Virgin fuels fare war between US airlines: media

The launch of low-cost airline Virgin America Inc has triggered a fare war that has nearly halved ticket prices on some routes and could erode earnings at rival airlines, reports Reuters.

Virgin launched service in the United States on August 8.

"The competition has been especially fierce between Virgin, which is partly backed and fully branded by British entrepreneur Richard Branson, and UAL Corp's United Airlines on the transcontinental route between San Francisco and Washington, D.C. Low-cost carriers JetBlue Airways and Southwest Airlines  also have been drawn into a turf war with Virgin and responded with capacity additions and fare cuts," according to a report by the agency.

"It's pretty apparent that the airlines are worried," reportedly said Rick Seaney, Chief Executive of fare tracker FareCompare.com.

According to FareCompare data, United has cut its lowest advance purchase fares on round-trip flights between San Francisco and Washington by 20 percent since mid-July, when Virgin started selling tickets.

Lowest advance purchase fares do not necessarily reflect average fares, which see some seasonal reductions as the peak summer travel season winds down, the report highlighted.

Other carriers have attempted to fend off Virgin by adding more flights to routes where Virgin flies, Seaney reportedly said.

"For example, when Virgin added 447 seats, or three daily weekday flights, to its San Francisco-to-Las Vegas route, Southwest responded by adding 959 seats, or seven flights, on that route. When Virgin put 745 seats, or five daily flights, on the route between San Francisco and Los Angeles, JetBlue added 600 seats, or four flights, on the route. Such capacity additions can attract more travelers, but they also create a glut of seats and pressure fares," highlighted the report.

"They don't want to lose market share, so the airlines that run right against (Virgin) start adding aircraft," Seaney said.