Note to Virgin America: Go Ahead, Take the IPO Plunge

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San Francisco ( TheStreet) -- The news keeps getting better for Virgin America , which said Wednesday that the fourth quarter was its third straight profitable quarter and led to its first profitable year ever.

The privately held San Francisco-based carrier, focused on trans-continental flying, said fourth-quarter net income was $14.2 million, compared with a year-ago loss of $25 million.

Revenue per available seat mile rose 4.1% to 11.79 cents, while cost per available seat mile excluding fuel was flat at 6.94 cents. Total CASM was 11.03 cents, down 1.3%. Operating margin was 6.6%, up 5.1 points from the same period a year earlier and slightly above the industry average of around 6%. Revenue rose 2.7% to $360 million.

For the full year, net income was $10.1 million, compared with a loss of $145 million in 2012. Revenue rose 7% to $1.43 billion. RASM rose 9.3%, the biggest full-year gain for any major carrier. CASM excluding fuel rose 3.3% to 6.83 cents, driven by network changes that diminished aircraft utilization. Total CASM increased 0.5% to 10.96 cents.

For the full year, network changes led to a 2.2% in capacity. Debt fell to $70 million from $114 million.

"2013 was a year of tremendous progress for Virgin America," said CEO David Cush, in a prepared statement. "We continued to reach more customers in more markets and now have a network presence from San Francisco and Los Angeles to most of the primary business centers in the U.S. "

Virgin America is emerging as one of the winners in the merger between American  and US Airways . This year it hopes to ramp up service at three new airports, all made available by merger-required divestitures. Virgin will have four daily departures at Washington Reagan National and six at New York LaGuardia.

The third merger win would be the two gates that American is required to divest at Dallas Love Field. Virgin American, as a new entrant carrier, would seem to be a strong candidate for the gates, but both  Delta and Southwest are also seeking to acquire them and cannot be discounted because when strong airlines want to make a case for something, they are very good at it. 
The decision will be made by Dallas officials, the Justice Department and American.

Virgin's expansion plans mark the first time the carrier would offer flights not involving LAX and its hub at San Francisco International, with the exception of a JFK-Las Vegas flight. It seems unlikely, however, that the new markets will be any more competitive than trans-con flying, where Virgin is focused. The JFK-LAX market has six competitors and 40 daily flights.