Virgin America on Friday announced its financial results for the second quarter 2010 in which the air carrier reported a record-setting performance.
The airline reported revenues of $184 million which represents a 36 percent increase in revenue in comparison with the second quarter of 2009. Unit revenue (RASM) increased by 23 percent year-over-year.
Virgin has hedged 85 percent of its second quarter projected fuel requirements at an average crude oil call strike price of $82 per barrel in order to help manage fuel price volatility. Overall, the airline recorded an operating income of $10 million and a 5.6 percent operating margin for the quarter.
“Even with significant increases in fuel costs during the quarter, our top line progress continues to exceed our expectations as a young and growing airline. With revenue up by over one-third year-over-year, an unrivalled product and an award-winning team, we’re pleased with our Company’s trajectory in what is just our third year of operations,” said Virgin America president and CEO David Cush.
The airline reported a $430,000 operating loss, an improvement of 92 percent over the second quarter of 2009. Virgin’s $10 million profit represents an improvement of $23 million from the 2009 results.
Virgin America’s operating expense per available seat mile excluding fuel dropped by 6 percent, as the airline continued to increase capacity at a low marginal cost. The airline ended the period with $26 million in unrestricted cash and $100 million in total liquidity.
The airline operator has also witnessed significant increases in traffic, bookings and average fares in the current third quarter, in line with the overall positive trends for the industry. Virgin added four new destinations in 2010 and is planning one more destination to be unveiled in January 2011.
Last July, Virgin announced plans to order 40 new aircraft at the Farnborough International Airshow. The airline’s fleet is expected to grow by two-thirds by the end of 2011 and will triple in size by 2016.
The airline continues to invest in its new home at San Francisco International Airport’s (SFO) new Terminal 2. The $383 million project is anticipated to achieve Silver LEED Certification. When completed in 2011, the terminal will serve as the airline’s main base of operations.
