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Virgin America’s net 2Q income increases 75% year-over-year

Virgin America’s financial results for the second quarter of 2015 (2Q15) mark the carrier’s highest ever quarterly net income, which rose 75.7% from $36,983,000 in the second quarter of 2014 (2Q14) to $64,989,000.This was achieved with no change in capacity. The airline ended the quarter with 53 Airbus A320-family aircraft, unchanged from the second quarter of 2014. 2Q15’s available seat miles grew by 0.1% in comparison with 2Q14, with revenue passenger miles also remaining relatively flat (increasing just 0.2%). The load factor went from 84.9% to 85.1% across the respective periods.In contrast, Virgin America hopes to increase by approximately 2 to 3% percent for the third quarter of 2015 as compared to the third quarter of 2014 and by 13% and 15% for the full year 2016.Passenger numbers grew by 4.4%, from 1,729,000 in 2Q14 to 1,805,000 for the same period this year, but the average fare reduced 3.8% from $207.09 to $199.30. This negative was offset by a large drop in cost per available seat mile and fuel cost per gallon. The former was reduced by 5.3%, whilst the latter decreased by 29.9%. Aircraft maintenance expenses also dropped by 22.9%.An overall decrease of 5.3% in operating expenses led to a 43.6% increase in operating income from $47,126,000 in 2Q14 to $67,658,000 in 2Q15.“Virgin America made great strides in improving its balance sheet and financial position during the second quarter of 2015,” remarked Peter Hunt, Virgin America's CFO. “We increased our unrestricted cash balance by $82 million during the quarter thanks to strong operating cash flow and the release of collateral held by our credit card partners. We also terminated a financing facility that will save us over $5 million in financing costs annually. In addition, we arranged bank debt financing for five A320 aircraft deliveries occurring later in 2015 at interest rates that will average under five percent. These accomplishments will continue to reduce Virgin America's cost of capital and position us for future earnings growth.”“Our latest quarterly results are an affirmation of Virgin America's business model – specifically, they demonstrate that we can deliver a better product and guest experience while also generating strong financial returns,” added David Cush, Virgin America's president and CEO. “The progress we have made on financial performance over the past two years is remarkable, and we continue to outperform domestic industry unit revenue trends. Our guests love the outstanding product and service that our teammates provide and it shows in our financial results.”

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