Tag Archives: N844VA

Alaska to retire the Virgin America brand in 2019 but will adopt many brand elements

Alaska Airlines and Virgin America on March 22, 2017 shared their vision for the future of the combined carrier, as the company solidifies its status as the West Coast’s premier airline.

The group continued:

After careful consideration, the combined company will adopt Alaska’s name and logo, retiring the Virgin America name likely sometime in 2019. However, the combined airline will adopt many of the brand elements that Virgin America enthusiasts love about their favorite airline, including enhanced in-flight entertainment, mood lighting, music and the relentless desire to make flying a different experience for guests. The goal is to create a warm and welcoming West Coast-inspired vibe.

Alaska has been actively growing the airlines’ newly combined networks since closing the merger in December. Earlier this month, the airline announced 21 new markets with 25 new daily departures out of San Francisco, San Diego, Los Angeles and San Jose, California – marking the largest addition of routes in the company’s history.

Above Copyright Photo: Alaska Airlines (Alaska + Virgin America) Boeing 737-990 ER SSWL N493AS (msn 41727) (More to Love) LAX (Michael B. Ing). Image: 936924.

In addition to low fares, network growth and award-winning service, Alaska will spend the next few years making major enhancements to its already award-winning guest experience and incorporating favorite elements of the Virgin America experience.

Enhancements include:

Modern, warm and welcoming vibe – Guests will start to see some of the new Alaska brand personality come to life throughout 2017, to create a warm and welcoming West Coast vibe throughout the guest journey. Music from fresh new artists will be featured on planes, in airport lobbies and at gates. In 2018, Alaska will debut an entirely redesigned cabin with new seats and amenities, and has already started to retrofit select Boeing aircraft with expressive blue mood lighting. Modern, stylish uniforms by fashion designer Luly Yang will roll out in mid-2019 for flight attendants, customer service agents, pilots, mechanics and ground crew.
Satellite connectivity – Alaska’s entire fleet of Boeing 737 passenger aircraft will be equipped with high-speed satellite Wi-Fi beginning in fall 2018, with the remainder of the Airbus fleet to follow. Both fleets are expected to be fully satellite-equipped by the end of 2019.
More premium seats – Building on Alaska’s new First Class and Premium Class seating sections that debuted earlier this year, premium seating will be expanded across the Airbus fleet beginning in the fourth quarter of 2018. The number of First Class seats will increase by 50 percent (going from eight seats in the Airbus First Class cabin to 12) and are customized for enhanced comfort, featuring 41 inches of pitch, improved seatback storage pockets, cup holders, footrests and personal power outlets throughout the cabin. The redesigned Airbus cabins will also feature 18 new Premium Class seats with 35 inches of pitch and complimentary beer, wine and cocktails.
The country’s top-ranked frequent flier program – In 2018, Alaska Mileage Plan will become the sole loyalty program for both airlines, offering guests more rewards, an expansive global partner network and the only major airline loyalty program that still rewards a mile flown with a mile earned on Alaska and Virgin America flights. Members of Alaska Mileage Plan enjoy some of the most generous benefits in the industry including complimentary upgrades, award travel starting at 5,000 miles one-way (plus taxes and fees) and a faster path to elite status compared to other airlines. With Alaska and Alaska Global Partners, members can earn and redeem miles to more than 900 destinations worldwide.
Complimentary upgrades – With 50 percent more premium seats being introduced to the Airbus fleet, elite loyalty members will enjoy the most generous complimentary upgrades in the industry. Mileage Plan MVP Golds and above are upgraded to First Class or Premium Class 75 percent of the time (based on average historic system wide rates of upgrade) on Alaska Airlines flights. Complimentary upgrades on Airbus aircraft will debut for the first time ever in late 2018.
Free movies – In January, Alaska launched a temporary promotion offering its entire catalog of more than 200 movies and TV shows for free. Starting now, free entertainment on guests’ own devices will be a permanent feature on its Boeing fleet and the same free library of movies and TV shows will expand to Airbus aircraft via Red entertainment system in August 2017. Guests on Airbus aircraft will continue to enjoy access to early release movies for purchase.
Free Chat™ – In January 2017, Alaska became the first and only U.S. airline to offer Free Chat onboard and will expand Free Chat to Airbus-operated flights in August 2017. Guests can stay connected to friends and family on the ground via Facebook Messenger, WhatsApp and iMessage.
West Coast-inspired food and beverage – Alaska and Virgin America continue to enhance their fresh, healthy, West Coast-inspired onboard food and beverage menus. Guests of both airlines enjoy craft brews, premium wines and delicious food options. By June 2017, Alaska First Class passengers will be able to pre-select meals before they fly, and by early 2018, Alaska’s Main Cabin passengers will be able to pre-pay for their meals before they fly. Food pre-ordering will be extended to Airbus flights sometime in the future.
Lounge expansion – By early 2019, guests will be able to relax in refreshed and expanded airport lounges in Seattle, Portland and Los Angeles, as well as new lounges in San Francisco and at New York’s John F. Kennedy International Airport. The expansion plans will double the square footage of Alaska’s airport lounges. Members also currently enjoy access to more than 60 partner lounges throughout the United States and around the world.

Alaska Airlines and Virgin America along with their regional partners, fly 40 million customers a year to 118 destinations with an average of 1,200 daily flights across the United States and to Mexico, Canada, Costa Rica and Cuba.

Top Copyright Photo: Virgin America Airbus A320-214 N844VA (msn 4851) SEA (Michael B. Ing). Image: 928791 (all others by Alaska Airlines).

Alaska Airlines aircraft slide show:

Virgin America aircraft slide show:

Virgin America produces a second quarter GAAP net profit of $65.0 million

Virgin America (San Francisco) today reported its financial results for the second quarter of 2015. Key highlights from the second quarter include:

Second quarter 2015 net income was $64.4 million excluding special items1, an increase of $27.5 million from the second quarter of 2014. Operating income and operating margin excluding special items were $67.1 million and 16.7 percent, respectively.
On a GAAP basis, net income was $65.0 million. Operating income and operating margin on a GAAP basis were $67.7 million and 16.9 percent, respectively.
Fully diluted earnings per share excluding special items was $1.46. On a GAAP basis, fully diluted earnings per share was $1.47.

“Our latest quarterly results are an affirmation of Virgin America’s business model – specifically, they demonstrate that we can deliver a better product and guest experience while also generating strong financial returns,” said David Cush, Virgin America’s President and Chief Executive Officer. “The progress we have made on financial performance over the past two years is remarkable, and we continue to outperform domestic industry unit revenue trends. Our guests love the outstanding product and service that our teammates provide and it shows in our financial results.”

The airline continued:

Second Quarter 2015 Financial Highlights

Operating Revenue: Total operating revenue was $400.9 million, an increase of 0.5 percent over second quarter of 2014.
Revenue per Available Seat Mile (RASM): Passenger revenue per available seat mile (PRASM) increased 0.5 percent compared to the second quarter 2014, to 11.24 cents. Year-over-year PRASM growth was driven by a 0.2 point increase in load factor and a 0.3 percent increase in yield. Total RASM increased 0.6 percent year-over-year. Virgin America’s PRASM was positively impacted by a $3.2 million adjustment related to Elevate loyalty revenue, which increased PRASM by 0.9 percent.
Cost per Available Seat Mile (CASM): Total CASM excluding special items decreased 5.1 percent compared to the second quarter of 2014, to 10.43 cents. Decreases in fuel costs and reduced heavy maintenance activity contributed to the decline in CASM, partially offset by increases in salaries, wages and benefits. Salaries, wages and benefits costs included a $6.7 million accrual for teammate profit sharing and related payroll taxes. CASM excluding special items, fuel costs and profit sharing for the quarter increased 7.1 percent year-over-year, to 7.27 cents.
Fuel Expense: Virgin America realized an average economic fuel cost per gallon including taxes and the impact of hedges of $2.20, which was 29.3 percent lower year-over-year. This amount includes certain fuel expense adjustments described as special items below.
Special Items: Special items in the second quarter of 2015 relate to a net $0.6 million adjustment for fuel hedges that settled during the second quarter of 2015 but for which unrealized gains or losses had been previously recorded under GAAP and mark-to-market adjustments for fuel hedges that mature subsequent to June 30, 2015 which did not qualify for hedge accounting treatment.
Operating Income: Second quarter 2015 operating income excluding special items was $67.1 million, an increase of $20.0 million as compared to 2014. The Company’s operating margin excluding special items of 16.7 percent improved by 4.9 points year-over-year.
Net Income: Net income excluding special items for the second quarter increased by $27.5 million year-over-year to $64.4 million.
Fully Diluted EPS: Fully diluted earnings per share excluding special items was $1.46 for the second quarter of 2015. Second quarter 2015 fully diluted earnings per share was $1.47 on a GAAP basis.
Capacity: Available seat miles (ASMs) for the second quarter of 2015 remained flat year-over-year compared with the second quarter of 2014. Virgin America ended the quarter with 53 Airbus A320-family aircraft, unchanged from the second quarter of 2014. Subsequent to quarter end, the Company took delivery of the first of five Airbus A320 aircraft scheduled to be delivered in 2015.
Liquidity: Unrestricted cash was $500.5 million as of June 30, 2015. Virgin America benefited from the release of cash collateral held by its credit card processors in addition to strong operating cash flow performance to generate a net increase of $82.2 million in unrestricted cash during the quarter. The new agreement with its credit card processors also allowed the Company to terminate a $100 million letter of credit facility, resulting in ongoing annual savings of approximately $5.5 million per year.

“Virgin America made great strides in improving its balance sheet and financial position during the second quarter of 2015,” said Peter Hunt, Virgin America’s Chief Financial Officer. “We increased our unrestricted cash balance by $82 million during the quarter thanks to strong operating cash flow and the release of collateral held by our credit card partners. We also terminated a financing facility that will save us over $5 million in financing costs annually. In addition, we arranged bank debt financing for five A320 aircraft deliveries occurring later in 2015 at interest rates that will average under five percent. These accomplishments will continue to reduce Virgin America’s cost of capital and position us for future earnings growth.”

Second Half 2015 Outlook

The Company’s expectations for the second half of 2015 and full year 2016 are based on currently available information. These expectations are forward-looking, and actual results could differ materially depending on market conditions and the factors set forth under “Forward-Looking Statements” below. You should not place undue reliance upon these expectations.

The Company expects capacity, as measured by available seat miles, to increase by approximately 2.0 percent to 3.0 percent for the third quarter of 2015 as compared to the third quarter of 2014. Based on current revenue trends, the Company expects PRASM to decrease between 2.0 percent and 4.0 percent versus the third quarter of 2014. The Company expects CASM excluding fuel and profit sharing to increase between 10.5 percent and 11.5 percent versus the third quarter of 2014. CASM excluding fuel and profit sharing is increasing in the third quarter due primarily to Virgin America’s previously announced pay and benefit initiatives that were implemented earlier in the year. Third quarter CASM excluding fuel and profit sharing will also be impacted by a decrease in average stage length year over year of approximately 8.0 percent resulting from previously implemented capacity at Dallas — Love Field. In addition, the company expects to incur additional maintenance costs during the quarter related to an engine maintenance overhaul.

Based on Virgin America’s hedge portfolio and current market prices for aviation fuel products, the Company expects Virgin America’s economic fuel cost per gallon inclusive of related taxes and hedge costs to average between $1.90 and $2.00 for the third quarter of 2015. This number may change depending on fluctuations in market prices for jet fuel during the quarter.

Virgin America is scheduled to take delivery of five A320 aircraft during the second half of 2015, and expects to place four aircraft into operational service prior to year-end. The Company currently expects fourth quarter 2015 capacity to increase between 9.0 percent and 10.0 percent as compared to the fourth quarter of 2014. In addition, the company expects CASM excluding fuel and profit sharing to increase between 2.0 percent and 3.0 percent for the fourth quarter of 2015.

2016 Initial Outlook

The Company has completed its preliminary fleet and capacity plans for 2016. Virgin America currently expects to take delivery of an additional five A320 aircraft between January and June 2016. In addition, Virgin America does not expect to retire any existing aircraft from its fleet, ending 2016 with 63 aircraft in its operating fleet.

Further, the Company currently expects capacity, as measured by available seat miles, to increase between 13% and 15% for the full year 2016. The Company is also targeting for its CASM excluding fuel costs and profit sharing to decrease between 1% and 2% for the full year 2016 based on these fleet and capacity projections.

1 Please see “GAAP to Non-GAAP Reconciliations” for reconciliations of non-GAAP financial measures used in this release and the reasons management uses these measures.

Copyright Photo: Michael B. Ing/AirlinersGallery.com. Virgin America will end 2016 with 63 Airbus A320 Family aircraft. Airbus A320-214 N844VA (msn 4851) taxies to the runway at Seattle-tacoma International Airport bound for the San Francisco hub.

Virgin America aircraft slide show:

Virgin America Route Map (click the map for the full size):

Virgin America announces two new seasonal routes to Fort Lauderdale and Las Vegas

Virgin America (San Francisco) today announced two new seasonal routes – daily nonstop service between New York’s John F. Kennedy International Airport (JFK) and Fort Lauderdale-Hollywood International Airport (FLL) and four times weekly service between Boston Logan International Airport (BOS) and Las Vegas McCarran International Airport (LAS).

Additionally, the airline announced today that it will operate two extra roundtrip frequencies weekly between Las Vegas-New York (JFK) over winter and early spring to bring weekly frequencies on this popular route from the current seven to nine.

Schedule:

Virgin America’s 2014-2015 new seasonal services are as follows:

December 18, 2014 – April 28, 2015

JFK- FLL: depart 8:00am and arrive 11:05am daily.
FLL- JFK: depart 9:15am and arrive 11:55am daily.

January 8, 2015 – April 28, 2015

BOS-LAS: depart 10:30am and arrive 1:40pm on Monday, Friday, Saturday and Sunday.
LAS-BOS: depart 2:50pm and arrive 10:40pm on Friday, Saturday and Sunday.
LAS-BOS: depart at 3:35pm and arrive 11:25pm on Thursday.

January 5, 2015 – April 28, 2015*

JFK-LAS: depart at 11:35am and arrive 2:35pm on Wednesday and Thursday.
LAS-JFK: depart at 3:10pm and arrive at 11:00pm on Monday.
LAS-JFK: depart at 3:35pm and arrive at 11:25pm on Wednesday.

*In addition to existing daily roundtrip schedule on this route.

Copyright Photo: Brian McDonough/AirlinersGallery.com. Airbus A320-214 N844VA (msn 4851) climbs away from Washington (Reagan National).

Virgin America:

Virgin America reports a 1Q operating loss of $49 million, launches its code share partnership with Virgin Australia

Virgin America (San Francisco) has reported another quarter in the red. The airline reported its financial results for the first quarter of 2012 yesterday. With overall fuel costs higher by 47 percent year-over-year, the financial pressure of the airline’s industry-leading capacity growth and a revenue shortfall associated with the carrier’s transition to a new reservations system, Virgin America reported a first quarter operating loss of $49 million on revenues of $267 million. Top line growth continued to outpace the expanding airline’s capacity growth. Year-over-year, total revenue grew by 33 percent for the first quarter on a 29 percent increase in Available Seat Miles (ASMs), at a time when the rest of the industry reported flat capacity. The airline ended the quarter with $111 million in unrestricted cash.

Virgin America reported 2.2 percent year-over-year RASM growth, versus the double digit RASM percentage increases reported in 2010 and 2011. This was driven by significant capacity growth and systems issues associated with the Company’s transition to a new reservations platform. The growing airline’s rate of entry into new markets created margin pressure which offset revenue gains in more mature markets. While capacity was up 29 percent year-over-year, total capacity increases were up 59 percent over the past two years. This rapid growth established Virgin America’s core network and provided an important base for the carrier’s future success. This planned phase of accelerated growth will wind down in mid-2012, until the airline’s next major fleet order begins delivery later in 2013. At the same time, website issues and revenue management challenges associated with the Company’s transition to a new Sabre reservations system reduced first quarter revenue by $10 to 15 million.

Virgin America’s results were also adversely impacted by high fuel prices. Had fuel prices remained flat year-over-year, the airline’s fuel costs would have been $15 million lower for the quarter. The cost-per-gallon of fuel increased by 14 percent in the first quarter. In late 2011, Virgin America resumed a structured fuel hedging program to help manage the impact of fuel price volatility. Approximately 70 percent of the airline’s fuel consumption in the first quarter of 2012 was hedged at prices slightly below market levels, resulting in a fuel expense for the quarter that was approximately $2 million below market prices. The carrier has hedged approximately 33 percent of its expected fuel consumption for the remainder of 2012. Since April 2012, fuel prices have dropped significantly. Under Virgin America’s hedging program, the Company will not realize the full benefit of falling prices until the second half of 2012.

Virgin America continued to drive significant growth in the quarter: expanding its fleet from 38 aircraft in March 2011 to 51 aircraft by the end of the first quarter 2012 (today, the carrier operates 52 aircraft). Virgin America took delivery of five Airbus A320 aircraft in the first quarter, capping a remarkable expansion over the past two years. The airline has acquired 23 aircraft since the first quarter of 2010, an 82 percent increase. This phase of accelerated growth comes to an end in mid-2012, with deliveries under the carrier’s next major fleet order not starting until later in 2013. In 2011, the carrier announced a major fleet order – including the first commercial order for the A320neo.

Clearly Virgin America is under pressure to return to the black during the upcoming quarters.

In other news, Virgin America has launched its first codeshare – with sister-branded airline, Virgin Australia, selling tickets as of July 4 in Australia on Virgin America flights from Los Angeles to Boston, Chicago, Dallas/Fort Worth, Fort Lauderdale/Hollywood, Philadelphia, Portland (Oregon), Seattle/Tacoma and Washington (Dulles). This is the first-ever codeshare agreement for the California-based carrier, building on a 2009 interline agreement with Virgin Australia.

Virgin America: