Virgin America has been forced to cut services and seek extra funds from investors less than a year after launching.
The Virgin-branded US domestic carrier will reduce capacity by 10% by cutting mid-week flights. However, it described the move as temporary. Investors are reported to have provided an additional $100 million in anticipation of continuing losses and weakening demand due to the high fuel price and US recession.
The carrier has also applied to the US Department of Transportation’s bureau of statistics requesting its traffic figures remain private. However, the airline said it intends to add routes as planned this year, including New York-Las Vegas.
Virgin America launched in August 2007 following a two year political battle. It did so as a low-fare, full-frills carrier flying between San Francisco, Los Angeles and New York.
The airline is 25% owned by Sir Richard Branson. US foreign-ownership rules prevent the Virgin Group chairman from owning more.