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Virgin America reveals 4Q and full year 2009 financial results

Virgin America has reported its financial results for the fourth quarter and full year 2009 with the still-fledgling airline posting a $48 million operating loss for the year.

The airline claims “significant top line progress” for its second full year of operations. As mentioned for the full year 2009, Virgin America reported a $48 million operating loss. This was based on revenues of $548 million – a $140 million (or 74%) year-over-year improvement over 2008. In 2009, the company also reported its first quarterly operating profit in the third quarter.

Noting that the revenue and demand environment remained challenging in the final quarter of 2009, Virgin America sasys its results indicate strong revenue performance, industry-leading load factors, and improved unit costs for the fourth quarter. The airline narrowed its operating loss by $11 million year-over-year in the fourth quarter, improving its operating margin by 10.9 percentage points. The carrier also reported a 47% increase in scheduled service capacity year-over-year.

“We’re very pleased with the strong and steady progress we’ve made in operating income, unit costs and unit revenue in our second full year of operations,” commented Virgin America president and CEO David Cush. “Given both the recession and the fact that 2009 was one of the most challenging airline revenue environments in recent memory, we’re proud of how far we have come. Our progress to date is a testament to our unique business model, the growing loyalty of our guests and the dedication of our entrepreneurial team.”

In 4Q09 the airline reported a $10 million operating loss on revenues of $153 million, an improvement of 51% over the fourth quarter of 2008. This was aided by record load factors, such as the 84.3% achieved in the fourth quarter of 2009 – a 3.1 pp improvement over the 4Q08, despite a 47% increase in scheduled service capacity (ASMs) for the quarter.

Revenue in 4Q09 was up by 29% versus 4Q08. Virgin America’s stage-length adjusted guest unit revenue was essentially flat (down 1.0%) versus the fourth quarter of 2008, during a period in which the industry’s unit revenue declined by four percent overall. Unit costs (CASM) dropped by 18% while ex-fuel CASM dropped by 24%, as the airline was able to increase capacity at a very low marginal cost.

“With solid financial progress, excellent operational performance and a unique service that is continuing to hit the mark with consumers, we’re optimistic about the improving revenue environment and look forward to expanding to five new destinations in 2010,” added Cush.

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