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Virgin America Reports Losses Second Quarter 2011 Financial Results

Grandpa +65

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Virgin America Reports Second Quarter 2011 Financial Results

Airline Reports 46 Percent Increase in Operating Revenues





Press Release Source: Virgin America On Friday September 16, 2011, 1:30 pm EDT
SAN FRANCISCO, Sept. 16, 2011 /PRNewswire/ -- Virgin America today reports its financial results for the second quarter of 2011. During a period of significantly higher fuel prices, Virgin America recorded a $6.0 million operating loss and an operating margin of (2.2) percent. The airline achieved impressive revenue growth during the quarter, with a 46 percent increase in operating revenue as compared to the second quarter of 2010. However, total fuel costs increased by 62 percent, and the Company's average price per gallon of fuel increased by 26 percent year-over-year. The increase in fuel costs were the primary factor in a $5.6 million increase in Virgin America's operating loss, as compared to the second quarter of 2010. The airline's unit revenue continued to show significant growth, with revenue per available seat mile (RASM) improving by 12 percent year-over-year, exceeding the domestic industry average RASM increase of 10 percent for the same period. Excluding new routes added in the past 12 months, RASM in the carrier's established markets improved by 19 percent year-over-year. During the quarter, the carrier's scheduled capacity increased by 30 percent, compared to the domestic industry's average capacity increase of two percent for the same period. The airline's mature routes (those flown for more than 12 months) were solidly profitable on an operating basis for the quarter.
(Logo: http://photos.prnewswire.com/prnh/20090123/VIRGINAMERICALOGO )
"Fuel costs continue to weigh on our financial performance even as we achieve and exceed our revenue targets," said Virgin America President and CEO David Cush. "While it is disappointing to report even a narrow operating loss for the quarter, our mature markets performed exceptionally well. Against the headwinds of high fuel and the costs of growth as a new airline, we're pleased with our consistent progress and sales performance."
Non-fuel cost per available seat mile (CASM) increased by eight percent over the quarter, as the carrier continued to invest in its teammates, new aircraft and infrastructure to support its growth. As compared to the second quarter of 2010, Virgin America increased its average aircraft in revenue service by 36 percent – or by 10 aircraft. In addition, the Company added the full-time-equivalent of 125 teammates during the quarter, incurring recruiting and training costs as the carrier continues to fuel expansion. As one of the few U.S. airlines creating new jobs, total teammates grew by 23 percent (or 367 full-time equivalent teammates) as compared to the second quarter of 2010.
High fuel prices remained a challenge for both Virgin America and the overall domestic industry during the second quarter of 2011. Had fuel prices remained flat year-over-year, the Company's operating costs would have been $23 million lower in the second quarter of 2011. The Company's recorded fuel costs include a $7.2 million non-cash loss on its hedging positions. Although Virgin America maintained a hedge portfolio against rising crude oil prices, the recent major increase in the crack spread, or difference between raw crude prices and refined jet fuel, was a major factor in the overall cost of jet fuel recorded by the Company in the quarter.
As one of the few growing U.S. airlines, Virgin America continues to expand its fleet, growing from 28 aircraft in service in the first quarter of 2010,to 46 aircraft by the end of 2011 and a projected 52 aircraft by the end of 2012. Virgin America recently announced new service to Puerto Vallarta, Mexico, and continues to expand its network from its focus cities of San Francisco and Los Angeles. In the past twelve months, the carrier has introduced its unique, low-fare service to Chicago, Dallas-Fort Worth, Los Cabos, Cancun and Orlando.
"The next 12 months are an important growth phase for Virgin America as we increase our fleet to 52 aircraft and expand our network. Our teammates continue to rise to the challenge of growing our Company, while delivering an award winning product. We are executing well on our long-term vision for Virgin America, with added frequency in our core markets and new warm weather destinations. Our strong revenue performance, loyal following of flyers and the cost leverage we gain with growth, will allow us to continue building a successful airline as we emerge from our current growth cycle," added Cush.
Second Quarter 2011 Reporting Highlights:

  • Operating results: The airline reported a $6.0 million operating loss in the second quarter. The airline's yield per passenger mile was 12 cents, up 12 percent compared to the second quarter of 2010.
  • Load factors: The airline reported an 83 percent load factor in the second quarter, on a 30 percent increase in scheduled service capacity over the year earlier quarter – compared to the industry's average capacity increase of two percent.
  • Top line progress: RASM gains continued to outpace industry RASM gains, with a RASM increase of 12 percent over second quarter of 2010 – a period in which the domestic industry's RASM increased by 10 percent. Virgin America's average fare increased 11 percent versus the prior year.
  • Cost control: Operating expense per available seat mile excluding fuel (ex-fuel CASM) increased by 8 percent versus second quarter 2010, primarily as a result of investment in the Company's growth (training, people and aircraft in modification).
  • Cash: The airline ended the quarter with $26 million in unrestricted cash and $53 million in total liquidity.

With respect to the third quarter of 2011, the airline has seen significant year-over-year increases in traffic, bookings and average fares. The airline will release its third quarter results later this year.
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 the DOT's requirement to report. For the second quarter of 2011, Virgin America achieved an 82.3 percent cumulative A-14 on-time ranking, which would place the carrier third for on-time performance among all reporting major U.S. carriers for the quarter. Virgin America also outperformed the majority of the industry with a 99.8 percent completion factor. The airline's baggage handling rate for the second quarter was .86 mishandled baggage reports per 1000 guests, which would place it first among all reporting U.S. carriers for baggage reliability in the second quarter, when compared to DOT's reportable data.
Since its 2007 launch, Virgin America has experienced record-setting growth – with 2,100 new jobs created, more than 14 million guests flown and a sweep of the major reader-based travel awards, including "Best Airline" in both Conde Nast Traveler's Readers' Choice Awards and Travel + Leisure's World's Best Awards. In the spring of 2011, the airline became an anchor tenant at San Francisco International Airport's (SFO) new sleek and sustainable Terminal 2 (T2).
Other key milestones achieved in the second quarter of 2011 include:






http://finance.yahoo.com/news/Virgin-America-Reports-Second-prnews-2664148012.html?x=0&.v=1
 

Fubijaakr

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Cash: The airline ended the quarter with $26 million in unrestricted cash and $53 million in total liquidity.

Still losing money and running out of cash? So sad....

NOT!
 
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pilotpm

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Cash: The airline ended the quarter with $26 million in unrestricted cash and $53 million in total liquidity.

Still losing money and running out of cash? So sad....

NOT!

Fubi/Fish, It took you a whole 12 minutes to reply. Your slipping! A year ago it would've been you that posted this. Your google alert for VA not working?
 

mvedepo

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First Qtr - The airline ended the quarter with $25 million in unrestricted cash and $54 million in total liquidity.

Second Qtr - The airline ended the quarter with $26 million in unrestricted cash and $53 million in total liquidity.

How does that happen with a $21.7 million loss? Makes you wonder. :beer:
 

hyflyin

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Who really cares anymore as each quarter has had the same result for 5 years running.

There will be no profit until close to the IPO. There will be no pay raise because the investors are collecting theirs, while we, the employees, continue to take it up the poop shoot (rather fitting since we are headquartered in SFO).

Maybe we can get a monthly vaseline allotment.
 

Fubijaakr

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There will be no pay raise because the investors are collecting theirs, while we, the employees, continue to take it up the poop shoot (rather fitting since we are headquartered in SFO).

Maybe we can get a monthly vaseline allotment.

Don't biatch. YOU agreed to work for substandard wages. Enjoy.

Losers.
 

xjhawk

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again with you....you like the regional and national boards.....where do you work? let me guess.....gods gift to flight and think everyone wants to hear your opinions? try saying something nice once in a while-people might like you better
 

pilotpm

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try saying something nice once in a while-people might like you better

If your talking about Fubi/Fish, you are waisting your breath. I would hate to be stuck on an Alaska flight deck with him.
 

Fubijaakr

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try saying something nice once in a while-people might like you better

I guess the truth hurts. And here's a news flash for you. I don't give a fig if anonymous webboard users like me.

So put that in your pipe and smoke it.
 

hyflyin

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Don't biatch. YOU agreed to work for substandard wages. Enjoy.

Losers.

Awe, so you say nothing when things are not right at your current place of employment? Simply stating truths to my fellow employees.

Your a tool and I could care less what you have to say or think. In fact, we all know your an embarassment to your fellow employees.

So- "put that in that in YOUR pipe and smoke it" and feel free to choke on it.

Oh, I almost forgot. Thanks for all the rides, I love your airline, very comfy! I always enjoying sharing Virgin with people, but only when they ask, which is every leg. Sorry, I just can't be rude and not answer their questions. I do however always plug AS and let them know it's a decent airline.

Ignored
 
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xjhawk

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Fubi-I just figured you out. You are the quietest person at your airline and are too scared to voice your opinions to people in person because it is not anonymous. your idiot rants and opinions flourish on these web boards because if anyone who you work with found out your true opinions, they would not socialize with you. If anyone asks-I tell them who I am in a personal message. On our company boards, I have my name listed right on my signature. My opinions at home, at work, and on these boards are no different. I am proud of my opinions and not scared and hide while I rip people apart (BTW I do not put people down or their career to make myself feel better like you do)

I will say it again, try being nice. it goes a long way in life.
 

Fubijaakr

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Awe, so you say nothing when things are not right at your current place of employment? Simply stating truths to my fellow employees.

Your a tool and I could care less what you have to say or think. In fact, we all know your an embarassment to your fellow employees.

Somehow, being scolded by someone who lacks 4th grade English skills is more amusing than hurtful.
 

Fubijaakr

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Fubi-I just figured you out. You are the quietest person at your airline and are too scared to voice your opinions to people in person because it is not anonymous. your idiot rants and opinions flourish on these web boards because if anyone who you work with found out your true opinions, they would not socialize with you.

If you only knew how wrong you are. Not only does everyone know who I am, but they know what I stand for. The best part, MOST of them (the ones who don't have to suck up to Virgin to commute) agree with me.
 

mvedepo

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Fubi,

If you are SO proud in what you stand for what's your REAL name?

Or are you are like the KKK, Al Qaeda, and anyone else that is so "right" but always afraid to show their face?
 

jayme

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This message is hidden because Fubijaakr is on your ignore list.

It's that easy guys.
 

NEDude

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It makes no sense for a privately held company to report a profit, all it means is more taxes. As stated by others, there will be no profit until the IPO nears. There is a very clear pattern here - a privately held company reports consistently narrow losses, cash remains near constant, while the company continues to grow and invest a lot of money in its infrastructure (expanding HQ, new aircraft, new training facilities, etc). For most people here it is pretty clear, unfortunately it is still too confusing for fubi.
 
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