Virgin America: a hit that is losing money

One of America’s favorite Airlines is struggling financially. Virgin Airlines regularly shows up at or near the top of most surveys and awards for best airline in the U.S. Unfortunately for Virgin America, it is far from the best at making money.

Take a quick glance at its website and you will find a long list of travel awards it has won since starting its operations in 2007. In a time where airlines are pushing for more fees and fewer perks, Virgin America stands out for its high marks in style, comfort, and service. Virgin America has stylish aircraft interior designs, great in-flight technology, and a young and energetic staff that provides world class service.

With all of the pros mentioned above, it is hard to imagine that a company that is so well liked would not be one of the most profitable airlines. Sadly, this is not the case. In the first quarter of this year alone, Virgin America posted a $49 million loss. In its five years of operation, Virgin America has recorded a net loss of $671.3 million.

There are a number of reasons for these losses. First of all, Virgin America is still in its infancy and does not have a large network of routes. This makes it difficult to attract business travelers to fly Virgin America. While it is not able to attract many business travelers, it also struggles to attract the leisure traveler. Low price tends to be one of the most important factors to leisure travelers. Since Virgin America offers a premium product (leather seats, live TV, in-flight Wi-Fi, etc.), its flights aren’t as cheap as low cost carriers such as Southwest and Alaska Airlines.

Virgin America continues to be a loved Airline by many. If it can bring its financials in line with its exemplary style, innovation, and service, it can become a very successful Airline. Virgin America just received $150 million in funding from investors and it expects 2012 to be the company’s first profitable year. Virgin America will be an interesting airline to keep an eye on to see if it can become a profitable company.