Investment banks Barclays and
The carrier declined Tuesday to comment on the prospects of an IPO.
But Virgin America Chief Executive David Cush has previously said he was waiting for the carrier to show a profit for several quarters, particularly the most challenging first quarter of the year, before pursuing a public listing.
"We think we have the airline in good shape, but we'd like to get a couple of more quarters under our belt before we go out there," he said in a television interview in November.
Until last year, the airline had not reported two consecutive profitable quarters since first taking flight in August 2007. But in the second quarter of 2013, Virgin America reported net income of $8.8 million, followed by $33.5 million for the third quarter.
The carrier is expected to report its fourth-quarter financial numbers next month.
One way Virgin America has improved its fiscal picture has been to put the brakes on an expansion effort, which has saved money. The size of Virgin's fleet nearly doubled over the last three years to 53 aircraft.
"They wisely dialed down the capacity growth," said Seth Kaplan, a managing partner at Airline Weekly, a trade publication. "That growth has now stopped."
Virgin America has also benefited from an improved financial picture for the entire airline industry, thanks to increased travel demand, stable fuel prices and hefty revenue from bag fees.
The Geneva-based International Air Transport Assn. estimates that the world's airline industry will report profits of $12.9 billion for 2013 and set a profit record of $19.7 billion in 2014.
"All the airline stocks have been performing quite well," said Betsy Snyder, an analyst with
The last major U.S.-based carrier to offer an IPO was Florida-based
"It's a great time to be an airline in this country," Kaplan said.
Branson's British-based Virgin Group owns a 25% voting stake and a 49% economic interest in Virgin America. Its other investors are led by hedge fund Cyrus Capital Partners.
Virgin America has a reputation in the industry for popular onboard amenities such as cabin mood lighting, touch-screen entertainment systems and high-quality food service. The airline was the first in the nation to offer wireless Internet throughout its fleet.
The carrier also rates high with passengers. It was named "best U.S. airline" in Condé Nast Traveler's 2013 Readers' Choice Awards, based on a survey of nearly 80,000 readers.
Virgin America is expected to use the capital it raises from the IPO to add to its fleet to better compete with bigger carriers.
But some analysts say the company should stick with its current strategy of being a low-cost carrier with popular onboard amenities, focusing on West Coast vacationers and transcontinental business travelers.
"You want to go after your own niche," said Ray Neidl, an analyst with Washington-based Nexa Capital. "The jury is still out if they found their niche."