Virgin America reported a $12 million operating loss

[Grandpa +65]

SAN FRANCISCO, April 21, 2011 /PRNewswire/ -- Virgin America today reported its financial results for the fourth quarter of 2010 and full year 2010. Against the backdrop of higher fuel costs and the 2010 winter storms, the airline reported strong revenue performance with a 32 percent jump in revenue versus full year 2009. The airline reported revenues of $191 million for the fourth quarter of 2010 and $724 million for full year 2010 – a year-over-year revenue increase of 25 percent and 32 percent respectively (on a 17 percent year-over-year increase in capacity for the full year). For full year 2010, Virgin America reported a $12 million operating loss on revenues of $724 million — a 68 percent year-over-year improvement, and notable given that the airline's fuel costs also increased by $73 million for the same period due to higher fuel costs per gallon. The airline reported a (1.7) percent operating margin for full year 2010. As the airline continued to deliver significant growth, it reported industry-leading unit revenue performance (RASM) with a 16 percent improvement in RASM year-over-year for full year 2010. The growing airline's stage-length adjusted guest unit revenue was also up 12 percent for the quarter and 20 percent for the full year. In 2010, the company reported its first quarterly net profit in the third quarter. Despite its revenue performance and its first quarterly net profit, the airline's full year 2010 results were lower than originally forecast primarily due to increased fuel costs, higher costs of growth and the impact of the East Coast storms.
(Logo: http://photos.prnewswire.com/prnh/20090123/VIRGINAMERICALOGO)
"As a young airline still fueling growth, we continue to move in the right direction with our top line progress and revenue results, especially given the backdrop of global recession and an unprecedented run-up in oil prices since our 2007 launch," said Virgin America President and CEO David Cush. "For the last three years, our passenger unit revenue performance gains have surpassed industry performance. With a loyal base of flyers, an unrivalled product and the best service team in the business, we're pleased with our company's trajectory in what was just our third year of operations."
The airline grew its fleet from 28 aircraft to 34 aircraft during 2010. The airline's yield per passenger mile for full year 2010 was 11 cents, up 16 percent compared to full year 2009. Virgin America continues to hedge in order to help manage fuel price volatility. The airline hedged 50 percent of its 2011 projected fuel requirements, with 77 percent of its first quarter 2011 requirements hedged at an average crude oil call strike price of $82 per barrel.
Although a privately held company, Virgin America is announcing these earnings results in advance of the Department of Transportation's (DOT) quarterly reports.
Full Year 2010 Reporting Highlights:

• Operating results: The airline reported an operating loss of $12 million (a 68 percent improvement year-over-year). This resulted in a (1.7) percent operating margin for the year (a 5.4 point improvement year-over-year).
• Load factors: Revenue passenger miles increased 15 percent on a 17 percent increase in capacity, resulting in a 2010 load factor of 82 percent – a drop of 1.3 points year-over-year.
• Top line progress: Revenue in 2010 was up 32 percent versus 2009. RASM increased by 16 percent year-over-year. The airline's stage-length adjusted guest unit revenue was up 20 percent versus 2009.
• Cost control: Operating expense per available seat mile excluding fuel (ex-fuel CASM) dropped 2 percent in 2010 even with investment to fuel growth (training, people and aircraft in modification), demonstrating the carrier's continued commitment to cost control.
• Cash: The airline ended 2010 with $30 million in unrestricted cash and $66 million in total liquidity.

http://finance.yahoo.com/news/Virgin-America-Reports-Fourth-prnews-1717135052.html?x=0&.v=1

 

[ualdriver]

More accurately, they lost 25M on 190M of revenue. Ouchy. That is significant bleed and cannot continue at this rate for the rest of the year without a cash infusion based on their reported cash balances.

I love it when airlines like to refer to "operating losses" when net losses are a bit more accurate, especially when airlines tend to be highly leveraged and should account for the hefty cost of interest on their debt. VA had some pretty significant expenses under "other" expenses that are not accounted for under their operating loss.

 

[Lake Alice]

It's all very interesting. The numbers don't lie but they don't tell the whole truth.

 

[strobzz]

More accurately, they lost 25M on 190M of revenue. Ouchy. That is significant bleed and cannot continue at this rate for the rest of the year without a cash infusion based on their reported cash balances.

I love it when airlines like to refer to "operating losses" when net losses are a bit more accurate, especially when airlines tend to be highly leveraged and should account for the hefty cost of interest on their debt. VA had some pretty significant expenses under "other" expenses that are not accounted for under their operating loss.

Ah,and how much did Con/Ual lose?

 

[ualdriver]

Ah,and how much did Con/Ual lose?

UNICAL had an operating profit this quarter. Again, not the whole story as they have a lot of debt and pay almost 1B per year in interest on that debt. They had a 213M loss on 8.2B of revenue. 77M of that loss is due to integration costs.

 

[strobzz]

UNICAL had an operating profit this quarter. Again, not the whole story as they have a lot of debt and pay almost 1B per year in interest on that debt. They had a 213M loss on 8.2B of revenue. 77M of that loss is due to integration costs.

Ual driver,
I see that you flew L-188`s,are you a X-Zantopper?

 

[iflysky]

http://www.flightglobal.com/articles/2011/04/22/355900/virgin-america-plans-aircraft-deferrals.html

 

[ualdriver]

Ual driver,
I see that you flew L-188`s,are you a X-Zantopper?

Maybe

 

[ualdriver]

http://www.flightglobal.com/articles/2011/04/22/355900/virgin-america-plans-aircraft-deferrals.html

Interesting.

I remember Cush stated in an candid interview back in late 2008 or early 2009 (?) that VA was on the brink of liquidating due to the high fuel costs the industry incurred back in the summer of 2008. If we get a spike like we did back then, or this one continues, they might not make it through the year. I can't find anything about VA's current cash burn rate, but it probably isn't pretty. Or then again, maybe they'll find some new investors to invest some cash.

 

[Fins Up]

Could you see the strings Branson was using to control him.

Interesting.

I remember Cush stated in an candid interview back in late 2008 or early 2009 (?) that VA was on the brink of liquidating due to the high fuel costs the industry incurred back in the summer of 2008. If we get a spike like we did back then, or this one continues, they might not make it through the year. I can't find anything about VA's current cash burn rate, but it probably isn't pretty. Or then again, maybe they'll find some new investors to invest some cash.

 

[weasel_lips]

Virgin America Records Loss

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BY SUSAN CAREY

Virgin America, hit by rising fuel expenses and costs associated with its rapid expansion, said its fourth-quarter net loss widened to $25.1 million from $18.8 million a year earlier.
"Current fuel prices basically consumed all of our profitability," David Cush, Virgin America's chief executive, said in an interview.
For the full year, the closely held discount carrier narrowed its loss to $68.7 million, from $80.8 million in 2009. Virgin America, which took wing in 2007, achieved its first ever net profit in the third quarter of 2010.
Revenue in last year's fourth quarter ...
http://online.wsj.com/article/SB10001424052748704889404576277051683714300.html?ru=yahoo&mod=yahoo_hs

 

[Tomct]

More accurately, they lost 25M on 190M of revenue. Ouchy. That is significant bleed and cannot continue at this rate for the rest of the year without a cash infusion based on their reported cash balances.

I love it when airlines like to refer to "operating losses" when net losses are a bit more accurate, especially when airlines tend to be highly leveraged and should account for the hefty cost of interest on their debt. VA had some pretty significant expenses under "other" expenses that are not accounted for under their operating loss.

If anyone is the "king" of spin it is UAL. one qtr losing billions and the next making it. I wish my check book worked like Tiltons. Just worry about yourselves and your shrinking growth plans and we will see you on the other side of this rising oil price. Good Luck!!

 

[ualdriver]

If anyone is the "king" of spin it is UAL. one qtr losing billions and the next making it. I wish my check book worked like Tiltons. Just worry about yourselves and your shrinking growth plans and we will see you on the other side of this rising oil price. Good Luck!!

Tomcat, show me where any of the above is "spin?" You just can't handle the truth, so you have to bash the messenger. I get it. I can take it.

Do you have a different analysis of VA's financials that is different? Please share. And since you guys have such a great relationship with management, would you mind dropping Cush an email and asking him what VA's current cash burn rate is? I just want all the facts so I won't have to "spin" anymore.

You might see us on the other side, you might not. If these crude oil prices continue, along with this high crack spread for Jet A, I am guessing not.

 

[NEDude]

Tomcat, show me where any of the above is "spin?" You just can't handle the truth, so you have to bash the messenger. I get it. I can take it.

Do you have a different analysis of VA's financials that is different? Please share. And since you guys have such a great relationship with management, would you mind dropping Cush an email and asking him what VA's current cash burn rate is? I just want all the facts so I won't have to "spin" anymore.

You might see us on the other side, you might not. If these crude oil prices continue, along with this high crack spread for Jet A, I am guessing not.

Not going to post specific numbers, but it is easy to glean. The amount of drop in liquidity directly corresponds to the amount of cash outlay for each new aircraft times the number of aircraft we took delivery of in the last part of last year. Not close to the same amount, EXACTLY, the same amount. So take that for what it is worth.

You also need to stop analyzing Virgin America the same way you do for publicly held airlines. They are different animals. Virgin America does not have to deal with profits/losses the same way a public company does.

The actions of the board of directors in recent months are not the actions of a group about to throw in the towel. Converting the MOU for new aircraft into a firm order, pay raises for the pilots, investing in a new training center in partnership with CAE. There is a lot of cash outlay that is going into funding the growth of this company.

Don't get me wrong, we are all concerned about the finances of the company. We as employees are watching it very closely. But keep this in mind - even though the numbers were just released to the public, the BOD has known them for some time. They were known by the BOD when they approved the pilot pay raise, and they were known by the BOD when the announced the training center partnership with CAE.

 

[ualdriver]

Not going to post specific numbers, but it is easy to glean. The amount of drop in liquidity directly corresponds to the amount of cash outlay for each new aircraft times the number of aircraft we took delivery of in the last part of last year. Not close to the same amount, EXACTLY, the same amount. So take that for what it is worth.

You also need to stop analyzing Virgin America the same way you do for publicly held airlines. They are different animals. Virgin America does not have to deal with profits/losses the same way a public company does.

The actions of the board of directors in recent months are not the actions of a group about to throw in the towel. Converting the MOU for new aircraft into a firm order, pay raises for the pilots, investing in a new training center in partnership with CAE. There is a lot of cash outlay that is going into funding the growth of this company.

Don't get me wrong, we are all concerned about the finances of the company. We as employees are watching it very closely. But keep this in mind - even though the numbers were just released to the public, the BOD has known them for some time. They were known by the BOD when they approved the pilot pay raise, and they were known by the BOD when the announced the training center partnership with CAE.

Unless you have access to private information, the above does not make any sense. Go to the VA homepage and read their quarterly consolidated earnings. 25M net loss on 190M of revenue? Your "liquidity" is dropping a lot faster that a few aircraft deposits, sorry. They did not make any statements concerning cash flow, which can be determined from a public airline's 10Q, but it can be inferred from their net loss that the burn is quite high at VA. I would also start to be concerned about "unrestricted" cash becoming "restricted" if the bleed continues, perhaps to meet loan covenants, or credit card requirements.

I don't know when you got your raise, but if I am not mistaken it was before our Libyan friend starting acting up and the resultant increase in crude oil prices. Unless your BOD is psychic, anything you infer about getting any sort of raise and everything being "OK" is a bridge too far for me.

 

[NEDude]

Unless you have access to private information, the above does not make any sense. Go to the VA homepage and read their quarterly consolidated earnings. 25M net loss on 190M of revenue? Your "liquidity" is dropping a lot faster that a few aircraft deposits, sorry. They did not make any statements concerning cash flow, which can be determined from a public airline's 10Q, but it can be inferred from their net loss that the burn is quite high at VA. I would also start to be concerned about "unrestricted" cash becoming "restricted" if the bleed continues, perhaps to meet loan covenants, or credit card requirements.

I don't know when you got your raise, but if I am not mistaken it was before our Libyan friend starting acting up and the resultant increase in crude oil prices. Unless your BOD is psychic, anything you infer about getting any sort of raise and everything being "OK" is a bridge too far for me.

I do have information that is given out to employees. There is a cost associated with the aircraft. It is not a "deposit". It involves the modification process to install the Virgin America interior. This is a cash outlay. I am not claiming the reduction in liquidity is a direct result of the new aircraft deliveries, but the numbers do match exactly. BTW I am not referring to the $25 million loss on $190 million in revenues, I am referring to the total liquidity reported by the airline as compared to the 3Q numbers.

As far as cash goes, "unrestricted" cash actually increased by 20%. This "unrestricted" cash has been increasing for the past two years, now at $30 million vs $22 million not too long ago, and $25 million at the end of Q3 2010.

Never claimed everything was "OK". As I stated "we are all concerned about the finances of the company". Also the Libyan crisis did arise after the BOD voted the pay raise. But this thread was about the 4th quarter and 2010 full year results. Those numbers were known by the BOD when the pay raise was voted in, and the new training center partnership was agreed to with CAE.

 

[ualdriver]

I do have information that is given out to employees. There is a cost associated with the aircraft. It is not a "deposit". It involves the modification process to install the Virgin America interior. This is a cash outlay. I am not claiming the reduction in liquidity is a direct result of the new aircraft deliveries, but the numbers do match exactly. BTW I am not referring to the $25 million loss on $190 million in revenues, I am referring to the total liquidity reported by the airline as compared to the 3Q numbers.

As far as cash goes, "unrestricted" cash actually increased by 20%. This "unrestricted" cash has been increasing for the past two years, now at $30 million vs $22 million not too long ago, and $25 million at the end of Q3 2010.

Never claimed everything was "OK". As I stated "we are all concerned about the finances of the company". Also the Libyan crisis did arise after the BOD voted the pay raise. But this thread was about the 4th quarter and 2010 full year results. Those numbers were known by the BOD when the pay raise was voted in, and the new training center partnership was agreed to with CAE.

Well, if you guys are getting numbers from your management, then it is public information. Let's hear 'em? Cush doesn't like to share with the rest of us, although he will be shortly....I just don't want to wait.

Unrestricted cash can fluctuate up and down as the airline meets (or doesn't meet) certain metrics determined by the people/entities that you owe money to. That could be a bank, a credit card company, or some investor who agreed to give you cash to keep you afloat or tide you over until the company is generating positive cash flow...or whatever else these guy want.

 

[NEDude]

Well, if you guys are getting numbers from your management, then it is public information. Let's hear 'em? Cush doesn't like to share with the rest of us, although he will be shortly....I just don't want to wait.

Unrestricted cash can fluctuate up and down as the airline meets (or doesn't meet) certain metrics determined by the people/entities that you owe money to. That could be a bank, a credit card company, or some investor who agreed to give you cash to keep you afloat or tide you over until the company is generating positive cash flow...or whatever else these guy want.

Why are you so interested in Virgin America's numbers? Is it really that important to you? It is not like Virgin America really has that much impact on United. Virgin America has only been around for 3.5 years, and United has been losing money for close to a decade.

When/if Virgin America goes public, you can read all of the numbers you want in the annual reports. Until then, you will just have to wait, or do some simple research on the internet yourself if you are all that interested - all of the information is out there, you just have to dig a little.

 

[ualdriver]

Why are you so interested in Virgin America's numbers? Is it really that important to you? It is not like Virgin America really has that much impact on United. Virgin America has only been around for 3.5 years, and United has been losing money for close to a decade.

When/if Virgin America goes public, you can read all of the numbers you want in the annual reports. Until then, you will just have to wait, or do some simple research on the internet yourself if you are all that interested - all of the information is out there, you just have to dig a little.

Please. Do you think I don't know how to find financial information for a company? Spare me the dig a little.

Small airlines like VA do have an impact. Virgin America drags down yields in just about every market they fly into. Since they hub in SFO, they obviously are of particular interest. Airlines like VA (Western Pacific, Legend, Vanguard, or pick the dozens of others that have come and gone) are part of the reason why major network carriers like United have "lost money for decades." Airlines like VA enter markets, charge fares they can't even make money on, take their pound of flesh, then fail. VA either failing or charging realistic fares is therefore of interest.

 

[Fubijaakr]

Please. Do you think I don't know how to find financial information for a company? Spare me the dig a little..

Disregard NEDude. He had to bring his "defend VX at any costs" show over here since he got banned at APC.