Virgin America discovers price beats mood fighting

The $2.6b sale of Virgin America shows that it just doesn’t pay to be different. Despite the mood lighting, club music, touchscreen food orders, and additional frills that made it a customer favorite, Virgin America couldn’t escape the reality that ticket price is king. For a niche player, the new world order for airlines means passenger goodies and competitive industry pricing are an almost impossible combination. Virgin America’s fares aren’t remarkably different from what other airlines charge, even with all its extras. They can’t be, given the fierce pressures on every major route. In fact, Virgin America was a “price disruptor” in the industry, and its sale should prompt less discounting, Standard & Poor’s analyst Jim Corridore said in a note to clients. Still, British billionaire and Virgin founder Richard Branson feels that the airline dusted off a customer service ethos that had been lost over the years. “Because of Virgin America, the industry finally had to consider the customer,” Branson wrote on Monday in a blog post about the deal with Alaska Air Group. Branson said he feels “sadness” about the airline’s sale, but as a foreign shareholder with a minority stake he was unable to block it. Virgin America began flying in summer 2007, before US airline mergers concentrated 84% of industry revenue among four behemoth carriers, up from 65 percent in 2010. That consolidation wave left most of the remaining market to three second-tier airlines, including Virgin America, and an additional three ultra-low cost carriers.<br/>