BURLINGAME, Calif., May 13 (UPI) -- U.S. discount airline Virgin America is positioned to make a profit as a prelude to its initial public offering, the firm's chief executive officer said.
Virgin America has accumulated $645 million in net losses since its start in the summer of 2007, including $46 million in the first quarter of 2013, The Wall Street Journal reported Monday.
But the airline, which is related to Richard Branson's Virgin Group Ltd., is putting the brakes on growth, scaling back on orders for new planes and restructuring its finances, all of which are aimed at changing the ink on its balance sheet from red to black in advance of the closely held company's IPO, the Journal reported.
The airline's passenger capacity grew 16 percent in the fourth quarter of 2012 compared to a year earlier. In the first quarter, that figure flip-flopped to a 4.2 percent contraction.
The airline has postponed one 30-plane order and scaled back another from 30 to 10. On Friday, CEO David Cush said the company had reached a deal with investors to turn $290 million of debt into equity after the IPO, although the deal is contingent on the company hitting certain financial targets.
Investors also agreed to lower the interest rate on a sizable portion of the firm's remaining debt, Cush said.
The company's public debut is expected by the end of the year, the Journal said.