Virgin America posts Q3 loss

US-based Virgin America has announced net losses of $3.3 million (£2.1 million) in the third quarter.

Travel Insurance News - 22/12/2011

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The news comes in sharp contrast to profits of $7.5 million (£4.7 million) the company posted in the same quarter one year ago. The airline blames the loss largely on high fuel costs, which totalled to $110 million (£70 million) during the third quarter, marking a 68 per cent increase from the year prior.

President and chief executive of Virgin America, David Cush, said that despite the hard-hitting cost of oil over the quarter that the airline saw strong revenue and growth, particularly as a young airline.

The carrier also said that it had raised some $150 million in capital via a new debt offering, improving its current cash position. Cush said that the move showed management’s confidence in the carrier’s business model and outlook. He added that the funding would help to support Virgin’s long-term growth plans.

The news comes just after Virgin America began operating its most recent route map extensions to Puerto Vallarta and seasonal flights to Palm Springs.

Among other statistics, Virgin America's revenues jumped more than 45 per cent to $291 million (£186 million) over the quarter, whilst its load factor dropped by 1 percentage point to 84.2 per cent.

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