San Francisco-based Virgin America narrowed its losses year-over-year for the first quarter, posting a $35.5 million loss versus a $40.3 million loss for the year prior.
The carrier's operating loss for the first quarter of 2010 was $21.6 million, an improvement from the $31.6 million posted a year ago. In a statement outlining its first quarter financial performance Virgin America claims if fuel prices remained constant year-over-year, it would have generated an operating profit during the first quarter.
The average cost per gallon of fuel for Virgin America in the first quarter grew 72% year-over-year as it consumption increased 27%.
During the first three months of 2010 Virgin America hedged 70% of its fuel consumption, and for the remainder of the year has hedged 85% of its projected consumption at an average crude call strike of $85 per barrel.
The carrier posted a 46% rise in revenues during the first quarter to $146 million as unit revenues grew by 21% to 8.29 cents.
Virgin America's overall expenses increased 28% year-over-year driven largely by fuel costs. Its unit cost excluding fuel fell 11% to 6.43 cents.
While its operating margin remains negative, Virgin America did improve that line item by 16 points to negative 15%.
The carrier's traffic grew 31% during the quarter on 27% growth in scheduled capacity, which led to a 4 percentage point rise in load factor to 76%.
Carrier CEO David Cush says despite the rise in Virgin America's fuel costs, "our top line progress continues to exceed our expectations and we remain on track for full year operating profit in 2010".
Virgin America ended the first quarter with $28 million in restricted cash and total liquidity of $102 million.
Source: Air Transport Intelligence news
