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Posts tagged capacity

Virgin Atlantic is shifting their seasonal Chicago-London Heathrow flight to Los Angeles, giving them three flights a day between LAX and London.

Business Traveller, which reported the story, has some “interesting” insights into why Virgin Atlantic is shifting the flight.

Another, perhaps more important, reason is the possible yield (earnings per seat) and the fact that the low-cost carriers haven’t made as many inroads into the West Coast as they have with the East Coast market.

I am not really sure how they come to that conclusion. Carriers like Condor and Norwegian have inundated the west coast and focused heavily on the leisure markets. Because of this, transatlantic fares from places like San Francisco have fallen dramatically. British Airways is even trying to get in on the act by adding a flight to Oakland on one of their high density Boeing 777s.

The reality is that the transatlantic market is overall pretty weak right now and Virgin probably can’t get a lot of connecting traffic in Chicago. In Los Angeles they have their partnership with Delta, giving them great connections all over points west of the Rockies. Delta is also building a new terminal LAX and I’m sure that’s a big draw as well.

Personally, I’m not sure Virgin Atlantic will be successful with a third flight to Los Angeles but only time will tell.

As Jon Ostrower from the Wall Street Journal reports:

That means Alaska will have 349 aircraft at their disposal after all deliveries are made and the merger is completed. That is a huge increase for them and even with the retirement of 15 Bombardier Q400s by 2018, they will still have a very big fleet for the size of the operation they are running now.

Route growth has to be on the horizon then (no pun intended). With the Virgin America merger it is clear that Alaska will increase their presence in San Francisco. I would not be surprised to see them keep Virgin America’s transcontinental routes to JFK and Boston but I could also see them flying a number of west coast routes that are underserved by United, Delta, and American.

The big unknown is what happens to Alaska’s presence at Seattle. They have the planes for growth but Seattle is already overcrowded and I don’t know that Alaska has the gates to start a whole of new flights. I guess theortically they could park the E175s at the regional gates and have passengers walk outside to the planes, but even that area is a mess during the morning and evening rush hours.

This could also mean the end of the contract that Alaska has with SkyWest for operation of CRJ-700 and E175 regional jets to a number of destinations. SkyWest currently flies routes like Seattle-Milwaukee and Portland-Austin on E175 and Portland-Tuscon with CRJ-700s. To responsibly grow, Alaska may start operating those routes with their own planes and pilots via the Horizon Air subsidiary.

All of this to say, it is going to be interesting to see a rather niche carrier like Alaska navigate the waters of huge growth without overextending themselves in terms of passenger capacity and the physical limitations they will face at Seattle and Portland.