Posted on: 20 June 2014 by Mark Howells
Virgin America has announced its financial results for the first quarter of 2014 (1Q14), significantly narrowing its net loss from the same period in 2013 (1Q13) with a 51.8% year-over-year improvement.
The company’s total operating revenue of $313.4 million in 1Q14 equated to an increase of 4.0% over 1Q13. The revenue per available seat mile (RASM) increased 0.9%to 11.28 cents. Year-over-year RASM growth was impacted by the Easter and Passover travel peaks shifting to April in 2014 (in 2013, these holidays fell earlier in the year), as well as a more than four-fold increase in the percentage of cancelled flights from the year earlier period due to severe winter weather in 2014.
The airline’s cost per available seat mile (CASM) in 1Q14 increased 0.2% to 11.76 cents. CASM excluding fuel costs increased 2.4% year-over-year, to 7.59 cents. CASM was negatively impacted by the high level of cancellations, as well as a 6.9% decrease in average stage length.
The 1Q14 operating loss of $13.1 million was a $1.9 million improvement over Virgin America’s operating loss in the year prior. The operating margin improved by 0.8% year-over-year. The net lossin 1Q14 was $22.4 million, compared with a net loss in 1Q13 of $46.4 million, resulting in a $24.0 million year-over-year improvement.
Unrestricted cash was $132.9 million as of 31 March 2014, an increase of $74.8 million since 31 March 2013.
“Given our network’s focus on transcontinental flying to the East Coast and with 30% of our revenue generated by New York markets alone, we bore the brunt of this year’s winter storms with a significant increase in cancellations. Yet despite the challenging operating and financial environment brought on by the severe winter weather and a shift in holiday travel, Virgin America improved its year-over-year net results in the first quarter,” explained David Cush, Virgin America’s president and chief executive officer. “With our first full year of net income in 2013, this marks the sixth straight quarter that we have delivered improved year-over-year financial results. In addition, our continued sweep of the major travel awards remains a testament to the work of our 2,800 teammates who consistently deliver the best product in the skies — despite the tough operating conditions for the quarter.”
As of 1Q14, Virgin America had finalised the purchase of slot assets at Washington Reagan National Airport (DCA) and at New York’s LaGuardia Airport (LGA) that became available as part of the US Department of Justice (DOJ) settlement agreement resolving American Airlines’ merger with US Airways. With the further acquisition of new gates at Dallas Love Field which were made available in the same settlement process and with the support of Dallas consumers and local leaders, the airline will launch four new daily nonstop flights from DAL to LGA, three daily nonstop flights from DAL to DCA, and three daily nonstop flights from both Los Angeles International Airport (LAX) and San Francisco International Airport (SFO) to DAL beginning in October 2014.