Decked out in clothing straight out of a spaghetti Western, Richard Branson climbed down from Virgin America's first flight to Texas on Wednesday, marking the start of a showdown with American Airlines.
Virgin America has carved a niche for itself by offering amenity-rich service at low fares between California and the East Coast. But Virgin has never flown anywhere in the middle of the country, and it's never entered a fortress hub like Dallas-Fort Worth International Airport, where AMR Corp.'s American controls more than 80 percent of the flights.
Branson said it's precisely American's dominance that provided an opening for Virgin to come in with lower fares, newer planes and more passenger amenities.
"We can get our fair slice of the market," said Branson, who wore leather chaps, a pearl-button Western shirt, red bandanna and cowboy hat for the occasion.
Within four or five years, he predicted, Virgin will command 8 percent of the U.S. air travel market — or about what US Airways Group Inc. and Continental control now. That's a bold forecast for a three-year-old airline that, according to its own CEO, barely survived the 2008 surge in fuel prices.
Virgin will start small in Dallas, offering two daily nonstop flights between DFW and Los Angeles, and two to San Francisco. It plans to add at least a third flight to each city, but even six flights would pale compared to the hundreds flown by American and its regional affiliate, American Eagle.
American is already fighting back — cutting fares, offering double frequent-flier miles and handing out freebies such as $100 gift cards aboard some flights on the Dallas-Los Angeles and Dallas-San Francisco routes. American spokesman Tim Smith declined to discuss Virgin specifically, but said, "At DFW, there are a total of 18 different airlines . we compete vigorously with all of them."
Robert Mann, an aviation consultant in the New York area, said American "will undoubtedly make it very punishing for Virgin to serve the market, which Virgin may ultimately conclude isn't worth pursuing."
One of the passengers on the first Virgin flight to Dallas was Rick Seaney, CEO of travel website FareCompare.com. He came away impressed with "the product," which includes in-flight TV and movies at every seatback, mood lighting instead of fluorescent glare, and young flight attendants serving a la carte snacks and drinks.
"This is how flying becomes fun again," Seaney said. "Southwest has the style but not the product, and American is trying to improve their product."
Seaney believes plenty of Dallas leisure travelers will try Virgin but business travelers will be reluctant because of the scarcity of flights. He said American's huge frequent-flier program will give it another advantage over its new rival.
Virgin CEO David Cush, a former American Airlines executive, acknowledged that Virgin must add at least a third daily round trip on both California routes to lure business travelers but gave no timetable for doing that. American has about 16 daily nonstop flights to Los Angeles and nine to San Francisco from Dallas.
Cush said, however, that Virgin doesn't plan to launch service between Dallas and New York or other Eastern cities. He suggested that JetBlue Airways Corp. might want to do that.