Virgin America Releases Financial Results
Start-up Carrier Reports Steadily Growing Revenue Despite Fuel Costs and Challenging Economy
San Francisco — Feb. 2, 2009 — Virgin America, the new California based domestic airline, today reported the company’s past financial data for the fourth quarter of 2007 and the first three quarters of 2008. Despite record fuel costs and a challenging economic climate, the new airline reported consistent and steadily growing unit revenue and load factors since its launch in Aug. 2007, with record growth in the latter part of 2008.
“These results are consistent with our expectations — with steady quarter over quarter growth in unit revenue since launch,” said Virgin America President and CEO David Cush. “This is an industry with very high start-up costs and where large first year losses are common. We’re confident in our business model and are in a strong position as a well-financed start-up with solid revenue growth and load factors, a modern, fuel efficient fleet, a maturing route network, and award-winning service the public has embraced.”
Key facts in the Form 41 release include:
- Start-up losses: The airline reported a $175.4 million net loss for the first three quarters of 2008 on operating revenues of $259.6 million;
- Strong load factors: 77.6 percent load factor in the second quarter of 2008 and 81.4 percent load factor in the third quarter of 2008.
- Significant top line progress: Quarter over quarter unit revenue improved by 28 percent in the first quarter of 2008, 26 percent in the second quarter and 10 percent in the third quarter. Despite a near doubling of capacity, unit revenue in the third quarter was up over 75 percent versus the fourth quarter of 2007, Virgin America’s first full operating quarter.
“We’re pleased with our progress to date, especially given fuel price volatility and economic uncertainty in 2008. We believe our award-winning service, strong financing, streamlined cost structure and impressive revenue performance is the right recipe at a time when consumers are more discerning than ever as to where they’ll spend their hard-earned dollars. We’re in this for the long haul and are fully funded through our projected profitability date — a strong indication of our investors’ confidence in our business model,” added Cush.
Cush was appointed President and Chief Executive Officer of Virgin America in Dec. 2007. Although a privately held company, the airline is announcing these earnings results because they will become public later this week as a result of the U.S. Department of Transportation’s (DOT) recent decision to deny the Company’s request for confidential treatment of its previously filed financial information. Virgin America and other small carriers sought protection of this data because it is competitively sensitive and ripe for misuse by the legacy carriers. DOT did provide confidential treatment for this type of airline data until 1991, and it continues to afford confidential treatment for international carriers.
Virgin America is one of the fastest growing U.S. carriers of all time, with a new 28-aircraft Airbus A320-family fleet. The airline offers 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, starting on Feb. 12, 2009 — BOS to LAX and BOS to SFO, and starting on April 30, 2009 — SFO to SNA.
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About Virgin America:
Launched in August 2007, the San Francisco-based Virgin America offers guests attractive fares and a host of innovative features aimed at reinventing air travel. In just a little over a year flying, the airline has won a list of travel industry best-in-class awards including “Best Domestic Airline” in Condé Nast Traveler’s 2008 Readers’ Choice Awards and in Travel + Leisure’s World’s Best Awards. The airline’s brand new Airbus A320-family fleet is one of the youngest and most fuel efficient in the U.S. The carrier has announced service to nine destinations, with full Boston service beginning on Feb. 12, 2009, and service to Orange County beginning April 30, 2009. To learn more, visit: www.virginamerica.com