Virgin America IPO raises $300 million, stock soars

Virgin America, which start trading Friday on Nasdaq, gained more than 25% from its IPO price of $23, raising over $300 million. The US airline, which is a brainchild of British entrepreneur Sir Richard Branson, is now worth around $1 billion.

Virgin America went public at a time when airlines are really soaring. This year alone Delta has gained 60% and JetBlue has gone up by nearly 50% and with fuel prices expected to sink even lower the airlines market is looking increasingly prosperous.

However, compared to its rivals Virgin America is much smaller, and its track record raises some eyebrows. From 2009 through 2012 the company lost $395 million. Last year the company reported profit of only $10 million.

This is why the company has been focusing attention on its performance this year alone. According to a regulatory filing, in the first nine months of 2014 Virgin America has made around $56 million. This turnaround is what is attracting investors.

It is a hip airline too, which makes it stand out from the market. For example, some of its planes have names including “Virgin & Tonic” with purple mood lighting in the cabins and seats wrapped in leather. It is trying to make the flying experience for consumers more enjoyable, which is quite welcome given that the traditional experience of flying.

The airline, headquartered in Burlingame, California in the San Francisco Bay Area, has its main hubs in Los Angeles and San Francisco. It will be expanding operations at New York’s La Guardia Airport, Washington’s Reagan National and Dallas’ Love Field.

Virgin America has also started flights to Mexican vacation areas, including Cancun, Puerto Vallarta, and Cabo San Lucas.

Its IPO occurred only a couple of days following the debut of Branson’s financial services company Virgin Money and weeks after a spaceship from Virgin Galactic exploded in the California desert.

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