Airline Stocks: Virgin America Plans IPO For 2013

By Kapitall | May 07, 2012 AAA

Written by Kelly Haugen



As market conditions continue to improve, airline company Virgin American is seeking to launch an IPO for 2013. The exact timing of the IPO still remains to be a looming question. Bloomberg reported CEO David Cush stating, "we're not tied to any date, and we've got investor patience and sufficient liquidity."

The timing will be highly dependent on investors' interests in Virgin's continual profit generation as well as a case on their long-term business model. As its jet-fuel bill surged 77% to $111 million, the carrier experienced a net loss of $30.8 million for the fourth quarter. Nonetheless, the company continued to add several planes and routes as revenues rose 45% to $276.8 million.

Altogether, the airline industry is still struggling to recover from the 2008 recession. According to Airlines.org, seven airlines in the U.S. filed for chapter 11 bankruptcies in 2008 alone. Three more airlines have filed chapter 11 since, one of which being American Airlines parent company AMR, which filed in 2011.

Interactive Chart: Press Play to compare changes in market cap over the last two years for the stocks mentioned below.



Business Section: Investing Ideas
Although there has been minimal growth observed for airline companies, Virgin America remains optimistic for their public offering. How do you think Virgin will fare? (Click here to access free, interactive tools to analyze these ideas.)

1. China Eastern Airlines Corp. Ltd. (NYSE:CEA): Operates in civil aviation industry. Market cap at $3.82B, most recent closing price at $17.40.

2. Delta Air Lines Inc. (NYSE:DAL): Provides scheduled air transportation for passengers and cargo in the United States and internationally. Market cap at $9.22B, most recent closing price at $10.99.

3. US Airways Group, Inc. (NYSE:LCC): Provides air transportation for passengers and cargo. Market cap at $1.74B, most recent closing price at $10.70.

4. Spirit Airlines, Inc. (Nasdaq:SAVE): Provides passenger airline service primarily to leisure travelers and travelers visiting friends and relatives. Market cap at $1.66B, most recent closing price at $22.70.

5. TAM S.A. (NYSE:TAM): Provides passenger and cargo air transportation services in Brazil and internationally. Market cap at $3.79B, most recent closing price at $24.32.

6. United Continental Holdings, Inc. (NYSE:UAL): Engages in the provision of passenger and cargo air transportation services. Market cap at $7.86B, most recent closing price at $22.12.

7. China Southern Airlines Co. Ltd. (NYSE:ZNH): Provides commercial airline services in the People's Republic of China, Hong Kong, Macau, Taiwan, and internationally. Market cap at $4.46B, most recent closing price at $22.88.

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Disclosure: Kapitall's Kelly Haugen does not own any of the shares mentioned above.

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