AIRLINEFINANCEINSIGHTS

Virgin America – IPO First Month Recap

Virgin America

Virgin America

Experience The Skies covered Virgin America (IATA Airline Code – VX)’s Initial Public Offering (IPO) back in November (Refer to link). It has been a month since the IPO.  How has the stock fare?

Details

The stock had an initial IPO price of 23 $US, opened on November 14, 2014 at 27 $US and ended the day at 30.35 $US.

After experiencing a low of 26.50 $US during the first day, Virgin America’s stock never closed below its first day’s price.

The stock reached its high mark on December 1 at 39.54 $US. It closed at 31.94 $US on December 15, 2014 for a net gain of 4.94 $US (+18.29%)

Virgin America One Month Performance
Virgin America One Month Performance – Information taken from Google Finance on December 15, 2014 (All Rights Reserved)

Analysis

For the same period, VX performed better than indexes Dow Jones Industrial Average and Nasdaq but was out-performed by American Airlines (+42.49%), Hawaiian Airlines (+30.26%), JetBlue Airways (+18.48%) and United Airlines (+14.21%).

Virgin America One Month Stock Performance Part 2
Information taken from Google Finance on December 15, 2014 (All Rights Reserved)

For both October and November 2014, VX reported operational results in line with the company’s goal to monitor and adjust capacity accordingly. This produced load factor (available seat miles / revenue passengers miles) that is above 2013 averages.

As of November 2014, the year to date load factor of 82.3% is 2.3% higher than the same time in 2013.  This should have a net positive effect to its Q4 and fiscal year 2014 financial performance to be reported early January 2015.

Virgin America will continue to face heavy competition from United Airlines in San Francisco (IATA Airport Code – SFO) while building on new focus cities at New York LaGuardia Airport (LGA), Washington National Airport (DCA) and Dallas Love Field Airport (DAL).

In a future post, Experience The Skies will examine how Virgin America’s current product mix compare with other US airlines.

Stay tuned.

 

 

 

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