Posted on: 18 February 2015 by Ross McSweeny
Virgin America has reported its financial results for the fourth quarter and full year 2014, including a full year net income of $84.4 million, excluding special items.
Full year net income increased by $74.2 million over 2013’s figure – a seven-fold increase and the highest in the company's history. Operating and net income on a GAAP basis for the full year 2014 were $96.4 million and $60.1 million, respectively. RASM for the full year 2014 increased by 4.6% compared with 2013, to 12.17 cents.
The fourth quarter 2014 (4Q14) operating income was $34.2 million while net income was $28.1 million, excluding special items. This was the highest net income for a fourth quarter in the airline’s history and the ninth consecutive quarter of year-over-year improvement in income, excluding special items.
The company successfully completed its initial public offering (IPO) in November 2014, increasing cash by $214.4 million and significantly reducing outstanding debt. Virgin America ended the year with $394.6 million in total unrestricted cash and cash equivalents.
"2014 was a remarkable year for Virgin America on every front," declared David Cush, Virgin America's president and chief executive officer. "We achieved record profitability and significantly strengthened our balance sheet by going public in the second largest airline IPO in history. Both our existing and new investors have shown confidence in our low-cost, high-amenity business model – and we've continued to sweep the major travel awards for both operational excellence and our innovative service. Importantly, we've also continued to exceed the industry average in Revenue per Available Seat Mile (RASM) growth and also shown a significant RASM premium on some of the nation's most competitive business routes. Our 2014 results are a credit to both our guest-focused teammates and a consistent, award-winning product."
Virgin America recorded $24.2 million in expense related to certain special items during the fourth quarter 2014 that have been excluded from the above results. These include: $20.4 million for equity-related compensation recorded upon completion of the IPO and other related offering expenses; $1.0 million for costs associated with terminating service to Philadelphia International Airport and Dallas-Fort Worth International Airport; and $2.8 million of mark-to-market adjustments for hedges related to 2015 that did not qualify for hedge accounting treatment.