Skip to main content
Advertising

Originally published Monday, May 13, 2013 at 4:17 AM

  • Share:
           
  • Comments (0)
  • Print

Virgin America posts 2012 loss; eyes possible IPO

Virgin America said it's close to turning around its financial losses and could be ready for an initial public offering as early as next year.

AP Airlines Writer

Most Popular Comments
Hide / Show comments
No comments have been posted to this article.
Start the conversation >

advertising

Virgin America said it's close to turning around its financial losses and could be ready for an initial public offering as early as next year.

The airline reported another annual loss on Monday, but it's aiming for a profit in the second half of the year after reworking debt it owes to Sir Richard Branson's Virgin Group and others. The improved finances should be one step on its way toward a public offering in late 2014 or in 2015, CEO David Cush said in an interview.

A share offering would be a way for Virgin Group and other shareholders to recoup some of their investments, Cush said. Virgin America, based in Burlingame, Calif., is privately held but reports its finances as part of financial disclosures required by the U.S. Transportation Department.

On Monday the airline said its 2012 net loss jumped 45 percent to $145.4 million. Virgin America started flying in 2007 but has not turned an annual profit.

It posted a fourth-quarter loss of $25 million, an improvement from its loss of $30.8 million a year earlier. In the first quarter of this year it lost $46.4 million, an improvement from its $76 million loss during the same period last year.

Full-year revenue rose 29 percent to $1.33 billion.

Virgin America has already deferred deliveries of new planes until 2015. Stopping its growth is a key part of making the airline profitable, Cush said.

It's also cutting interest payments.

Virgin America recently closed a deal that eliminates $290 million in debt, a majority of it owed to Virgin Group, Cush said. The debt was converted to "conditional equity," he said.

The U.S. caps foreign ownership of U.S. airlines at 25 percent. Cush said the debt transaction keeps its foreign ownership under that threshold and was approved by the Transportation Department. Discussion about reworking the debt began about six months ago, at the same time it was talking about delaying its aircraft deliveries. "We were certainly interested in doing it, but ultimately it was the call of the debt holders and the shareholders," he said.

Cush said it's too soon to know how much of the company might be offered to the public. It will depend on how well Virgin America is doing financially, how receptive investors are, and how much the current private shareholders are willing to sell.

First, though, it needs to fix its finances.

"People are going to want to see some profit" before they decide how much Virgin America is worth, he said.

News where, when and how you want it

Email Icon

Get ready for 2015

Get ready for 2015

The Seattle Times 12-month wall calendar features hand-picked photos of life in the Pacific Northwest. Order while supplies last!

Advertising

Advertising

The Seattle Times Historical Archives

Browse our newspaper page archives from 1900-1984


Advertising
The Seattle Times

The door is closed, but it's not locked.

Take a minute to subscribe and continue to enjoy The Seattle Times for as little as 99 cents a week.

Subscription options ►

Already a subscriber?

We've got good news for you. Unlimited seattletimes.com content access is included with most subscriptions.

Subscriber login ►