Rupert Neate in New York, The Guardian, March 23, 2016
Virgin America shares soared on Wall Street on Wednesday following reports that the airline founded by British entrepreneur Sir Richard Branson is considering selling itself to a third party.
Shares in Virgin America, which was launched by Branson in 2007 and now flies to 21 destinations within the US and Mexico, rose as much as 13% following a Bloomberg report that the company is reaching out to potential buyers. The shares were up $4.10 to $34.78 at 11.15am, valuing the company at $1.5bn (£1.05bn).
A Virgin America spokeswoman said: “As a public company, we have a policy of not commenting on any market or media speculation concerning mergers or acquisitions involving Virgin America.”
News of the potential sale comes just a year and a half after the company, which according to Bloomberg is 30.85% owed by Branson’s VX Holdings, floated on the Nasdaq in New York. At the time of the initial public offering (IPO) in November 2014, Virgin America was valued at just over $1bn.
The budget airline has attempted to differentiate itself from established competitors in the US by giving itself a cheeky and playful image with purple mood lighting and planes named Virgin & Tonic and Jefferson Airplane.
Virgin America made a pre-tax profit of $61m on sales of $1.4bn in 2014, according to its annual statement released last month. At the time, Dan Cush, the airline’s president and chief executive, said: “2014 was a remarkable year for Virgin America on every front. We achieved record profitability and significantly strengthened our balance sheet by going public in the second largest airline IPO in history.
“Both our existing and new investors have shown confidence in our low-cost, high-amenity business model – and we’ve continued to sweep the major travel awards for both operational excellence and our innovative service.”
This article was written by Rupert Neate in New York from The Guardian and was legally licensed through the NewsCred publisher network.