Virgin America has reported third quarter 2015 net income of $73.0 million excluding special items - an increase of $31.3 million from the third quarter of 2014. Operating income and operating margin excluding special items were $75.0 million and 18.2 percent, respectively. On a GAAP basis, net income was $71.9 million. Operating income and operating margin on a GAAP basis were $73.9 million and 18.0 percent, respectively. Fully diluted earnings per share excluding special items was $1.64. On a GAAP basis, fully diluted earnings per share was $1.61.
"Virgin America continued its strong financial performance in the third quarter with record earnings and margins," said David Cush, Virgin America's President and Chief Executive Officer. "We believe we are well-positioned to grow the airline while maintaining our low cost model, driving year-over-year industry unit revenue outperformance and improving ancillary revenue. We're also investing in our product so that we can continue improving what is already the best, most consistent guest experience in the industry."
Total operating revenue was $410.9 million, an increase of 1.3 percent over third quarter of 2014. Passenger revenue per available seat mile (PRASM) decreased 2.7 percent compared to the third quarter 2014, to 11.05 cents. Year-over-year PRASM decline was driven by a 1.0 point decrease in load factor and a 1.8 percent decrease in yield. Total RASM decreased 1.6 percent year-over-year. Total CASM excluding special items decreased 7.7 percent compared to the third quarter of 2014, to 10.13 cents. Decreases in fuel costs contributed to the decline in CASM, partially offset by increases in salaries, wages and benefits, landing fees and other rent and aircraft maintenance. Salaries, wages and benefits costs included a $7.1 million accrual for teammate profit sharing and related payroll taxes. CASM excluding special items, fuel costs and profit sharing for the quarter increased 11.0 percent year-over-year, to 7.34 cents.
Virgin America realized an average economic fuel cost per gallon including taxes and the impact of hedges of $1.92, which was 38.7 percent lower year-over-year. This amount includes certain fuel expense adjustments.
Special items in the third quarter of 2015 relate to $1.1 million net mark-to-market adjustments for fuel hedges that did not qualify for hedge accounting treatment and which mature subsequent to September 30, 2015, offset by the effect of fuel hedges that settled during the quarter for which prior unrealized mark-to-market adjustments are now realized.
Third quarter 2015 operating income excluding special items was $75.0 million, an increase of $22.6 million as compared to the third quarter of 2014. The Company’s operating margin excluding special items of 18.2 percent improved by 5.3 points year-over-year.
Net income excluding special items for the third quarter increased by $31.3 million year-over-year to $73.0 million.
Fully diluted earnings per share excluding special items was $1.64 for the third quarter of 2015. Third quarter 2015 fully diluted earnings per share was $1.61 on a GAAP basis.
Virgin America reports cost per available seat miles fell 7.7% to $0.1013 in Q3 as lower fuel costs played in. Revenue passenger miles rose 1.9% to 2.736bn, while capacity increased 3.0% to 3.315bn available seat miles. Load factor dipped one percentage point to 82.5%. The average fare collected by Virgin America fell 9% to $197.98.