Virgin America announces 1Q09 financial results
Virgin America has reported its financial results for the first quarter of 2009, declaring steady year-over-year growth in unit revenue that exceeded the airline's projections.
"Despite the tough economic climate, the traditionally slow travel period, and an almost 70% increase in capacity, we saw significant improvements in load factor and unit revenue," said Virgin America President and CEO David Cush. "We are particularly gratified that this strong year-over-year performance was achieved in an industry environment in which most carriers generated significant unit revenue declines on large capacity reductions. Our first quarter financial results exceeded our projections and we foresee continued strong revenue growth through the spring and summer. We are confident that our unique business model, coupled with our industry-leading service and amenities, will continue to provide an unrivalled value proposition at a time when consumers are more discerning than ever."
Operating results show the airline reporting a $31.6 million operating loss on revenues of $101 million, a 38% improvement year-over-year.
The airline reported a 73% load factor in 1Q09, a 12 percentage point improvement over 2008, while still increasing its capacity by 69%. Traffic more than doubled year-on-year. Despite the weak economic environment, load factor increased each month during the quarter, from 68% in January to 71% in February to 78% in March. This trend continued in the second quarter, when the airline recorded the two highest load factor months in its history – 85% in April and 84% in May.
Virgin America reported that revenue in 1Q09 was up by 91% versus 1Q08. The carrier's unit revenue (RASM) in the 1Q09 was up by 13.2% versus the first quarter of 2008, while the unit cost (CASM) dropped by 24.3% from 12.50 cents to 9.46 cents.
This left the airline with $38 million in unrestricted cash and $63 million in total liquidity at the end of 1Q09, with full funding for its operation through its projected profitability date.
In the first quarter, Virgin America expanded its service with WiFi-enabled flights to Boston from both Los Angeles and San Francisco. This spring, the carrier also completed its roll-out of the Gogo Inflight Internet service across its fleet and became the first and only airline to offer WiFi on every flight and power outlets under every seat throughout the cabin.
Operationally, Virgin America achieved an 83.1% A-14 on-time performance for the first quarter. The carrier's mishandled baggage rate averaged 1.46 bags per 1000 guests, versus the industry average of 4.29 bags per 1000 guests.
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