Markets

Virgin America Shows Worse Q4 Numbers Excluding Lower Fuel Prices

By Brett Snyder

Updated on: May 12, 2009 / 1:09 PM EDT / MoneyWatch

DOT data for the fourth quarter of 2008 was released this week, and as usual, I dove right in to see how Virgin America did. The answer? They did not do very well. Lower fuel prices helped mask the loss, but without that benefit, it was a worse quarter than Q3.

The airline's net loss shrunk from $59.1 million to $36.9 million. Net margin shrunk from -52% to -34%, but this improvement was based on lower fuel prices.
Total fuel cost for scheduled service dropped from $61.1 million in Q3 to $30.9 million in Q4. Average cost per gallon dropped from $3.52 to $1.95. Had they paid Q3 fuel prices in Q4, total fuel cost would have risen by $24.8 million.
Adding that $24.8 million additional fuel cost would have likely resulted in a slightly higher loss in Q4 than Q3.
After rapid revenue growth during all previous quarters, Q4 actually was the first to see a revenue decrease. Revenue dropped from $114.1 million to $109.7 million.
Cash did spike in Q4 as expected due to an infusion. At the end of Q3, cash was at $25.4 million and at the end of Q4, it was at $67.5 million.
This cash increase came via Long Term Debt (LTD). LTD has tripled since the end of Q1 and doubled since the end of Q2. Just in Q4, LTD ballooned from $232.2 million to $359.5 million.

As you can see, these results were not good, and it doesn't bode well for the future. CEO David Cush kept focusing on the quarter-over-quarter improvement during past discussions, but this one clearly didn't show that same growth.

Tomorrow, I'll look into 2009 to get some early reads on their performance this year.

MoneyWatch Poll: How Has the Financial Crisis Affected You?