I would call it the first act of the British invasion, but since passing the U.S. citizenship test was vital to the very existence of Virgin America, I’ll refrain.
Instead, I’ll simply say that San Francisco, which has already reaped the benefits of the Southwest effect, is now seeing airfare prices drop in what can only be dubbed the Virgin America effect. That’s right, it’s a fare war. Virgin America kicked it off and United and Southwest are fighting back. But what will happen next?
A new Reuters article about Virgin America’s fare war details the action, and even gives readers concrete examples of routes with lower fares. For instance, since Virgin America started selling tickets between San Francisco and Washington, D.C., back in July, United has dropped some of its competing fares by 20 percent. And, Southwest has added more service to Las Vegas to keep up with the new kid in town.
The article does a great job exploring the anatomy of a fare war. While it doesn’t offer concrete answers, it does offer food for thought as to whether the current dip in prices is likely to stick or if it’s just a temporary jockeying for position in a competitive market.
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