Virgin America releases financial results
Virgin America has reported 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 August 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.”
The start-up losses mentioned by Cush amounted to a $175.4 million net loss for the first three quarters of 2008 on operating revenues of $259.6 million. Load factors continuied to grow with 77.6% recorded in the second quarter of 2008 and 81.4% in the third quarter.
Quarter-over-quarter unit revenue improved by 28% in the first quarter of 2008, by 26% in the second quarter and by 10% in the third quarter. Despite a near doubling of capacity, unit revenue in the third quarter of 2008 increased by more than 75% 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.