Virgin America could go public in second half of 2014
(Reuters) - Virgin America, the U.S. carrier in which Richard Branson's Virgin Group has a minority stake, could go public in the third or fourth quarter, its president and chief executive said on Wednesday.
"We think the company will be ready from an administrative and financial standpoint later this year," David Cush said in a telephone interview. "Our thought right now is that late third quarter or sometime in the fourth quarter is probably the earliest we would be looking at going," he said, noting that market factors would affect the timing.
Published reports last month said the California-based carrier, which was launched in 2007, had appointed investment banks to lead a potential initial public offering, giving Branson's Virgin Group an opportunity to sell part of its stake.
Virgin America has improved its financial performance in recent quarters and is looking to expand its footprint in markets with high demand.
The carrier recently won some takeoff and landing rights at New York's LaGuardia Airport and Ronald Reagan Washington National Airport that American Airlines (AAL.O) gave up in return for U.S. approval of its merger with US Airways Group. The rights will allow Virgin America to operate new roundtrip flights at those airports.
On Wednesday, Virgin America said it wants to acquire two gates at Dallas Love Field airport that American Airlines Group has agreed to sell to settle the U.S. Justice Department lawsuit seeking to block its merger. American was also required to give up gates at airports in Chicago, Miami, Boston and Los Angeles under that agreement.
"Love Field is an airport that is closer to the central business district in Dallas and some of the higher-income areas of Dallas where a lot of the businesspeople live," Cush said. He said Love Field was a more convenient location for Virgin America than the larger Dallas/Fort Worth International Airport where American Airlines operates a major hub.
Virgin America plans to move operations from DFW airport to Dallas Love Field if it acquires the two gates. Cush said Virgin America hoped to learn the outcome of the bidding in the coming weeks.
Cush said his carrier would bring competition to Love Field, where Southwest Airlines (LUV.N) controls 16 of 20 gates. He also said Virgin America had an interest in gates at Chicago's O'Hare airport that American will divest.
He said Virgin America, whose planes have a first-class cabin, live TV, food and wireless Internet, offers "a different type of service" than Southwest.