After turning a small profit in 2013, Virgin America is ready to go public. One question the seven-year-old airline may face from investors: Are you folks too nice to travelers to make money?
The U.S. airline industry’s robust turnaround has come from a well-documented proliferation of new fees, higher fares, less competition, and fewer flights on many routes. In other words, what’s good for a passenger is typically awful for an airline’s finances—and vice versa. That tension has played out for years at JetBlue Airways, which styles itself as a “hybrid” carrier offering spacious legroom and free satellite TV and snacks. JetBlue—like Virgin America and Southwest—falls into the middle tier of airlines, between the extreme discounters, such as Spirit, Frontier, and Allegiant, and the full-service global airlines, such as American, Delta, and United.
