Virgin America became a publicly traded company on Friday in the second-largest IPO from California this year, making a strong debut on Wall Street and positioning the scrappy airline to compete for more passengers in big cities.
Virgin America, based in the Bay Area, began trading at $27 on the Nasdaq, 17 percent above the $23-per-share price it had set Thursday afternoon, and valuing the company at about $1.2 billion. Shares closed Friday at $30.
The company, which is partly owned by English investor Sir Richard Branson, who operates the London-based Virgin Group that also includes space-shuttle program Virgin Galactic, raised $306.8 million in the initial public offering, selling 13.3 million shares. In California, the deal is one of the best of the year, following only GoPro’s $427 million IPO in June.
The country’s ninth-largest airline, Virgin America competes with the likes of Southwest Airlines and Alaska Airlines for customers looking for an alternative to the behemoth airlines and a flying experience that offers better customer service but at reasonable ticket prices. Since offering its first flights in 2007, Virgin America has built itself into a high-tech airline favorite with rare perks. The cash raised in the IPO will help Virgin expand its presence at some of the nation’s largest airports, including Dallas Love Field and Reagan International Airport in Washington, D.C., and grow its 52-plane fleet. The company also said it plans to bring service to Hawaii and add more flights to its home bases of San Francisco and Los Angeles. In all, it serves 22 airports in the U.S. and Mexico.