Virgin America and a vehicle owned by its employees are offering 13.3 million shares for $21 to $24 apiece, according to a regulatory filing with the U.S. Securities and Exchange Commission.
The company and Cyrus Capital Partners, a New York-based investment adviser, have also agreed to sell about $52 million of shares to PAR Investment Partners in a private placement that will take place alongside the IPO, the filing shows.
Burlingame, Calif.-based Virgin America plans to use the proceeds for capital expenditures, marketing, flight equipment and aircraft-operating leases, the filing shows.
Virgin America's IPO comes as the airline industry finds itself in a sweet spot for the first time in years as jet kerosene heads for its first annual decline since 2008, and average ticket prices continue to climb. The Bloomberg U.S. Airlines Index reached a 13-year high last week, with investors optimistic that carriers will be able to boost profits.
As crude oil slumped this year, jet fuel prices have followed. At the same time, one-way domestic coach flights averaged $466 this year through September, a gain of 1.7% from last year, according to data compiled by Bloomberg Intelligence.
Virgin America posted net income of $56.2 million during the nine months through June, compared with a loss of $4 million in the same period last year, the filing shows.
The airline recently became the last major U.S. carrier to unionize, which could potentially raise costs at the company known for having expenses below those of rivals.
Virgin America started service in August 2007 and has a fleet of Airbus SAS A320 single-aisle jets and flies to destinations including San Francisco, Los Angeles, Las Vegas, New York's John F. Kennedy airport and Boston.
Branson's Virgin Group owns a 22% stake in Virgin America through VX Holdings.
The shares will be listed on Nasdaq under the symbol VA.
(Bloomberg News)
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