The move is designed to increase load levels on Southwest flights, and could give the airlines leverage as it fights for gates at large airports that serve international travel.

The airlines is also revisiting other standard Southwest practices such as no in-flight meals and no reserved seating, looking for ways to enhance its appeal. I wonder if the launch of Virgin America is rattling Southwest's skycage?

It may want to consider issuing bathroom passes to those stranded on the runway, as a no-brainer competitive advantage.

USA Today's Ben Mutzabaugh had an interesting Q&A session with Richard Branson, founder of the Virgin Group and Virgin Atlantic Airways, on last week's inaugural flight from New York JFK Airport to San Francisco. Reading Branson's description of the new Virgin flights made me want to book a flight to San Fran immediately.

What interested me from the start of the interview was one of things that Branson said would set Virgin America apart from the other U.S. carriers, something he planned to introduce called "premium economy class." He described this as seating that would be "for people who want more legroom but can't afford first class." Mind you that the most expensive first-class tickets Virgin America has right now are approximately $650, but who wants to pay that for a flight when you can have "premium economy class?"

A quick check on Virgin Atlantic's website, because Virgin America has yet to initiate this service, and they show me that premium economy seating has 38 inches of leg room, compared to the standard 33 inches in economy seating, and a seat width of 21 inches. This is has to be a dream! Once this "premium economy class" comes to Virgin America, I'm certainly going to think of using them for my next flight. More space for less money, it's an amazing concept. I just hope they can last that long in the States with Northwest Airlines (NYSE: NWA), AirTran (NYSE: AAI), Southwest Airlines (NYSE: LUV), US Airways (NYSE: LCC), JetBlue Airways (NASDAQ: JBLU), United Airlines (NASDAQ: UAUA) and all the other U.S. carriers competing for the same ticket.

Our sister site, Engadget, sat down to an exclusive interview with Virgin Group Chairman Sir Richard Branson. Branson, the swash-buckling founder of the Virgin empire, flew to San Francisco on the first ever Virgin America flight. Branson, who has a 25% stake in the new company, worked for three years to get U.S. regulators to approve his new low-cost carrier.

Sir Richard is vocal in his criticism of the U.S. airline industry. Indeed, he tells Engadget that if it weren't for America's peculiar Chapter 11, none of the legacy carriers in this country would still be around. To wit:

"...they just keep on going in and out of bankruptcy. In Europe, if you're dead you're dead, make room for new children to grow. It's not good for the traveling public. It's much better if you have the English system, where if you don't succeed you're bankrupt and you make room for somebody else."

The airline will compete with the likes of Jetblue Airways Corp. (NASDAQ: JBLU) and Southwest Airline Co. (NYSE: LUV), and will feature two flights a day to New York and five to Los Angeles from SFO. Frequent flyers must be excited, given the high reputation of the Virgin brand name, and Branson has promised these new planes, Airbus A319 and A320 jets, will have the latest in high-tech entertainment options.

Which is why the boys at Engadget wanted to go along for the ride, no doubt. Check out the whole interview here:

On Wednesday, the first Virgin America Airbus A320s will take flight from New York (JFK) to Los Angeles (LAX) and San Francisco (SFO). The offshoot of European giant Virgin Atlantic, VA is owned primarily by Black Canyon Capital and Cyrus Capital Partners. It enters the market promising to deliver better prices and service than its rivals.

Its immediate rivals would appear to be JetBlue (NASDAQ:JBLU) and Southwest Airlines NYSE:LUV), both airlines operating on a model established by Virgin Atlantic focused on price, price, and price. How likely is Virgin America to make an impact on the increasingly crowded and fragile American air industry?

It has already driven down the price of the NYC-SF route to $250, according to the Wall Street Journal, significantly undercutting its rivals. How much of this price reflects lower costs, versus acceptable losses to establish business, is not clear. The airlines does start with new planes and hardware and new (cheap) hires, so it likely is starting with the lowest overhead it can anticipate.

JetBlue and Southwest, on the other hand, are already struggling with the increased expense of maintaining well-used equipment and the growing salary expectations of experienced crews, leaving them less room to trim costs.

Today's Wall Street Journal has an article discussing the new launch of Virgin America, and its potential impact on other discount and legacy carriers. The company is said to be well funded and includes many of the same comforts as other carriers, at a time when customer satisfaction in the U.S. is at near-lows.

The thing is that a new start-up isn't likely to hit the legacy carriers as much. Larger discounters like Southwest Airlines (NYSE: LUV) and Jetblue Airways Corp. (NASDAQ: JBLU) could feel the crunch down the road, but they won't even notice this launch for some time. Grabbing gates at major airports is no longer easy, and rolling out new routes takes time. At launch, the flights are only originating out of select spots: New York-JFK, Washington DC-IAD, San Francisco-SFO, Los Angeles-LAX, and Las Vegas. From Los Angeles, Virgin America only flies to New York, San Francisco, and DC; that San Francisco route is already extremely competitive. The New York departures are across country to L.A., Vegas, and San Francisco, so it seems the carrier will initially be competing in the longer-haul routes. The San Francisco to L.A. route is priced as low as $44 before taxes and fees.

This is added competition, but this has been in the works for years. Jetblue had some customer service issues that turned into a disaster. Southwest is starting to feel some of the heat because it isn't really THAT much of a discounter to legacy carriers if you don't book way in advance on the beloved "internet only" fares; and they are feeling some heat now that their fuel hedges are coming more in-line with other carriers. The real winner here is going to be you and me. Branson is already a bajillionaire, and this will be just one more tool keeping the air travel costs in line.

Jon Ogg can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.

As of today, there's a new airline in the skies: Virgin America. That's right folks: British Billionaire Richard Branson has expanded his Virgin Atlantic fleet across the pond. The new San Francisco-based start-up will use a fleet of Airbus A320's to fly two routes: San Francisco to J.F.K in New York and San Francisco to Los Angeles International.

While Virgin America will only open with those two routes, they plan on ramping its schedule fast. In the next three months, Virgin will add Las Vegas and Washington Dulles to the schedule and move up to a total 10 U.S. destinations a year from now. The fleet plans to service 30 destinations within the next five years.