Virgin America is moving forward with an initial public offering of shares despite poor financial performance when the airline industry overall is doing well.
Ultimately, Virgin America hasn’t succeeded because it doesn’t work to be a high cost, low fare carrier. And because they have neither the frequencies nor the reach to appeal to high fare business travelers.
Initial investors have waited far longer than expected to get some of their cash out, and the financial markets have recovered enough that there may just be an appetite for a Virgin America IPO to allow them to do so.
In the meantime Virgin America is pressing as hard as they can at the retail level — perhaps underscoring that the IPO isn’t exactly oversubscribed at the institutional level?
- Employees are being offered the opportunity to buy at the IPO price
- And so are Gold and Silver elite frequent flyers
The Virgin America IPO will be offering these shares via Loyal3, a company frequent flyers will know as the brokerage that made it possible to buy stocks online with a credit card. Unfortunately, after many folks earned a ton of points buying a selling stock, they reduced the maximum purhcase amount. It’s a lot harder to earn miles buying and selling stocks off a credit card with $50 transactions than with $2500 transactions!
No doubt there are some folks who status matched over to Virgin America who will wish they had re-qualified. This is the first time I’m aware of IPO pricing access to elite frequent flyers. Although the reverse certainly existed as British Airways used to give airfare discounts to shareholders.