CEO Interview: Virgin America solves identity crisis and vows profitability for 2013

When asked if Virgin America loves business or leisure travelers more, CEO David Cush decidedly comes down on the side of road warriors as the more targeted passenger group.

“We love everyone who gets on the airline,” Cush told Skift today at Newark Airport.

But, if you look at Virgin America’s route network and product, then you’d have to say the airline is business-travel oriented, Cush said.

It’s appropriate then that Cush and Virgin Group founder Richard Branson appeared at Newark Airport’s Terminal A this morning to mark the launch of three daily nonstop flights from both Los Angeles and San Francisco to Newark.

Cush said the airline’s 53rd plane is being named “Jersey Girl,” and he characterized Newark Airport as the most under-served airport in America from the Bay Area.

Until today, only United Airlines served the San Francisco-Newark route, and Cush said fares have dropped 40% in the last week in anticipation of Virgin America’s entry into Newark.

In a related development, Branson told Flightglobal that Virgin America may file an antitrust complaint against United over its decision to ramp up flights from Newark to San Francisco and Los Angeles in the wake of Virgin America’s entry into Newark.

With the addition of Newark, Virgin America now serves nine of the top 10 business travel markets from San Francisco (SFO), and eight of the top 10 business travel markets from Los Angeles, Virgin America states.

In tilting toward business travel, Cush wants Virgin America to be more Southwest than JetBlue, with the latter focusing on leisure travelers and picking up unmanaged business travelers here and there.

But, not everyone thinks that Virgin America has solidly put enough focus on business travelers.

Henry Harteveldt, travel industry analyst for Hudson Crossing, notes that Virgin America flies to leisure destinations such as Fort Lauderdale and Orlando, and the airline’s schedules, with just one daily flight from SFO to Austin, Texas, for example, “are hardly optimal for business travelers.”

“I’m not surprised he prefers business travelers,” says Harteveldt, referring to Cush, “but the airline is going to have to work to earn more of their business. They have the product to win them, but they need to do more with schedules and network.”

In that regard, Cush told Skift that adopting a hub and spoke network to better-woo business travelers is not on the agenda.

And, Cush said, Virgin America has no intention of ordering aircraft smaller aircraft to get business travelers more efficiently to smaller markets.

“We are happy where we are,” Cush said.

Virgin America has a great reputation, but there are lots of doubts on whether the airline, which has never turned a profit in its six-year history, will survive.

However, Cush told Skift that Virgin America has pulled back on its expansion, and will turn a profit for full-year 2013.

Branson, meanwhile, recalled his Virgin Atlantic’s first flight into Newark decades ago, and vowed that Virgin America will bring real competition into Newark.

Branson owns a minority stake in Virgin america.