daily, respectively.

Monthly seat capacity jumped 73% on Newark-Los Angeles and 59% on San Francisco-Newark during the year.

Similar trends occurred on the Los Angeles-San Jose, California, route where monthly seat capacity increased 53% in the past year. Both Delta AirLines and Virgin America announced that they were entering the market with multiple daily nonstops on the same day in February, joining United and Southwest on the route.

Austin-San Francisco is no different. Virgin America announced new service on the route on 12 February that was followed shortly by additional capacity on both United and JetBlue Airways.

asset image

Whether these routes can support the capacity increases – and likely resulting yield erosion – from the new flights remains to be seen.Routes impacted by consolidation among US carriers saw the opposite trend. Capacity was cut 23% between Newark and Phoenix during the year, a trend that can likely be attributed by US Airways – the dominate carrier on the route – shifting away from its long-standing alliance with United towards its proposed merger partner American Airlines. American is larger at New York’s John F. Kennedy and LaGuardia airports.

Similarly, monthly seats were down 14% from Atlanta to LaGuardia and 9% from Atlanta to Philadelphia – two routes that have likely seen schedules juggled by Southwest as it integrates AirTran Airways into its system and optimises aircraft operations. The carrier could be shifting LaGuardia slots to other routes in its system while it has cut capacity in Philadelphia by more than a quarter during the past year, Innovata FlightMaps Analytics shows.

The 8% decrease in capacity on the Honolulu-Kahului route is likely to due to a shift in capacity on the primary inter-island carrier Hawaiian Airlines.

(This article was updated on 5 October with revised data tables)