In a coup for local airline boosters and passengers, upstart carrier Virgin America will announce Monday that it will offer daily service to Los Angeles from Mineta San Jose International Airport, starting May 1.
The fast-growing domestic carrier, which has earned a reputation for low fares and innovative amenities such as in-flight Wi-Fi service, plans to offer four daily non-stop flights to Los Angeles while hoping "to get a better feel for the San Jose market," CEO David Cush said in an interview.
Representatives of the city and Silicon Valley's tech industry, who have campaigned to bring more carriers to the underutilized airport, are hoping the new flights are a first step that will lead to the airline offering service to additional cities. But one industry analyst questioned the wisdom of the airline's move, saying there is already fierce competition on the San Jose to Los Angeles route.
"More competition is always good," said Henry Harteveldt, a travel industry analyst with the firm Hudson Crossing. But he noted that major airlines including Southwest, American, Alaska and United also fly from San Jose to Los Angeles. As the newest entry in the field, he warned, Virgin America "may find the waters are full of sharks."
The announcement comes just weeks after another carrier, All Nippon Airways, began offering non-stop service from San Jose to Tokyo. The Japanese airline was forced to temporarily halt the service,
however, because of problems with its new Boeing 787 Dreamliner jets.
Still, local officials said they're pleased to have both airlines at the city-owned airport, which has struggled to pay off a $1.5 billion renovation and expansion that was planned before the last recession and airline industry cutbacks.
"We think the San Jose market is generally underserved by the existing airlines," Mayor Chuck Reed said in an interview. "Having Virgin America come in is just a huge step in providing better service to Silicon Valley customers. We certainly hope it's a first step of many steps."
Local tech companies joined the city in a campaign to recruit both airlines, added Carl Guardino of the Silicon Valley Leadership Group, who said that a survey of valley employers also showed interest in more flights to such cities as Chicago, New York, Washington, D.C., and Boston. This newspaper's publisher, Mac Tully, is chairman of the business group's airport task force.
"Our world-class airport needs more direct domestic and international flights to meet the needs and pressing time demands" of Silicon Valley business travelers, who now drive to San Francisco International Airport for direct flights to a number of cities, Guardino said.
San Francisco's airport is home base for the 5-year-old Virgin America, which is privately held and headquartered in Burlingame; Sir Richard Branson's U.K.-based Virgin Group is a minority owner.
Virgin America, which has about 2,600 employees, plans to add 15 workers in San Jose, according to a spokeswoman, who said each new airline job can lead to creation of five more jobs by airport concession operators, maintenance contractors and other vendors.
San Jose's pitch to the airline included an agreement to waive landing fees for the first year, which Cush and Harteveldt both described as a typical incentive for the industry.
While Virgin America has grown rapidly since its founding in 2007, it has struggled to make a profit and recently announced it will slow its rate of expansion. Cush, however, said he was impressed by San Jose's recruiting campaign and by his own market research.
The new flights to Los Angeles will connect with Virgin America service to other cities in the United States and Mexico. Since high-priced fuel makes long-haul flights proportionately more expensive than short hops from San Jose to Southern California, Cush said, "we saw this as a low-risk way of putting our toe in the water."
That may eventually lead "to bigger things that I know the city of San Jose wants," Cush said, but "it will be a year or so before we look at adding" other flights.
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