Virgin America Reports Fourth Quarter and Full Year 2009 Financial Results
Start-up Airline Reports Strong Performance in Second Full Year of Operations
San Francisco — April 22, 2010 — Virgin America, the award-winning start-up airline, today reported its financial results for the fourth quarter and full year 2009. While driving growth against the backdrop of a contracting industry, the start-up airline made significant top line progress in its second full year of operations. For full year 2009, Virgin America reported a $48 million operating loss on revenues of $548 million — a $140 million (or 74 percent) year-over-year improvement over 2008. In 2009, the Company also reported its first quarterly operating profit in the third quarter.
Although the revenue and demand environment remained challenging in the final quarter of 2009, Virgin America reported strong revenue performance, industry-leading load factors, and improved unit costs for the fourth quarter. The airline narrowed its operating loss by $11 million year-over-year in the fourth quarter, improving its operating margin by 10.9 points. Virgin America also reported a 47 percent increase in scheduled service capacity year-over-year.
"We're very pleased with the strong and steady progress we've made in operating income, unit costs and unit revenue in our second full year of operations," said Virgin America President and CEO David Cush. "Given both the recession and the fact that 2009 was one of the most challenging airline revenue environments in recent memory, we're proud of how far we have come. Our progress to date is a testament to our unique business model, the growing loyalty of our guests and the dedication of our entrepreneurial team."
Fourth Quarter Reporting Highlights:
- Operating results: The airline reported a $10 million operating loss on revenues of $153 million, an improvement of 51 percent over the fourth quarter of 2008.
- Record load factors: The airline reported an 84.3 percent load factor in the fourth quarter of 2009 — a 3.1 point improvement over the fourth quarter of 2008, despite a 47 percent increase in scheduled service capacity for the quarter. Including charter operations, total capacity increased by 42 percent. The airline consistently outperformed the industry in the fourth quarter, with an 84.6 percent load factor in October; 83.2 percent load factor in November; and an 85.0 percent load factor in December.
- Significant top line progress: Revenue in the fourth quarter of 2009 was up by 29 percent versus the fourth quarter of 2008. Virgin America's stage-length adjusted guest unit revenue was essentially flat (down 1.0 percent) versus the fourth quarter of 2008, during a period in which the industry's unit revenue declined by four percent overall.
- Exceptional cost control: Unit costs (CASM) dropped by 18 percent while ex-fuel CASM dropped by 24 percent, as the airline was able to increase capacity at a very low marginal cost.
- Cash: The airline ended the fourth quarter of 2009 with $22 million in unrestricted cash and $129 million in total liquidity.
Q409 Q408 Percent change Revenues (000) $153,016 $118,717 28.9 Operating Expenses (000) $163,226 $139,590 16.9 Operating Income (Loss) (000) ($10,210) ($20,873) (51.1) Net Income (Loss) (000) ($18,757) ($34,183) (45.1) Total ASMs (000) 1,736,120 1,223,303 41.9 Load Factor % 84.3% 81.2% 3.1 pts Operating Margin % (6.7%) (17.6%) (10.9) pts Total RASM 8.81¢ 9.70¢ (9.2) Operating CASM 9.40¢ 11.41¢ (17.6) Ex-Fuel CASM 6.55¢ 8.56¢ (23.5) Average Stage Length 1,451 1,291 12.4
Full Year 2009 Reporting Highlights:
- Operating results: The airline reported a $48 million operating loss on revenues of $548 million, a $140 million (or 74 percent) improvement over full year 2008 results. The airline reported a net loss of $81 million in 2009, versus a net loss of $210 million in 2008 — a 62 percent year-over-year improvement.
- Record load factors: The airline reported an 82.8 percent load factor overall for full year 2009 — a 6.2 point improvement over full year 2008, despite a 47 percent increase in scheduled service capacity in 2009. Including charter operations, total capacity increased by 49 percent.
- Significant top line progress: Revenue in 2009 was up by 45 percent versus 2008. Virgin America's stage-length adjusted guest unit revenue was up by 1.3 percent over 2008.
- Exceptional cost control: Unit costs (CASM) dropped by 29 percent, while ex-fuel CASM dropped by 21 percent, as the airline was able to increase capacity at a very low marginal cost.
YTD 2009 YTD 2008 Percent change Revenues (000) $547,645 $378,281 44.8 Operating Expenses (000) $595,725 $566,372 5.2 Operating Income (Loss) (000) ($48,080) ($188,091) (74.4) Net Income (Loss) (000) ($80,778) ($209,616) (61.5) Total ASMs (000) 6,691,166 4,498,506 48.7 Load Factor % 82.8% 76.6% 6.2 pts Operating Margin % (8.8%) (49.7%) (40.9) pts Total RASM 8.18¢ 8.41¢ (2.7) Operating CASM 8.90¢ 12.59¢ (29.3) Ex-Fuel CASM 6.51¢ 8.27¢ (21.3) Average Stage Length 1,415 1,285 10.1
"With solid financial progress, excellent operational performance and a unique service that is continuing to hit the mark with consumers — we're optimistic about the improving revenue environment and look forward to expanding to five new destinations in 2010," added Cush.
Coming on the heels of the Company's new Department of Transportation (DOT)—approved ownership structure, Virgin America is poised for major growth in 2010 — with the addition of five new destinations planned for the remainder of 2010, including Toronto and Orlando. By the first quarter of 2011, the airline expects its fleet will have grown by almost one-third.
Although Virgin America does not yet meet the size threshold to be classified a "major" carrier by DOT, the airline tracks its on-time performance, baggage handling and other key operational statistics in advance of DOT's requirement to report. For full year 2009, Virgin America outperformed most of the industry, with 85.3 percent of its flights arriving as scheduled in 2009. The 85.3 percent A14 on-time ranking would have placed the carrier second among all U.S. carriers in 2009 — behind only Hawaiian Airlines for on-time performance, when compared to DOT's reported data. The airline's completion factor was 99.8 percent — the highest rate among domestic carriers when compared to DOT's reported data. Virgin America's baggage handling rate for 2009 was 1.23 mishandled baggage reports per 1000 guests, versus the industry average of 3.91 mishandled baggage reports per 1000 guests. The airline's baggage performance would have placed it first among all U.S. carriers for reliability in 2009, when compared to DOT's reported data. DOT's Air Travel Consumer Report covers operational statistics for the nation's 19 largest airlines and is available at:
In 2009, Virgin America continued its year-over-year sweep of the major reader-based travel industry awards, including:
- "Best Domestic Airline" in Travel + Leisure's 2009 World's Best Awards
- "Best Domestic Airline" in Condé Nast Traveler's 2009 Readers' Choice Awards
- "Best Business/First Class" among domestic airlines in Condé Nast Traveler's 2009 Business Travel Poll
- "Best in Class" for overall quality in First and Economy in Zagat's Annual Airline Survey
- "Best Domestic Airline" for Food in Travel + Leisure's World's Best Food Awards
Although a privately held company, Virgin America is announcing these earnings results in advance of DOT's quarterly reports.
Virgin America flies to San Francisco, Los Angeles, New York, Washington D.C., Seattle, Las Vegas, San Diego, Boston, Orange County (ends May 26), Fort Lauderdale, Toronto (starting June 23) and Orlando (starting August 19). Virgin America has flown over 7.5 million guests since its inaugural flights in August 2007 and now counts over 1.3 million Elevate frequent flyer 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. 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. For more please visit: www.virginamerica.com