Virgin America's good and not-so-good news

The airline business is just damn hard. Along comes a carrier that makes flying tolerable (even in coach), develops a strong customer following, and still it struggles to make money. Such is the dilemma faced by Virgin America, which was recognized during a conference this week in Anaheim as offering the best passenger experience - one of numerous awards the carrier has received. But since its start in 2007, Virgin has lost $675 million and despite a modestly profitable second quarter, it faces an uphill battle. Travelers really like the airline, but if it doesn't go to all the places that, say, American or United flies to, Virgin is destined to remain a boutique carrier. That's a tough go, even helped along by billionaire Richard Branson, whose Virgin Group holds a 25 percent stake. Since deregulation in 1978, all but a few of the 250 or so new airlines have failed. From the NYT:

Bigger airlines face the challenges of operating larger networks. If a storm delays a United or American plane in Chicago, there can be reverberations for flights all over the country. Those airlines have older fleets than the upstarts, as well as the baggage of past expectations. (Remember, for example, when they served food?) But recent merger deals -- United with Continental, and American's proposed combination with US Airways, a move that has been challenged by the Justice Department -- have the big airlines starting to invest more in service. Of Southwest's 696 planes, for example, about 430 have Wi-Fi, the airline said. United said it plans to have Wi-Fi in just over 200 planes by year-end, up from 13 at the beginning of this year. Jeff Foland, executive vice president for marketing, technology and strategy at United, said that after a tumultuous decade, the industry had reached a "turning point" and, for his company and others, "a customer-experience and consumer-loyalty renaissance."