A Weakened Virgin America’s Profits Decline as Alaska Prepares to Close Merger
Photo Credit: Virgin America, which is being acquired by Alaska Airlines, is having revenue trouble. Pictured are Alaska and Virgin America aircraft. Alaska Airlines
Skift Take
Yes, Alaska paid a fortune for Virgin America. But that doesn't mean it is a bad deal. Alaska believes it needs Virgin America's assets to compete and grow.
Virgin America is going out with a whimper.
The nine-year-old carrier quietly reported second quarter earnings on August 5, and while it is still making money, there are several signs business is not as strong as it once was.
Net income fell to $38.1 million, down from almost $65 million during the same period last year. Passenger revenue per available seat mile, a closely watched industry metric measuring how much an airline makes for each mile it flies, fell 9 percent, year-over-year. Operating margin decreased 0.7 points to 16.2 percent.
Virgin America's earnings announcement, made in a U.S. Securities and Exchange Commission filing, rather than a press release, came as Alaska Airlines seeks final approval for its acquisition of the small,
