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Virgin America punts A320neo from 2016 to 2020

Is Virgin America a case of too much purple, and not enough people, inside its fashionable but loss making jets?

Inside Virgin America. A case of too much purple and not enough people?

Inside Virgin America. A case of too much purple and not enough people?

A US report by Bloomberg that Virgin America has pushed back on its order for the A320NEO or new engine option jet from 2016 to 2020 will no doubt undermine traveller confidence in the carrier surviving in even the shorter term.

Virgin America has also reduced a tranche of 30 new but current versions of the A320 during for delivery in the nearer future to only 10 jets in the interim, and for the airline’s CEO David Cush to use the word ‘survive’ in an interview is a matter of commendable candor but also laden with ominous overtones.

What happens to Virgin America has no real bearing on the fortunes of Virgin Australia, which has linked itself primarily to the America’s and the world’s largest airline in Delta in a wide ranging trans Pacific-America-and-beyond joint venture.

In the past when asked whether there were any brand dilution issues for the Virgin Delta relationship in the marketing linkages between Virgin Australia and Virgin America both Richard Branson and Virgin Australia’s CEO, John Borghetti, have seen this is a plus, giving Virgin Australia customers more choice in the USA.

The choice, between the stylish quality image of Virgin America, and the massively large and pervasive offerings of Delta throughout America, has now been put under a cloud.

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  • 1
    Aidan Stanger
    Posted November 18, 2012 at 1:07 am | Permalink

    Why is Virgin America doing so badly when their Australian counterparts are doing so well?
    Is it inferior management? The extra competition? Regulations or lack thereof? The state of the economy? Or somehting else?

  • 2
    Ben Sandilands
    Posted November 18, 2012 at 6:54 am | Permalink

    In my opinion, it is the power of incumbency. Virgin knew that of course, and knows that it will take time to overcome, but in the current economic environment, when it is selling quality rather than price, it may not have the time nor the best strategy.

  • 3
    slanger2
    Posted November 18, 2012 at 8:54 am | Permalink

    I read an interesting forum about this on Airliners.net a while back, and will summarise what was written there. Basically, Virgin America are caught in the twilight zone between the corporate flyer and the leisure market. Corporate flyers are sticking with the majors because of the frequent flyer perks; points, lounges , upgrades etc. This is in combination with the fact that due to a lack of destination cities, and number of daily services, most corporate travellers will need to look at legacy airlines for a lot of their travel, and won’t bother with Virgin for the times they could travel with them.

    Similarly, they are a more expensive than the leisure airlines, and again lack frequencies and destinations. When you look at Southwest, their route structure, destinations, free bags, no change fees etc and good inflight product, it’s hard to see anyone competing against them.

    The lack of routes and frequencies I know of from personal experience. In October I flew LA- Chicago – Washington – Charleston- LA. I did LA – Chicago on Virgin America, but couldn’t fly them on the rest as they don’t service these routes. So it was onto Southwest, and they were pretty good for a budget airline.

  • 4
    2353
    Posted November 19, 2012 at 9:13 am | Permalink

    There are two issues here for VA.

    First Virgin America doesn’t have that many destinations so to match the “oneworld”, Skyteam or Star alliances (all of which have Australian connections) – VA has to team up with someone who does.

    VA also has luck & good management on its side. If Godfrey hadn’t taken the opportunity when Ansett folded, VA would have probably ended up with a route structure and operating practice similar to Tiger’s.

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