Virgin America announces first full year profit

Virgin America has reported its financial results for the full year 2013, featuring a net income for the whole of 2013 of $10.1 million, a positive swing of $155.5 million from a loss of $145.4 million in 2012.

This made 2013 Virgin America's first full year of profitability. The result was based on operating revenue for the year of $1.425 billion, a $92 million increase and 6.9% improvement over 2012.

Total RASM (revenue per available seat mile) increased 9.3% over 2012, to 11.64 cents. This was the highest year-over-year percentage increase in RASM of all major US airlines in 2013.

CASM (cost per available seat mile) excluding fuel costs increased 3.3%, to 6.83 cents. The airline says this “modest increase” was largely driven by its network changes that reduced aircraft utilisation by 6.7%. Total CASM increased by 0.5% to 10.96 cents.

Operating income was $80.9 million, compared with an operating loss of $31.7 million in 2012, an increase of $112.6 million. The 2013 operating margin was 5.7%, an increase of 8.1 percentage points over 2012.

Virgin America 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.

David Cush, Virgin America's president and chief executive officer, commented, “2013 was a year of tremendous progress. 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 centres in the US. Staying focused on creating a significantly better travel experience for customers and capitalising on our strong route network helped us achieve 9.3% unit revenue growth. Revenue per available seat mile (RASM) 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.”

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