Virgin America Reports $25 Million Loss for Fourth Quarter
Virgin America Reports $25 Million Loss for Fourth Quarter
Virgin America, hit by rising fuel expenses and costs associated with its rapid expansion, said its fourth-quarter net loss widened to $25 million from $18.8 million a year earlier. For the full year, the airline narrowed its loss to $68.7 million, from $80.8 million in 2009.
The carrier sought to put a positive spin on results, pointing to a strong revenue performance with a 32 percent jump in revenue versus full year 2009. The airline reported revenues of $191 million for the fourth quarter of 2010 and $724 million for full year 2010 -- a year-over-year revenue increase of 25 percent and 32 percent, respectively (on a 17 percent year-over-year increase in capacity for the full year). For the full year 2010, Virgin America reported a $12 million operating loss on revenues of $724 million -- a 68 percent year-over-year improvement, and notable given that the airline's fuel costs also increased by $73 million for the same period due to higher fuel costs per gallon.
As the airline continued to deliver significant growth, it reported industry-leading unit revenue performance (RASM) with a 16 percent improvement in RASM year-over-year for full year 2010. The growing airline's stage-length adjusted guest unit revenue was also up 12 percent for the quarter and 20 percent for the full year. In 2010, the company reported its first quarterly net profit in the third quarter. Despite its revenue performance and its first quarterly net profit, the airline's full year 2010 results were lower than originally forecast primarily due to increased fuel costs, higher costs of growth and the impact of the East Coast storms.
"As a young airline still fueling growth, we continue to move in the right direction with our top line progress and revenue results, especially given the backdrop of global recession and an unprecedented run-up in oil prices since our 2007 launch," said Virgin America President and CEO David Cush. "For the last three years, our passenger unit revenue performance gains have surpassed industry performance. With a loyal base of flyers, an unrivaled product and the best service team in the business, we're pleased with our company's trajectory in what was just our third year of operations."
