MIAMI — A few weeks back, Virgin America announced that it would begin flying between San Francisco and Denver starting on March 15, 2016; just recently, United responded by increasing the number of daily flights and upgrading a few flights to larger aircraft between San Francisco and the Mile High City starting next Spring.
Virgin America will operate three daily roundtrip flights between San Francisco and Denver on weekdays and two daily round trip flights on weekends. The airline plans to operate the flights with Airbus A320s with eight first class, 12 Main Cabin Select, and 129 standard economy seats.
Based on the current schedule for December 2015, United currently operates about 10 to 11 daily roundtrip flights with a mix of Airbus A319/320s, Boeing 737-800/900s, and one 757-200. For January and February, United will fly an average of eight daily roundtrip flights also with a mix of Boeing 737 and Airbus A320 family aircraft, but March 3 is when it will start getting interesting.
United will fly 14 to 15 daily roundtrip flights between the Mile High City and San Francisco; four flights will be operated by 737-800s, three flights will be operated with Boeing 757-300s, and about eight flights with Airbus A320s.
It would appear that United may be trying to push Virgin America out of the market by having about five times more frequency, but will United succeed?
If history repeats itself, probably not.
Alaska started flying 15 daily roundtrip flights from Seattle to both Los Angeles and San Francisco in 2007 and 2008 to try to push Virgin America out, and United tried something similar; both attempts were a failure. Meanwhile on some forms such as FlyerTalk, frequent flyers were rejoicing that they would have the option to choose Virgin America to avoid United, despite the increased frequency. Many frequent fliers and elites do not seem too impressed with United’s customer experience nor service. Even though United’s prices are a bit cheaper than Virgin America’s at the moment, some are saying that they have no problem paying a little more to avoid having to fly with United.
Frontier operates three daily round trip flights per day between San Francisco and Denver. Southwest flies four daily flights to Oakland and three to San Francisco during the same time; it is important to mention Oakland as the U.S. DOT data tracks passenger numbers for the San Francisco bay area which also includes Oakland.
United once offered service between Denver and Oakland, but it was discontinued within the last few years.
With the addition of Virgin America, four airlines will be flying this route with an average of about 25 daily flights per day each way beginning in March.
In the past, Southwest typically had the most marketshare on this route with an average of about 42% while Frontier was the lowest with an average of about 18%. This put United in the number two spot, but some quarters it surpassed Southwest.
Does the Extra Capacity Make Sense?
One question that has been brought up is whether the extra capacity that United has added makes sense, and it is a fair question to ask. Though, we should mention that it is our belief that the extra capacity and frequency was put into the United reservation system last week in response to Virgin’s announcement.
According to DOT data, there was an average of 3,578 people traveling between Denver and the San Francisco bay area in 2014–which includes both San Francisco and Oakland–everyday. United is increasing the average number of daily seats in January and February 2016 from approximately 1,248 to 2,478 in March and beyond with the larger aircraft and greater frequency on the route; that is about 98% more seats.
On March 15, Virgin America will be offering 447 seats per day each way between the two cities; additionally, Southwest will have about 1,144 seats. Combined, Southwest, United, and Virgin America will offer an average of about 4,069 seats per day each way between Denver and San Francisco.
It is worthwhile to note that back in the late 2000s, United use to operate one or two widebody flights on this route, and sometimes a Boeing 747 operated a flight here and there. Though, United has and still moves a fair amount of people to San Francisco to help connect them with other parts of the United States, Europe, and Asia.
The Denver Market Heats Up
The competition in Denver is sure heating up; Virgin America was the third airline to announce domestic service in Denver this month as Delta announced it would begin flying between Los Angeles and Denver in June 2016 and Sun Country is set to begin flying between Denver and Minneapolis/St. Paul in May 2016. It does not appear that United has modified its schedule to respond to Sun Country’s or Delta’s new service so far.
Also, Air Canada announced earlier this month that it would begin flying between Montreal and Denver daily in June 2016; in a way, this new flight can help United feed traffic into its Denver hub since it is partners with Air Canada through the Star Alliance.
The Denver area, which has been dubbed the “next Silicon Valley,” is a growing hub for technology companies, startups and entrepreneurs, and “Denver is of course a world-class leisure travel destination, but its booming high-tech economy has also made it the number one requested destination by our Silicon Valley-based corporate clients,” Virgin America president and CEO David Cush said in a news release when the new service was announced. “We’re looking forward to bringing a breath of fresh airline competition to this important market and to building strong community ties with the city of Denver and state of Colorado.”
Denver has always had a very large United presence since it is an important hub for the airline, but over the last decade or so, it has had to battle it out with Frontier, Southwest, and more recently Spirit as all three have a significant presence in the Mile High city or have been slowly building a greater presence. Despite the tough competition, United still seems committed to the city, especially since it will launch new flights to Liberia and Costa Rica next month.