Virgin America, the closely watched domestic carrier that is nearly a quarter owned by Richard Branson’s Virgin Atlantic Airways, reported total operating revenue for the second quarter grew by 29 percent to $347 million on a capacity increase of 32 percent. The airline also narrowed its operating loss to $4 million for the second quarter, and improved earnings before interest, depreciation and amortization, and aircraft rental expense (EBITDAR) by 44 percent, to a record high of $54 million.

EBITDAR margin for the second quarter rose to 16 percent, a 1.7-point year-over-year improvement.  Year-to-date Virgin America reported total revenue of $614 million, a 31 percent increase year-over-year. Operating loss for the six months ended June 30, 2012, was $53 million. Year-to-date the airline has achieved EBITDAR of $61 million, an improvement of 23 percent over the first six months of 2011.

In the second year of its capacity growth cycle, Virgin America's unit revenue (RASM) declined a modest 2 percent as compared to the second quarter of 2011.  Over the past two years, the airline has increased available seat miles (ASM) by 72 percent with an 11 percent increase in RASM. The airline took delivery of one aircraft during the second quarter, ending the quarter with a total fleet of 52 Airbus A320 Family aircraft. Virgin America has taken delivery of 24 aircraft total since the first quarter of 2010. This rapid growth established Virgin America's core network and provided an important base for the carrier's future success. This phase of accelerated growth is now largely complete, as Virgin America will take delivery of just one additional aircraft through the second quarter of 2013.

Cost per available seat mile (CASM) excluding fuel decreased by 1.5 percent, despite the cost pressures of growth, reflecting the benefits of economies of scale that Virgin America will see as growth slows.  Fuel costs during the quarter averaged $3.40 per gallon, a decrease of 3.4 percent year-over-year, although the quarter was still one of the highest cost periods in the airline’s history. Virgin America maintains a hedging program to manage the volatility of fuel prices and provide some protection from short-term price increases. As of June 30, the airline has hedged 58 percent of its expected fuel consumption for the rest of 2012, and 30 percent for the first half of 2013.

"With improved margins in the second quarter, our investment in building our network over the past two years is beginning to pay off," said Virgin America President and CEO David Cush. "Despite the economic climate and the historic rise in fuel costs faced since our launch, as a new carrier we needed to grow.  After two years of record expansion, we're pleased to have built a strong foundation and to have delivered on our promise of offering the best product in the domestic skies.  With just one aircraft delivery in the next 12 months, we will focus on maximizing the value of our network instead of managing additional growth. “

In the 12 months ending in June 2012, Virgin America launched new service to Puerto Vallarta, Palm Springs, Philadelphia, and Portland. Since its 2007 launch, the airline has created 2,600 new jobs, expanded to 19 airport destinations, signed up 2.5 million Elevate members and swept the reader-based travel awards, including "Best Domestic Airline" in Conde Nast Traveler's Readers' Choice Awards and Travel + Leisure's World's Best Awards.