This is just another result of airlines selling tickets at below cost for an extended period of time. It is the epitome of 'sell every ticket at a loss but make up for it in volume'.

VX has a lower cost structure than almost every other airline (I think only Allegient has a lower cost per available seat mile).
VX has a higher quality product than competing airlines.
VX carries enough passengers on their flights (greater than 80% load factor) to be making money.
VX is given subsidies by airports they serve through subsidies and steeply discounted or no airport fees. http://sanbruno.patch.com/articles/v...n-mateo-county
See last sentence: http://www.nycaviation.com/2012/09/v...ings-nonstops/
See last answer (landing fees): http://www.bizjournals.com/sanjose/n....html?page=all

Yet with all of the above, VX continues to sell their product at below cost after being in the business more than 5 years. Sure, the airlines had to dump their pension obligations. Why? Companies like VX don't offer pensions; in order to try to compete against VX, airlines with pensions were forced to dump them. Startup airlines have a LOT of advantages over existing airlines; the problem here isn't the big bad airlines; it's incompetent VX management.
If VX continues to price their tickets at below breakeven levels, they deserve to go out of business.