Things in the Sky

Virgin Ameirca, like everyone else, has to file financial results with the DOT, and lately they’ve been giving a preview before the DOT releases them (which will be later in September). It looks like the airline is now making solid progress.

Operating income improved 81.6% year-over-year to a loss of $11.4 million, and net income improved similarly by 75.5%. The statistic that stood out for me was operating margin (operating income divided by revenue), which was up 58.7 points to -8.4%. RASM was essentially flat – down 0.6% – which is pretty good considering the environment we’re in.

On the cost side, CASM was down 35.6% year-over-year, but fuel was very high at this time last year, and Virgin was dealing with startup costs. CASM ex-fuel was down 20.9%.

One concern that remains is the airline’s cash position, which is $10 million lower than the end of the first quarter, at $28 million.

Another interesting statistic: “Take rates for the Gogo In-Flight Internet Service continue to climb with some flights and routes reporting up to 20-25% of guests using the service.” That’s a good number of passengers – how much money Virgin is getting is another question. When I asked Gogo about how much revenue airlines receive at NBTA, they wouldn’t tell me.

But, this is good progress for the airline, methinks. I’ll probably take a closer look once the DOT releases all the numbers in a few weeks.