Hometown Airline

The Wall Street Journal is reporting on some capital structure and route changes at our hometown airline, Virgin America.

The closely held carrier, which is based in Burlingame, Calif., said late last year that it was ending its breakneck expansion, hoping to shore up its finances by letting its new routes mature. It also has canceled orders for 20 of 30 Airbus jets and deferred delivery dates on another 30 planes.

Mr. Cush said in an interview Friday that Virgin America's investors recently agreed to convert $290 million of the carrier's $800 million of debt into equity that they would own once the company went public and the stock hit certain targets.

In the first quarter, when air-travel demand is seasonally low, Virgin America's loss narrowed to $46 million from $76 million a year earlier and its revenue rose 13% to $301 million. Unit revenue, the amount taken in for each passenger flown a mile, rose by 16.5% from a year earlier, outpacing its larger rivals.

As a regular Virgin customer (America and Atlantic) I can say it's a pretty well run airline and I appreciate their approach of having a bit of personality and trying to inject some fun into what has become a dreary air travel business.

Comments

[Joe]

From the news reports, Alaska Air has outbid Jet Blue for Virgin America by offering $2.6 billion to create the No. 5 airline by traffic (in the US). Today's WSJ notes:

Some customers certainly hope Virgin’s unique vibe carries over.

Maggie Lang, a marketing executive in San Francisco, said she flies Virgin every six to eight weeks.

“It’s really a boutique airline experience,” she said. “The flight attendants are extremely amiable. You get the sense that they really love working for Virgin. The gates don’t look like anyone else’s gates. The furniture is different.”

Ms. Lang said she has never flown on Alaska Airlines, which carried nearly 32 million passengers last year, but hopes Alaska “stays laser-focused on crew motivation” if the deal goes ahead.
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As a regular Virgin customer, I will echo Ms. Lang's hopes. I read elsewhere that the planes will be rebranded to Alaska Air and I'm guessing the B'game headquarters will be moved to Seattle. Virgin was not among the top 25 Sales Tax producers in B'game found here:

http://www.burlingame.org/modules/showdocument.aspx?documentid=12834

But they will be missed. Thanks for making flying just a bit less painful for the last nine years.