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Virgin America

Today's Travel Industry Non-Story: Start-Up Airlines' Profit Margins

December 18, 2007 at 1:19 PM | 0 Comments

The talk of the day for airline wonks is Virgin America and how the airline's first quarter of operation has it $35 million in the red. True, losing that much loot isn't exactly awesome, but it doesn't sting nearly as bad if you were expecting to see that money go out the door. Says VA spokeswoman Abby Lunardini:

We don't expect to turn a profit for several quarters, and our shareholders are fully aware of, and comfortable with, this projection. [This w]ould have been a story if we HAD [turned a profit], given the incredibly high launch overhead you have in the industry, coupled with the fact that the quarter reflects 92 days of expense and 53 days of revenue!

That said, our sales are beating all expectations, so we're more than pleased and we're right where we should be in terms of meeting our business model.

Also doing just fine, thankyouverymuch, is Skybus, which posted a $16 million loss for Q3. That was just about what the company expected, officials say, and with more flights coming on-line--and costly transcontinental flights cut--the airline should rake in more cash next quarter.

For comparison's sake, JetBlue, which started up in the booming pre-9/11 airline market, launched its first revenue flight on February 11, 2000 and made a profit by the end of August, six months later.

Related Stories:
· VA $35 Million in the Red [SFChron]
· Skybus in the Red by $16 Million [Columbus Dispatch]
· Virgin America coverage [Jaunted]
· Skybus coverage [Jaunted]

[Photo: current events]