Virgin America Reports Third Quarter 2014 Earnings

SAN FRANCISCO, Nov. 3, 2014 /PRNewswire/ -- Virgin America today reports its financial results for the third quarter of 2014 with an operating income of $52.3 million and net income of $41.6 million. The airline posted an operating margin of 12.9 percent – a 1.4 point improvement over the third quarter of 2013, driven largely by a 5.5 percent growth in revenue per available seat mile (RASM) over the prior year period.

Third Quarter 2014 Financial Highlights

• Operating Revenue: Total operating revenue of $405.5 million, an increase of 4.7 percent over the third quarter of 2013.
• Revenue per Available Seat Mile (RASM): RASM increased 5.5 percent compared to the third quarter of 2013, to 12.60 cents. Year-over-year RASM growth was driven by a 0.6 percent increase in yield and a 3.0 point increase in load factor. The RASM performance continues the trend of strong RASM growth for the airline, which reported 9 percent RASM growth year-over-year for its Full Year 2013 results.
• Cost per Available Seat Mile (CASM): Total CASM increased 3.8 percent compared to the third quarter of 2013, to 10.98 cents. CASM excluding fuel costs for the quarter increased 5.5 percent year-over-year, to 6.84 cents, primarily due to a provision for teammate profit sharing. CASM, excluding both fuel and profit-sharing costs, increased 2.0 percent, to 6.61 cents.
• Operating Income: Third quarter of 2014 operating income increased by 17.9 percent over the third quarter of 2013 to $52.3 million with an operating margin improvement of 1.4 points year-over-year.
• Net Income: Net income for the quarter increased 24.2 percent year-over-year, from $33.5 million to $41.6 million. Virgin America's year-to-date net income improved by $60.2 million from a net loss of $4.0 million for the nine months ended September 30, 2013, to net income of $56.2 million for the nine months ended September 30, 2014.
• Capacity: Available seat miles (ASMs) for the third quarter of 2014 decreased 0.8 percent year-over-year. The airline ended the quarter with 53 Airbus A320-family aircraft.
• Liquidity: Unrestricted cash was $184.5 million as of September 30, 2014.

Operational Highlights

• In July, Virgin America secured the "Top Domestic Airline" ranking for the seventh consecutive year in the annual Travel + Leisure World's Best Awards readers' survey.
• In October, Virgin America continued to expand its network to more major business destination airports, with new service from Dallas' Love Field (DAL) that includes daily nonstop flights from DAL to Washington D.C's Ronald Reagan Washington National Airport (DCA), Los Angeles International Airport (LAX) and San Francisco International Airport (SFO). The airline also recently announced plans to add a fourth daily trip from DAL to DCA, SFO and LAX in April 2015. The airline is the only carrier at Love Field to offer three classes of service in these markets – including a First Class cabin and a Main Cabin Select premium economy service – as well as fleetwide WiFi, power outlets at every seat, a full-service food menu, confirmed seating and personal seatback entertainment for every guest.
• On October 28^th, the airline opened new service at New York's LaGuardia Airport (LGA) – with four daily nonstop flights between DAL and LGA – airports preferred by business travelers for their proximity to downtown Dallas and Manhattan respectively. LGA becomes the third major airport in the New York City-area served by Virgin America.
• On October 23^rd, Virgin America launched its fourth codeshare agreement with one of Asia's leading carriers, China Airlines. These commercial arrangements, along with Virgin America's existing 28 interline agreements, contribute to the airline's RASM growth by increasing inbound and outbound opportunities.
• Also in October, Virgin America was named "Best U.S. Airline" in the Conde Nast Traveler Readers' Choice Awards for the seventh consecutive year.
• Virgin America's Elevate frequent flyer program reached close to 3.4 million members, gaining over 100,000 new members during the quarter.
• Virgin America's point-to-point network allowed the airline to capitalize on seasonal opportunities from the East Coast in winter 2014-2015. On October 1^st, the airline announced new seasonal winter service between New York's John F. Kennedy International Airport (JFK) and Fort Lauderdale International Airport (FLL) as well as between Boston Logan International Airport (BOS) and Las Vegas McCarran International Airport (LAS).
• Virgin America introduced new virginamerica.com website design features, including the recently unveiled 30-day shop calendar in response to new self-booking business trends and feedback from the airline's most frequent flyers.

Virgin America is announcing these financial results in advance of the U.S. Department of Transportation quarterly reports.

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 seven consecutive years. In April 2014, Virgin America topped the annual Airline Quality Rating for the second consecutive year.  The airline's base of operations is San Francisco International Airport (SFO)'s sleek and sustainable Terminal 2. Virgin America flies to San Francisco, Los Angeles, New York (JFK and LGA), Newark, Washington D.C. (IAD and DCA), Las Vegas, San Diego, Seattle, Boston, Fort Lauderdale, Orlando, Dallas Love Field, Los Cabos, Cancun, Chicago, Puerto Vallarta, Palm Springs (seasonal), 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, 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. Virgin America's airport lounge, The Loft, is located at LAX and its Elevate frequent flyer program offers no black-outs or restrictions on rewards seats with three levels of status including Elevate Gold and Elevate Silver.  For more: www.virginamerica.com

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SOURCE Virgin America