July 28, 2014

Virgin America planning a public stock offering

The California-based airline will be shifting its operation from Dallas-Fort Worth Airport to Dallas Love Field in October, where it will launch 14 daily flights after the Wright Amendment flight restrictions expire.

Virgin America’s next destination is Wall Street.

The California-based airline, which won a battle this year to gain control of two gates at Dallas Love Field, filed documents Monday for an initial public offering of shares.

Virgin America, which operates out of Los Angeles and San Francisco, flies to 22 airports in the United States and Mexico and has a fleet of 53 planes. It is known for offering a variety of perks on its jets, including live TV, movies, leather seats and purple mood lighting.

But it’s still a small player. Virgin America carried 6.3 million passengers last year, less than 1 percent of the total passengers who flew on U.S. airlines. And its 53 jets are a tiny fraction of what larger carriers have. For instance, United Airlines has more than 1,200 aircraft.

Virgin America operates six daily flights at Dallas/Fort Worth Airport to San Francisco and Los Angeles. But it will shift that operation to Dallas Love Field in October, where it will begin flying 14 daily flights to San Francisco, Los Angeles, Washington Reagan National and New York LaGuardia airports when the Wright Amendment flight restrictions expire. It plans to expand its Love service to Chicago O’Hare Airport in 2015.

The company had been unprofitable until last year, when it had earnings of $10.1 million. In recent years, the U.S. airline industry has posted record profits, while Virgin America has struggled. Since 2009 it has lost about $407.5 million. Revenue in 2013 rose 6.9 percent to $1.42 billion from $1.33 billion in 2012, according to the filling.

The company licenses the Virgin brand name from the Virgin Group, which was started by Sir Richard Branson, a businessman. The Virgin Group’s parent company, VX Holdings, has a 22.1 percent stake in Virgin America, according to the filing.

Most of Virgin America’s executives have worked at larger airlines. CEO and President C. David Cush, who has led the company since 2007, worked at American Airlines for 20 years, and former American CEO Don Carty is its chairman. Senior Vice President E. Frances Fiorillo came from Canadian Airlines. Others had worked for Continental Airlines and Delta Air Lines.

For the purpose of the filing with the Securities and Exchange Commission, the company said it could raise as much as $115 million, but that number is likely to change.

The company, which has headquarters in Burlingame, Calif., did not say when it expects the IPO to happen, how many shares it plans to offer, how much each share will cost or which exchange they will trade on.

This report includes material from the Star-Telegram archives.

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