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Virgin fuels fare war between U.S. airlines

2 October 2007

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

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.

source: Reuters

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