Virgin America Reports 2009 Second Quarter Financial Results
Start-up Domestic Airline Reports Year-Over-Year Growth, Versus Industry Declines
San Francisco – August 27,2009 –Virgin America, the award-winning start-up airline, today reported its financial results for the second quarter of 2009. Despite double-digit industry revenue decreases, the new carrier reported significantly improved financial results and unit costs, record-setting load factors and steady year-over-year growth in stage-length adjusted guest unit revenue.
“Given double digit year-over-year industry revenue declines and a 48 percent increase in our capacity, we’re particularly pleased to report stage-length adjusted unit revenue growth and record-setting load factors in the second quarter,” said Virgin America President and CEO David Cush. “As we continue to grow to new destinations in 2009 and beyond, our business model is right on track. We’re confident that our low fares, award-winning service and high-tech amenities continue to provide an unrivalled value proposition at a time when consumers are more discerning than ever.”
|Second Quarter Reporting Highlights:
||Operating results: The airline reported an $11.4 million operating loss on revenues of $135.9 million –
an 81.6 percent improvement year-over-year.
||Growing load factors: The airline reported an 85.3 percent overall load factor in 2Q09 – an 8 point improvement over 2Q08, despite a 42.9 percent increase in scheduled service capacity. Traffic increased by 57 percent year-over-year. The airline reported the highest loads in its history, with an 85.1 percent load factor in April; 84.1 percent load factor in May; and 86.6 percent load factor in June.
||Significant top line progress: Revenue in 2Q09 was up by 46.9 percent versus 2Q08. Virgin America’s stage-length adjusted guest unit revenue was up 2.7 percent versus 2Q08.
||Exceptional cost control: Unit costs (CASM) dropped by 35.6 percent while non-fuel CASM dropped by 20.9 percent, as the airline was able to increase capacity at a very low marginal cost.
||Cash: The airline ended 2Q09 with $28 million in unrestricted cash and $54 million in total liquidity, with full funding for its operation through its projected profitability date.
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“Given the overall industry revenue environment and our record growth, we’re very pleased with our unit cost improvements and steady progress to date on our bottom line,” added Cush.
In the second quarter, Virgin America launched new service to Orange County (SNA) and added additional flights to its popular Boston (BOS) to San Francisco (SFO) route. In May, Virgin America became the first and only airline to offer WiFi on every flight. Take rates for the Gogo In-Flight Internet Service continue to climb with some flights and routes reporting up to 20-25% of guests using the service. Virgin America is also the only domestic airline to offer standard power outlets near every seat – so travelers can stay connected longer.
In July, Virgin America captured the “Best Domestic Airline” title for the second consecutive year in Travel + Leisure’s World’s Best Awards. In the second quarter, the airline also unveiled an updated and expanded new menu, for which it also won “Best Domestic Airline for Food” in the prestigious Travel + Leisure Annual World’s Best Awards readers’ survey.
Operationally, Virgin America continues to excel, achieving an impressive 82.7 percent A-14 on-time performance for the second quarter. The carrier’s mishandled baggage rate was also industry-leading in the second quarter, with an average of 1.14 bags per 1000 guests, versus the industry average of 3.85 bags per 1000 guests.
Although a privately held company, the airline is announcing these earnings results in advance of the U.S. Department of Transportation’s (DOT) quarterly reports.
Virgin America flies to San Francisco, Los Angeles, New York, Washington D.C., Seattle, Las Vegas, San Diego, Boston, Orange County and as of Nov. 18, 2009 – South Florida (Fort Lauderdale). The airline currently offers daily flights from: SFO to LAX, SFO to JFK, SFO to SAN, SFO to IAD, SFO to LAS, LAX to JFK, LAX to IAD, SFO to SEA, SEA to LAX, JFK to LAS, BOS to LAX, BOS to SFO and SFO to SNA. Virgin America has flown close to five million guests since its inaugural flights in August 2007 and now counts over 950,000 Elevate loyalty program members.
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Media Contact: Abby Lunardini (650) 533-7576 / email@example.com
EDITORS NOTE: Virgin America is a U.S. controlled, owned, and operated airline. It is an entirely separate company from Virgin Atlantic. Sir Richard Branson’s Virgin Group is a minority share investor in Virgin America.
About Virgin America: Headquartered in California and launched in August 2007, Virgin America is one of the fastest growing start-up U.S. airlines of all time and currently employs over 1500 people. Virgin America offers guests attractive fares and a host of innovative features aimed at reinventing air travel. The airline’s base of operations is San Francisco International Airport’s modern International Terminal. The airline’s new aircraft offer interactive in-flight entertainment systems and power outlets near every seat for electronic gear. Virgin America offers in-flight internet service on every flight and hosts the largest in-flight entertainment library in the U.S. skies via its touch-screen Red™ seatback system. In just two years flying, the airline was named "Best Domestic Airline” in the Condé Nast Traveler 2008 Readers’ Choice Awards and in Travel + Leisure’s 2008 and 2009 World’s Best Awards. Elevate is Virgin America’s first-of-its-kind loyalty program, which offers guests the ability to redeem points for any unsold seat – on any Virgin America flight, at any time. Elevate offers Web-based redemption with no black-out dates. For more please visit: www.virginamerica.com