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Virgin America Selects Banks for 2014 IPO Try

Feb 11, 2014 8:00 am

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Virgin America is just now tasting profitability, and would use the IPO proceeds to buy more aircraft and expand its footprint.

— Dennis Schaal

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John Decker  / Reuters

The first Virgin America flights land in San Francisco, California, August 8, 2007. John Decker / Reuters

Virgin America, the U.S. carrier in which Richard Branson’s Virgin Group has a minority stake, has appointed Barclays and Deutsche Bank to lead an initial public offering, the Financial Times reported on Monday, citing people familiar with the situation.

The carrier interviewed half a dozen banks last month as it prepares for an IPO that could come as soon as the second half of this year, the FT report said.

The California-based airline, which was launched by Branson in 2007, would use capital from the potential listing to expand its fleet from 53 aircraft to near 100 over the next decade, according to the people quoted in report.

Virgin America has been growing its network of routes and in December bought 12 takeoff and landing slots at New York’s LaGuardia Airport that American Airlines gave up in return for approval of its merger with US Airways Group.

The company, which appointed Intel Corp Chief Financial Officer Stacy Smith to its board last month, posted a net income of $33.5 million for the quarter ended Sept. 30, compared with a loss of $12.6 million a year earlier.

A listing could provide Branson’s Virgin Group and fellow shareholder, hedge fund Cyrus Capital, a chance to sell part of their stakes including a debt position that would be convertible to equity after an IPO, the FT said.

A Virgin America spokesperson said the company was not commenting on the report at this time.

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