Courtesy, Virgin America/PR Newswire
Virgin America (VX) saw strong revenue growth for the 2011 third quarter, but higher fuel costs brought operating profit down by $4.8 million to $16.2 million and resulted in a $3.3million net loss.
The San Francisco-based low cost carrier released its third-quarter results Wednesday, reporting a 44% increase in operating revenue over the same period in 2010 and a 6% operating margin.
The airline's RASM improved by 9% year-over-year, on a 32%increase in capacity. Excluding new routes added in the past 12 months, RASM in the carrier's established markets improved by 17% year-over-year. However, total fuel costs for the quarter increased by 86% and the company's average price per gallon of fuel increased by 43% year-over-year. The increase in fuel costs was the primary factor in a $4.8 million decrease in VX operating income, the airline said.
VX also said it had raised an additional $150 million in a new four-and-a-half year debt facility funded in December, further improving the company's cash position. The company has also obtained lease financing commitments for 13 Airbus A320 family aircraft slated for delivery between October 2011 and September 2013. In addition, the company has closed on a financing facility for the majority of its pre-delivery payment obligations due on the first 20 aircraft within its order of 60 Airbus A320s, scheduled to begin delivery in the summer of 2013.
In January, VX announced a major fleet order that included 30 A320neos (ATW Daily News, Jan. 19).
"This increase in liquidity supports our long-term vision and growth plans for Virgin America. In addition, we have fully funded our aircraft capital requirements through the third quarter of 2013," VX president and CEO David Cush said.
Had fuel prices remained flat year-over-year, VX said its operating profit would have been $33 million higher in the third quarter.
Non-fuel CASM increased by 2% over the year-earlier quarter as the carrier continued to invest in new aircraft and infrastructure to support its growth.