Loading

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

Analysis

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.

Read More

This CAPA Analysis Report is 1,898 words.

You must log in to read the rest of this article.

Got an account? Log In

Create a CAPA Account

Get a taste of our expert analysis and research publications by signing up to CAPA Content Lite for free, or unlock full access with CAPA Membership.

InclusionsContent Lite UserCAPA Member
News
Non-Premium Analysis
Premium Analysis
Data Centre
Selected Research Publications

Want More Analysis Like This?

CAPA Membership provides access to all news and analysis on the site, along with access to many areas of our comprehensive databases and toolsets.
Find Out More