Virgin America SWOT: Announcing its IPO, Virgin records a profitable 2Q2014. Sustainability is key

Virgin America recorded one of its best financial performances in its history during 2Q2014 as profits trebled year-on-year to USD37 million. After a 1Q2014 loss of USD22 million Virgin America still managed to eke out a USD15 million profit during 1H2014.

The airline has also officially submitted the necessary information to US regulators for an initial public offering, something Virgin America has frequently discussed during the past year. Its prospects of successfully executing an IPO remain challenging. Virgin America's financial track record and, albeit improving, its balance sheet remains only limitedly attractive to potential new investors.

Despite progress in its financial performance, Virgin America's challenges for now continue to outweigh its strengths, a scenario it needs to turn around for the long term. Its current investors may be pressing for an IPO, but accessing the public market does not guarantee long term staying power. In this Virgin may be helped by the current "restraint" of the newly consolidated majors, providing greater stability not only for themselves, but also for other quality incumbents.