Virgin's Second Coming: Will This One Last?

Virgin America Seduces Toronto

U.S. low-cost carrier Virgin America launched its first international route this week from LA to Toronto, but it’s not the first Virgin to land in Canada.

Sister airline Virgin Atlantic launched service to London from Toronto in June 2001. At the inaugural event, a confident Virgin founder Richard Branson told TakeOffeh’s Nina Slawek: “Toronto is not an easy market but we really do expect in 50 years to still be around.”

A couple of months later the September 11 attacks sent the aviation industry into a spiral. A few months after that, Virgin Atlantic pulled out. While the terrorist attacks certainly contributed to Virgin Atlantic’s departure, the Toronto-London route is fiercely competitive, led by Air Canada and British Airways, with substantial seasonal charter traffic to boot.

On the Los Angeles and San Francisco routes, Virgin America is launching with daily service to Toronto. Air Canada will be the main competition, and as expected, new competition has brought its fangs out. AC has boosted its seat capacity in the Toronto-California market by more than 50% in advance of Virgin America’s arrival and is undercutting Virgin America’s fares with rates as low as $187 one-way, before taxes, between Toronto and San Francisco for weekdays in mid-July.

“Virgin America is a low-cost carrier unlike Virgin Atlantic so I am sure they will have a different strategy,” says airline industry expert Chris Rivers. “It will be tough against AC though, because they will match their prices and they have the formidable Aeroplan.”

As the Globe and Mail reports, Virgin America chairman Donald Carty (who is also chairman of Toronto-based Porter Airlines) says price isn’t the only factor in route success. “Many start-ups have come to the market with the promise to the customer of low prices. That’s great, but the customer wants and expects more. We will be delivering a travel experience, too,” he said.

The Virgin America ‘experience’ earned the carrier a ‘Best Domestic Airline’ rating from Travel + Leisure magazine in both 2008 and 2009. Features include mood lighting, inflight Wi-Fi, a self-serve mini bar and snack trolley and a dynamic entertainment system known as ‘Red.’

It’s a sexy product for sure, but Carty knows Virgin America is in for a fight. “Air Canada isn’t a naive carrier. They will compete and won’t give up turf easily. If we see a strong economic recovery, there is probably room for success on routes for both entities.”

It should also be noted that Air Canada was voted “Best Airline in North America” by readers of Global Travel magazine in its annual survey of business travellers.

Virgin America is hoping for the best, and already looking at Vancouver as a second Canadian destination. Carty sees the opportunity to tap into a large community of Canadians working in the entertainment industry in Los Angeles, and the high-tech biz in San Francisco.

Once the G8 crowds clear out of town, Branson will be back for an official inauguration on June 29th. In true Virgin style it will be a party, with red-hot Canadian hip hop artist Drake among the attendees.

By: Bruce Parkinson
Bruce Parkinson is a travel industry journalist and regular contributor to as well as sister company,

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