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 /PRNewswire/ -- 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.

Executive Commentary

"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."

Fleet Plan

  • 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.

 

Virgin America, Inc.


Consolidated Statements of Operations - Unaudited


For the Three and Twelve Months Ended December 31, 2013 and 2012


(in thousands)

















Three months ended





Twelve months ended





December 31





December 31





2013


2012


% Change



2013


2012


% Change
















Passenger revenue

$    326,979


$    316,924


3.2



$    1,289,268


$    1,215,178


6.1


Other revenue

$      32,948


$      33,492


(1.6)



$       135,410


$       117,659


15.1


Total operating revenue

$    359,927


$    350,416


2.7



$    1,424,678


$    1,332,837


6.9






























Aircraft fuel

$    124,402


$    130,805


4.9



$       507,035


$       537,501


5.7


Aircraft rent

$      46,012


$      61,848


25.6



$       202,071


$       236,800


14.7


Salaries, wages and benefits

$      52,862


$      46,641


(13.3)



$       196,477


$       176,216


(11.5)


Landing fees and other rent

$      31,315


$      27,857


(12.4)



$       122,621


$       110,165


(11.3)


Sales and marketing

$      27,353


$      26,086


(4.9)



$       106,599


$       107,136


0.5


Aircraft maintenance

$      14,162


$      16,396


13.6



$         61,854


$         58,934


(5.0)


Depreciation and amortization

$        4,196


$        3,033


(38.3)



$         13,963


$         11,260


(24.0)


Other operating expenses

$      36,035


$      32,643


(10.4)



$       133,177


$       126,558


(5.2)


Total operating expenses

$    336,337


$    345,309


2.6



$    1,343,797


$    1,364,570


1.5
















Operating income (loss)

$      23,590


$        5,107


361.9



$         80,881


$       (31,733)


 NM 
















Operating Margin

6.6%


1.5%


5.1

pts


5.7%


-2.4%


8.1

pts















Other expense

$        9,093


$      30,083


69.8



$         70,420


$       113,640


38.0
















Income (loss) before taxes

$      14,497


$    (24,976)


 NM 



$         10,461


$     (145,373)


 NM 
















Income tax expense

$           317


$             15


 NM 



$             317


$                15


 NM 
















NET INCOME (LOSS)

$      14,180


$    (24,991)


 NM 



$         10,144


$     (145,388)


 NM 


 







Three months ended

December 31




Twelve months ended

December 31




Key Operating Statistics








2013


2012


% Change


2013


2012


% Change















Available seat miles (ASMs)(millions)

3,052


3,092


(1.3)


12,243


12,514


(2.2)


Departures

14,926


14,041


6.3


58,215


56,362


3.3


Average stage length (miles)

1,426


1,551


(8.1)


1,474


1,567


(5.9)


Aircraft in service

53


52


1.9


53


52


1.9


Fleet utilization (blk hours per ac day)

11.0


11.2


(1.8)


11.1


11.9


(6.7)















Passengers (thousands)

1,577


1,502


5.0


6,329


6,219


1.8


Average fare 

$     207.33


$   211.06


(1.8)


$     203.70


$    195.38


4.3


Yield per passenger mile (cents)

13.64¢


13.32¢


2.4


13.14¢


12.26¢


7.2


Revenue passenger miles - RPMs (millions)

2,397


2,379


0.8


9,814


9,912


(1.0)


Load factor

78.5%


76.9%


1.6

pts

80.2%


79.2%


1.0

pts

Passenger revenue per available seat mile - PRASM (cents)

10.71¢


10.25¢


4.6


10.53¢


9.71¢


8.4


Total revenue per available seat mile - RASM (cents)

11.79¢


11.33¢


4.1


11.64¢


10.65¢


9.3















Cost per available seat mile - CASM (cents)

11.02¢


11.17¢


1.3


10.96¢


10.90¢


(0.5)


Cost per ASM, excluding fuel (cents)

6.94¢


6.94¢


-


6.83¢


6.61¢


(3.3)


Fuel cost per gallon

$          3.15


$        3.30


4.6


$3.17


$         3.33


4.8


Fuel gallons consumed (thousands)

39,516


39,640


0.3


159,326


161,404


1.3


Teammates (FTEs)

2,482


2,395


3.6








Additional Full Year 2013 Accomplishments

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.

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 Conde 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

Logo - http://photos.prnewswire.com/prnh/20090123/VIRGINAMERICALOGO

SOURCE Virgin America



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