Virgin America’s operating losses doubled in 2011

Washington DC
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Virgin America's operating loss more than doubled to $27.4 million despite revenue growth outpacing capacity increases by 14 percentage points.

Surging fuel costs prevented the five-year-old start-up airline to post its first profit, even as Virgin America executives consider an initial public offering in 2013.

The carrier made some progress towards becoming profitable last year. In markets established longer than 12 months, Virgin America was profitable. Revenue per available seat mile increased by 11% compared to 2010, and the company's cash position improved to a record $160 million.

But the airline's fuel bill rose $105 million in 2011, wiping out previous potential gains. Operating costs excluding fuel increased 2.5% compared to 2010, as the airline absorbed new aircraft to enter new markets.

Fourth quarter results showed no real improvement. Virgin America posed an $8.1 million loss, although the ratio of the loss compared to revenues improved by three percentage points compared to the same period last year.