Delays thwart Virgin America's first flight
As the new airline gears up for its virgin voyage, there's one thing that's certain to fly: The buzz surrounding the low-cost carrier's initiation into American skies.
NEW YORK (CNNMoney.com) -- After years of preparation and planning, Virgin America finally took off Wednesday, despite delays caused by a summer storm in New York. But whether all the hype surrounding the new airline is anything more than hot air remains to be seen.
For its inaugural flight from New York to California Wednesday, DJ Samantha Ronson will provide hip tunes while celebrities like Stephen Colbert and executives Sir Richard Branson and Chief Executive Officer of Virgin America Fred Reid walk the red carpet at Virgin America's LAX premier.
"You can't ignore the fact that Richard Branson has shown a flair for promotion that is hard for anybody to match," said Ed Perkins, contributing editor at SmarterTravel.com. "These guys are very, very good - and that matters in a market where there isn't much product differentiation."
While consumers continue to demonstrate that they care far more about cost than in-flight bells and whistles, Virgin America has gone to great lengths to score points with modern amenities like satellite TV and mood lighting.
Some of the other cool features onboard include a self-service mini bar, meals on-demand and music in the bathroom. The in-flight entertainment system has on-demand movies, games, music and the ability to compile individual song playlists. Passengers can even text message other passengers or talk in an online chat room about the episode of Sex in the City they are watching.
Virgin America also scored a deal with Google (Charts, Fortune 500) Maps, so travelers can pan and zoom on where they are, see how far they are from their destination and check how much time is remaining in the flight.
In First Class, the privileged few get plush white leather seats with an in-seat massage function and footrests.
But some industry analysts are not impressed. "I don't think it's a big deal that you can order your in-flight meal from your screen," said Joe Brancatelli, editor of JoeSentMe.com. "We've seen a lot of this before."
But "bottom line, people buy on cost," said airline analyst Ray Neidl of Calyon Securities. And if Virgin America can keep costs down, consumers are sure to embrace a new snazzy airline on the scene.
One-way fares on the Airbus 320s and 319s between San Francisco and Los Angeles start at $44, according to the airline, while First Class could cost as little as $149. For service between Washington, DC and both Los Angeles and San Francisco, fares start at $129, although prices will rise shortly after the airline gets off the ground. Exit rows will cost extra.
"Our goal is to provide topnotch service at low fares," Reid said in a statement.
The first flight comes after years of feuding between Richard Branson's Virgin Group, which owns a 25 percent stake of the new airline, and the Department of Transportation over foreign ownership laws.
Finally, in May, the DOT granted its approval for Virgin America to begin operations after deciding that airline's financing did in fact comply with a 1926 federal law that bars foreigners from controlling domestic carriers.
The airline's soon-to-be competitors, including Delta (Charts, Fortune 500), Continental Airlines (Charts, Fortune 500) and AMR Corp.'s (Charts, Fortune 500) American Airlines had all lobbied against the giving a new rival a green light.
It's been a turbulent time for those airline giants, many of which have had to trim their fleets and cut costs. But traffic is strong and major carriers are reporting that their system wide load factor - a measure of the number of passengers in proportion to seats available - has reached record levels.
With the number of full flights rising, the industry is finally set to post a solid profit this year after hemorrhaging money for a long time, and that could spell good news for Virgin America.
According to airline consultant Mike Boyd, the airline's timing, while not intentional, will work to its advantage - not to mention $177 million in financing and the Virgin name.
Virgin America started service from San Francisco to Los Angeles and San Francisco to New York. More flights will be added in the coming weeks, including daily service to Washington DC, San Diego and Las Vegas.