Virgin America plans rapid route expansion in 1H2013 even as capacity growth slows

Virgin America is launching several new routes from its bases in San Francisco and Los Angeles in 1H2013 even as it cuts its annual growth rate from an annual average of 28% during the last three years to the mid-single digits during 2013 and takes delivery of just a single aircraft during the year. The routes are reflective of the airline's network strategy during the last couple of years that entails inaugurating a mix of business and leisure markets that have ample existing service. Virgin America's network tactics have been called into question during the last few years as profitability continues to elude the carrier; and it is not certain that the new routes it is introducing in 2013 will bring the airline closer to its first full-year profit.

New routes introduced by the carrier beginning in Apr-2013 and continuing through Jun-2013 are largely well-served by Virgin America's main rivals United and American along with low-fare carriers JetBlue and Southwest. One of Virgin America's most interesting moves is its entry into the crowded Los Angeles-San Jose market. It is an interesting experiment for the carrier as San Jose Norman Mineta Airport is just 49km away from its largest base and headquarters in San Francisco, from which Virgin America offers numerous daily flights to Los Angeles. With so many carriers already serving the short-haul market, it is uncertain if Virgin America can steal or stimulate enough traffic on the route to achieve sustained profitability.