Virgin America expects positive industry capacity reductions in Dallas during early 2016

Virgin America is welcoming competitive capacity reductions in early 2016, in one of its most challenging markets of 2015 - Dallas Love Field. Southwest's massive push from the airport, started in late 2014 and continuing through 2015, has resulted in a weak revenue environment, affecting all airlines that serve the greater Dallas market.

Just as capacity growth in Dallas begins to moderate, Virgin America is planning 13% to 16% capacity growth in 2016, after culling its growth of supply in 2014 and part of 2015. Most of the capacity growth is driven by frequency additions in markets that Virgin America had to cull to support growth in Dallas, but new markets in Hawaii and the addition of Denver are also driving the airline's 2016 capacity expansion.

The company is capping off 2015 by striking a deal to lease 10 Airbus A321neos, scheduled for delivery from 2017. Those new generation jets are necessary for Virgin America to meet its stated average annual capacity growth targets of approximately 10% for the medium term.