Last year in April, claims were made on behalf of Virgin America to be adding on Hawaii in its route plans.
INSIGHT: A daily flight from San Francisco to Honolulu began from 02 November 2015 which was to be followed by a schedule of a flight with *San Francisco-to-Kahului on 03 December 2015.
(*These routes are believed to be Virgin America’s two post-IPO)
So, why Virgin America is so excited to move into the Hawaii market?
“Hawaii is a key vacation spot where Virgin America’s loyal customers want to go. The carrier has had a code share agreement and frequent flyer partnership with Hawaiian Airlines since late 2012, which has given Virgin America customers access to Hawaii. However, Virgin America wants to capture that business for itself, while also providing its distinctive service for travelers going to Hawaii. One important rationale for offering flights to Hawaii is that it enhances the perceived value of Virgin America’s Elevate frequent-flyer program. Many people who are already frequent Virgin America customers have wanted to use their rewards points for free trips to Hawaii. We have already started using Hawaii as a marketing tool to draw people into the Elevate program.” – Virgin America CEO David Cush
Not to mention, Virgin America expects to get good fares on its new Hawaii routes as an airline can’t start flying a new route just to cater to travelers looking to cash in rewards.
Award tickets represent about 10% or a little less of the passenger base for other airlines’ Hawaii flights.
Cush further represented two main postulates:
- Approximately 80% of travelers on California-to-Hawaii flights live in California, where Virgin America has a big fan base. By contrast, more than half of tickets sold on flights to New York go to New York-based travelers.
- Airlines flying nonstop on transcontinental routes have to compete with airlines offering discounted connecting fares through a variety of hubs in the middle of the country. By contrast, there’s nowhere in the middle to connect if you’re flying to Hawaii.