Virgin’s Maiden Flight to Hawaii
Details on Virgin’s Maiden Flight to Hawaii
A new carrier flew to the Aloha State on November 2, 2015. This carrier was Virgin America and it was Virgin’s maiden flight to Hawaii. The route was from San Francisco to Honolulu. It also started flying to Maui’s Kahului airport on December 3, just in time for the Christmas holiday. Famous British entrepreneur, Sir Richard Branson founded Virgin America. People know this Bay Area airlines for its trendy and high quality, but low price flights.
What further distinguishes Virgin America’s services is their highly rated frequent flyer program, Elevate. They also differentiate themselves through their high level of overall customer satisfaction. Virgin America is a relative small airline in the US. But customers rate the company among the top airlines in the country. The 2015 Airline Quality Rating report ranked Virgin America the highest in consumer satisfaction.
Rationale for Entering the Market
Virgin America’s CEO, David Cush, used the words “prime aspirational destination” in describing Hawaii. One could interpret this as: this is where Virgin America’s customers want to go to. And indeed, industry analysts are saying many Elevate frequently flyer program members want to use their miles for flights to Hawaii. It’s probably not a good business move to base a carrier’s expansion solely on the desires of its frequent flier members. But there may be good economic justifications for Virgin America’s expansion into the Hawaii market.
Virgin’s West Coast Positioning
There is a lot of competition in the Bay Area for Hawaii flights. But Virgin America’s high quality, low cost approach could make it stand out against other competing carriers. Flights to Hawaii are relatively long in duration, typically 5 hours-plus. So Virgin America’s larger leg room in coach and first class seating will certainly stand out. As an example, Virgin America’s new A-320’s Airbuses will only have a 145 seat configuration. While some other competitors may be packing up to 177 seats in comparable narrow-body flights. Another factor helping Virgin America is 80% of fliers on California to Hawaii flights come from California. Additionally, California has historically been the state where most of Hawaii’s mainland travelers come from.
Only time will tell if Virgin America’s business approach will work. It’s been pretty clear that a pure bottom-basement unbundled price approach to the Hawaiian market, did not. This is what Allegiant tried to do. It’s also clear that the direct point-to-point expansion by Alaska and Hawaiian is a workable business model. One wonders as Virgin gears up and as Allegiant slowly bows out of the market, what lies in store for Southwest Airlines. When it decide to join the growing list of US airlines that now offer Hawaii airfare? We’ll certainly tell you when it does.