Airline Posted $175 Million Net Loss Through Q3 2008
They didn't want to do it, and argued with the Department of
Transportation they shouldn't have to... but on Tuesday, upstart
low-cost carrier Virgin America revealed the company's past
financial data for the fourth quarter of 2007 and the first three
quarters of 2008.
As expected by analysts, Virgin American posted an overall
operating loss. However, the $175.4 million net loss for the first
three quarters of 2008, on operating revenues of $259.6 million,
could be viewed as a respectable showing for a new airline,
competing in a tough market and slumping economy.
Also in the 'respectable' category is Virgin America's reported
77.6 percent load factor in the second quarter of 2008, and 81.4
percent load factor in the third quarter of 2008... signs the
airline is growing in popularity, which should translate to higher
revenues down the line.
"These results are consistent with our expectations -- with
steady quarter over quarter growth in unit revenue since launch,"
said Virgin America President and CEO David Cush. "This is an
industry with very high start-up costs and where large first year
losses are common. We're confident in our business model and are in
a strong position as a well-financed start-up with solid revenue
growth and load factors, a modern, fuel efficient fleet, a maturing
route network, and award-winning service the public has
"We're pleased with our progress to date, especially given fuel
price volatility and economic uncertainty in 2008," Cush continued.
"We believe our award-winning service, strong financing,
streamlined cost structure and impressive revenue performance is
the right recipe at a time when consumers are more discerning than
ever as to where they'll spend their hard-earned dollars. We're in
this for the long haul and are fully funded through our projected
profitability date -- a strong indication of our investors'
confidence in our business model."
The DOT recently denied Virgin America's request to keep its
financial information private. Virgin argued it shouldn't be forced
to reveal that data, as the airline is a privately-held company and
that information is "competitively sensitive and ripe for misuse by
the legacy carriers." Virgin also noted other small carriers have
been able to guard their financial data, as have international
carriers flying to the US.
Given the DOT's past history with Virgin America, however --
as ANN reported, the airline's start date was
held up for nearly a year due to questions over foreign ownership
concerns -- it's not particularly surprising DOT forced the