VIRGIN AMERICA REPORTS FOURTH QUARTER AND FULL YEAR 2013 PROFIT
Airline Reports Fourth Quarter Net Income of $14.2 Million and Operating Margin of 6.6 Percent 2013 Net Income of $10.1 Million Marks First Full Year of Profitability with a $155.5 Million Improvement over 2012
San Francisco – March 26, 2014 – Virgin America today reports its financial results for the fourth quarter and full year 2013.
Fourth Quarter 2013 Financial Highlights
- Net Income: $14.2 million in net income, compared to a year ago quarterly loss of $25.0 million, an improvement of $39.1 million.
- Operating Revenue: Total operating revenue of $359.9 million, an increase of 2.7 percent from the fourth quarter of 2012.
- Revenue per Available Seat Mile (RASM): RASM increased 4.1 percent, to 11.79 cents. Both increased load factor (up 1.6 points to 78.5 percent) and yield (up 2.4 percent) contributed to the RASM improvement.
- Cost per Available Seat Mile (CASM): CASM excluding fuel costs remained the same year-over-year. Total CASM decreased 1.3 percent to 11.02 cents.
- Operating Income: $24 million in operating income, increased by $18.4 million year-over-year. Operating margin was 6.6 percent, an increase of 5.1 points from the fourth quarter of 2012.
- Capacity: Available seat miles (ASMs) decreased 1.3 percent during the fourth quarter. Stage length decreased 8.1 percent, to 1,426 miles.
Full Year 2013 Financial Highlights
- Net Income: 2013 net income of $10.1 million increased $155.5 million, from a loss of $145.4 million in 2012. 2013 was Virgin America's first full year of profitability.
- Operating Revenue: Total operating revenue for 2013 was $1.425 billion, a $92 million increase and 6.9 percent improvement over 2012.
- RASM: Total RASM increased 9.3 percent over 2012, to 11.64 cents. Virgin America achieved the highest year-over-year percentage increase in RASM of all major U.S. airlines in 2013.
- CASM: Excluding fuel costs, CASM increased 3.3 percent, to 6.83 cents. This modest increase was largely driven by network changes that reduced aircraft utilization by 6.7 percent. Total CASM increased by 0.5 percent to 10.96 cents.
- Operating Income: $80.9 million, an increase of $112.6 million from 2012's operating loss of $31.7 million. 2013 operating margin was 5.7 percent, an increase of 8.1 points over 2012.
- Capacity: Network changes led to a 2.2 percent decrease in ASMs for the full year. The average length of a flight (stage length) decreased by 5.9 percent, to 1,474 miles.
- 2013 Restructuring: The Company completed a debt restructuring in May 2013, eliminating more than $300 million of debt and accrued interest and reducing interest rates on a majority of the remaining debt.
- Liquidity: Year-end unrestricted cash balance was $155.7 million. Virgin America generated strong operating cash flow in 2013 of $51 million.
"2013 was a year of tremendous progress for Virgin America," said David Cush, Virgin America's President and Chief Executive Officer. "We continued to reach more customers in more markets and now have a network presence from San Francisco and Los Angeles to most of the primary business centers in the U.S. Staying focused on creating a significantly better travel experience for customers and capitalizing on our strong route network helped us achieve 9.3 percent unit revenue growth. Revenue per available seat mile is a critical measure of success, and our impressive performance in this area, coupled with our efficient cost structure and improvements to our capital structure, led to three consecutive profitable quarters and our first full year of net income."
- 2013 Additions: The airline took delivery of one additional A320 aircraft in the first quarter of 2013, increasing the total operating fleet to 53 Airbus A320-Family aircraft.
- Future Deliveries: The airline's total order with Airbus remains at 40 A320-Family aircraft, with five scheduled for delivery in the second half of 2015, five in the first half of 2016, and 30 scheduled for delivery starting in 2020.
Additional Full Year 2013 Accomplishments
- Virgin America brought its 53rd Airbus A320-Family aircraft into service — the Sharklet-equipped "Jersey Girl."
- In April, Virgin America inaugurated service between Newark and Los Angeles and San Francisco.
- In April, the carrier added new flights from Las Vegas to Los Angeles.
- In May, the carrier launched new flights from San Francisco to Austin.
- In September, the airline announced that it would bring back its popular nonstop seasonal flights between Palm Springs and New York for the 2013-2014 winter season.
- In 2013, Emirates and Virgin America launched a frequent flyer partnership that allows members of both airlines' loyalty programs to earn and redeem points or miles for travel across the networks of both airlines.
- In 2013, the airline implemented a frequent flyer and codeshare partnership with Singapore Airlines.
- Virgin America added 11 new interline partners in 2013, bringing the total number to 31.
Virgin America is announcing these financial results in advance of the Department of Transportation quarterly reports.
Photos of Virgin America's unique aircraft can be downloaded for media use here.
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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's Silicon Valley and known for its mood-lit cabins, three beautifully designed classes of service and innovative fleetwide amenities — like touch-screen personal entertainment, WiFi and power outlets at every seat, Virgin America has built a loyal following of flyers and earned a host of awards since launching in 2007 — including being named both the "Best U.S. Airline" in Condé Nast Traveler's Readers' Choice Awards and "Best Domestic Airline" in Travel + Leisure's World's Best Awards for the past six consecutive years. In April 2013, Virgin America topped the 2012 Airline Quality Rating, a research project conducted by faculty at Wichita State University and Purdue University that analyzes airline operational performance as reported by the Department of Transportation. The airline's base of operations is San Francisco International Airport (SFO)'s sleek and sustainable Terminal 2. Virgin America has created 2,700 jobs and flies to San Francisco, Los Angeles, New York, Newark, Washington D.C. (IAD and DCA), Las Vegas, San Diego, Seattle, Boston, Fort Lauderdale, Orlando, Dallas-Fort Worth, Los Cabos, Cancun, Chicago, Puerto Vallarta, Palm Springs (seasonal), Philadelphia, Portland and Austin. The Red™ touch-screen entertainment platform offers guests on every Virgin America flight their own seatback screen, with 25 films, live TV, interactive Google Maps, videogames, a 4,000 song library and an on-demand menu, which allows flyers to order a cocktail or snack from their seatback any time during a flight. In addition to a Main Cabin that offers custom-designed leather seating with a deeper, more comfortable pitch, the airline's First Class offers white leather seating with 55 inches of pitch, 165 degrees of recline and lumbar massagers. The carrier's Main Cabin Select option offers 38-inches of pitch, free food and cocktails, an all-access pass to media content, dedicated overhead bins and priority check-in/boarding. In 2012, Virgin America opened its first airport lounge, The Loft at LAX, and rolled out enhancements to its Elevate frequent flyer program — including status levels. For more: www.virginamerica.com