Virgin America attempts to strike a challenging balance between growth and achieving profitability

Marking its fifth year in existence Virgin America can hardly still be identified as an upstart carrier. Its US and transborder network spans 17 markets, and the carrier has worked to build a presence in many of the large metropolitan regions in the country. It is further maturing by embarking on a codeshare with fellow Virgin Group carrier Virgin Australia after forging interline agreements with 14 carriers. But as it works toward a goal of achieving sustained profitability ahead of a possible initial public offering in 2013, Virgin America is facing a challenge of containing costs as it attempts to build up economies of scale while attempting to record any level of consistent profitability.

Virgin America's capacity growth in 2011 was roughly 29%, and the rapid growth is continuing during 2012 by about 26% through the addition of 12 A320s for a year-end total of 58 aircraft. Virgin America lost USD100 million in 2011, compared with a loss of USD69 million in 2010.