PR Newswire SAN FRANCISCO, Sept. 10 SAN FRANCISCO, Sept. 10 /PRNewswire/ -- Virgin America today reported its financial results for the second quarter of 2010. The airline reported record-setting performance for the quarter with revenues of $184 million – a 36 percent jump in revenue versus the second quarter of 2009. Unit revenue (RASM) increased by 23 percent year-over-year. As the airline continued to expand significantly, it broke even on an operating basis for the quarter – an improvement of 92 percent year-over-year. Yield per passenger mile in the second quarter was 11 cents, up 28 percent compared to the second quarter of 2009. Adjusting for the non-cash unrealized losses on its fuel derivatives, the airline would have reported operating income of $10 million and a 5.6 percent operating margin for the quarter. Virgin America continued to hedge in order to help manage fuel price volatility. The airline has hedged 85 percent of its second half of 2010 projected fuel requirements at an average crude oil call strike price of $82 per barrel. (Logo: http://photos.prnewswire.com/prnh/20090123/VIRGINAMERICALOGO) (Logo: http://www.newscom.com/cgi-bin/prnh/20090123/VIRGINAMERICALOGO) "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. Despite the rough economic climate since our launch, we remain on track with our original projection of achieving a full year operating profit in 2010," said Virgin America President and CEO David Cush. "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." Second Quarter Reporting Highlights: The airline has seen significant increases in traffic, bookings and average fares in the third quarter of 2010, in line with the overall positive trends for the industry. The airline will release its third quarter results later this fall. Although a privately held company, Virgin America is announcing these second quarter earnings results in advance of the Department of Transportation's (DOT) quarterly reports. "We're encouraged by the exceptionally strong revenue environment in the third quarter. With expansion to several new cities, including more international destinations – we're optimistic about the months ahead," added Cush. Virgin America continues to experience significant growth with the addition of four new destinations in 2010 and one additional destination in January 2011. In July 2010, the growing airline placed one of the year's largest single aircraft orders at the Farnborough International Airshow – announcing plans to order 40 new aircraft. The airline's fleet is projected to grow by two-thirds by the end of 2011 and will triple in size by 2016. Since its 2007 launch, Virgin America has created 1,600 new jobs, welcomed more than nine million guests and has swept the major reader-based travel awards, including "Best Airline" in both Conde Nast Traveler's Readers' Choice Awards and Travel + Leisure's World's Best Awards. As the only airline based in San Francisco, the airline's growth has helped make San Francisco International Airport (SFO) one of the nation's few growing airports. In spring of 2011, the airline will become one of two anchor tenants at SFO's new Terminal Two. Although Virgin America does not yet meet the size threshold to be classified a "major" carrier by DOT, the airline tracks its on-time performance, baggage handling and other key operational statistics in advance of DOT's requirement to report. For the second quarter of 2010, Virgin America achieved an 86 percent cumulative A-14 on-time ranking, which would have placed the carrier third among all U.S. reporting carriers for on-time performance during the quarter. The airline also outperformed the majority of the industry with a 99.9 percent completion factor, which would have placed the carrier second among all U.S. carriers when compared to DOT's reportable data. The airline's baggage handling rate for the second quarter was .82 mishandled baggage reports per 1000 guests (versus the industry average of 3.31), which would have placed it first among all U.S. carriers for baggage reliability, when compared to DOT's reportable data. In the second quarter of 2010, Virgin America continued to win awards for its sustainability record, including: Other key accomplishments achieved during the second quarter of 2010 include: Virgin America flies to San Francisco, Los Angeles, New York, Washington D.C., Seattle, Las Vegas, San Diego, Boston, Fort Lauderdale, Toronto, Orlando (starting October 6, 2010), Dallas-Fort Worth (starting December 2010), Los Cabos (starting December 16, 2010) and Cancun (starting January 19, 2011). Virgin America Inc. Statements of Operations (in thousands) Three months ended June 30, Percent 2010 2009 Change OPERATING REVENUES Guest $ 167,684 $ 119,280 40.6 Other 16,764 16,645 0.7 Total operating revenues 184,448 135,925 35.7 OPERATING EXPENSES Aircraft fuel 70,168 31,291 124.2 Aircraft rents 27,921 26,220 6.5 Wages, salaries and related costs 26,053 21,670 20.2 Aircraft maintenance 8,571 7,915 8.3 Landing fees and other rents 16,193 15,181 6.7 Sales and marketing 15,756 13,704 15.0 Guest services and supplies 7,850 8,039 (2.3) Depreciation 2,410 4,400 (45.2) Other operating expenses 9,956 12,827 (22.4) Total operating expenses 184,878 141,247 30.9 Operating income (loss) (430) (5,322) 91.9 Operating margin (0.2%) (3.9%) 3.7 pts Other (income) expense 15,099 10,454 44.4 Net income (loss) $ (15,529) $ (15,776) 1.6 EBITDA $ 1,980 $ (922) 314.6 EBITDAR $ 29,901 $ 25,298 18.2 Adjusted for unrealized (gains) losses on fuel derivatives: EBITDAR $ 40,601 $ 18,132 123.9 Operating income (loss) $ 10,270 $ (12,488) 182.2 Operating margin 5.6% (9.2%) 14.8 pts Virgin America Inc. Statements of Operations (in thousands) Six months ended June 30, Percent 2010 2009 Change OPERATING REVENUES Guest $ 299,715 $ 209,610 43.0 Other 31,533 27,104 16.3 Total operating revenues 331,248 236,714 39.9 OPERATING EXPENSES Aircraft fuel 124,673 56,401 121.0 Aircraft rents 55,812 52,435 6.4 Wages, salaries and related costs 53,312 42,711 24.8 Aircraft maintenance 17,929 17,251 3.9 Landing fees and other rents 32,577 29,430 10.7 Sales and marketing 27,585 25,164 9.6 Guest services and supplies 15,609 14,930 4.6 Depreciation 5,627 8,902 (36.8) Other operating expenses 20,177 25,245 (20.1) Total operating expenses 353,301 272,469 29.7 Operating income (loss) (22,053) (35,755) 38.3 Operating margin (6.7%) (15.1%) 8.4 pts Other (income) expense 29,007 20,327 42.7 Net income (loss) $ (51,060) $ (56,081) 9.0 EBITDA $ (16,426) $ (26,853) 38.8 EBITDAR $ 39,386 $ 25,582 54.0 Adjusted for unrealized (gains) losses on fuel derivatives: EBITDAR $ 52,720 $ 14,626 260.4 Operating income (loss) $ (8,719) $ (46,711) 81.3 Operating margin (2.6%) (19.7%) 17.1 pts Virgin America Inc. Comparative Operating Statistics Three months ended June 30, PercentVirgin America Reports Second Quarter 2010 Financial Results
Airline Reports 36 Percent Increase in Revenue Year-Over-Year