Published on : Tuesday, November 4, 2014
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 28th, 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 23rd, 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 Condé Nast TravelerReaders’ 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 1st, 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.
Tags: virgin america
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