Cranky Flier (quickly becoming my favorite read) has put out a post about Virgin America’s latest quarterly report. Basically, they don’t sound like they’re doing that well. Virgin American rolled out the red carpet for those of us that attended the KivaDo back in February (for which I have a draft post that still has never been completed…), and I think most people generally like the airline. Unfortunately, their loyalty program leaves a lot to be desired. And apparently, so does their financial performance.
Virgin attributes their losses to their rapid growth, but this contrasts with another recent CF article about Southwest Airlines, where SWA managed to grow rapidly and pay their staff well without hemorrhaging money. Well, hopefully VX can turn it around. They’re more innovative and edgy with their airplanes and business philosophy with other airlines, and it’s nice to see their influence in the market bringing down fares in certain markets/on certain routes.
I unfortunately didn’t get around to posting this earlier, but as has been reported in several places, United recent announced layoffs in the Houston area because the city approved allowing Southwest to build an international terminal at Houston’s Hobby airport, and being international service. Now, for those of you who follow Southwest, their international destinations are likely going to be Mexico and the Caribbean. They won’t be flying to Australia or Asia or any of that, most likely. However, United made this sound like the end of the world, and in addition to the layoffs, they even cancelled their proposed upcoming Houston-Auckland (New Zealand) service on 787s.
I agree with Cranky Flier on this one (who award United his “Cranky Jackass” award). These were probably planned or needed layoffs, which are typical after a merger, and United is trying to win some points by blaming these layoffs on what the city of Houston has decided to do. Sure they will face some more competition as a result of the vote, but I highly doubt thinks like Houston to Auckland would be affected by that (plus Southwest will not even be flying out of Hobby internationally for several years). I think United overplayed their hand on this one…