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After a rocky start amid spiralling oil prices and strong opposition, David Cush has steered Virgin America onto a profitable trajectory and is looking at next opportunities
With its cabin mood-lighting and safety video set to a tune so catchy you can't get it out of your head even after landing, Virgin America has taken pains to set itself apart from the rest of the US airline industry. The fun starts even before passengers get on their flight: "A is for awesome," states a Virgin America gate agent while boarding passengers by group on a recent flight that Airline Business took.
But for all of its freewheeling persona, the birth of Virgin America was anything but easy. Partly owned by Richard Branson's Virgin Group, the airline's application for certification in 2005 provoked a firestorm of protest from US carriers accusing the airline of violating domestic citizenship requirements.
After restructuring its financial and management structures, California-based Virgin America finally got the green light from US regulators, but not without the US transportation department requiring the airline to replace its then-chief executive Fred Reid. Although a US citizen, Reid's hiring by Branson had Virgin America's opponents crying foul.
David Cush, the former American Airlines executive named to succeed Reid, has led the eight-year-old carrier through its first profits and initial public offering. Looking back on 2007, the airline was starting on rocky ground even after it had attained regulatory approval.
"You probably couldn't have picked a worse time to start an airline," says Cush. "It was late 2007, right at the beginning of the commodities bubble when oil prices were going crazy... The first period of high commodity prices was very challenging for us, it really depleted our capital quite a bit."
Virgin America's first years proved to be an uphill climb - not wholly unexpected for a new airline in a capital-intensive industry. Based in Burlingame near San Francisco, Virgin America trudged through red ink quarter after quarter before finally reporting its first full-year profit in 2013. Along the way, Wall Street was quick to express scepticism at the airline's business model - a lowcost carrier with a premium cabin, hoping to carve out a niche for itself amid a landscape dominated by legacy...