Virgin America earns quarterly profits, promises more

Virgin America, discount carrier operating flights within the United States and Mexico surprised everyone with its quarterly report. The carrier, which has been piling up losses since its launch in 2007, posted quarterly profit first time in the last three years.

The news is pleasant to the customers, management and staff of the California based airline that have waited for a long time. The carrier, which slowed down its expansion spree and restructured its balance sheet earned $8.8 million for the second quarter of this year. It reversed the losses of $31.8 million for the same period in 2012.

It’s revenue for this period increased by 8 percent to $376 million. The operating margin showed an improvement of 8.6 percentage points to be at 7.4 percent. This is a historic moment for the airline as the highly volatile market and stiff competition is forcing many airlines to shut shop. Virgin America has been battling crisis, market conditions and critics together and putting efforts to be in a stable position that it enjoys today.

The airline is hopeful of continuing and maintaining its profitable position in the times to come. It last showed profits way back in 2010. It hopes that passengers will continue to travel on Virgin Airlines tickets to their favorite destinations throughout the United States.

The airline, which is partly owned by businessman Richard Branson’s Virgin Group Ltd., was able to achieve this milestone with the help of low fuel costs and unit-revenue growth. The airline, which nearly doubled its fleet between 2010 and 2012, canceled the order for 20 aircrafts and postponed deliveries of many others. These measures have reaped benefits for the carrier, which has seen a substantial growth in the second quarter of this year. It will not add any more planes to its fleet until 2015.

The airline witnessed an increase in traffic of 5.6 percent and its unit revenue also increased by 6.2 percent. Unit revenue is the amount taken in for each customers flown a mile.