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New York - Shares of Virgin America, a low-cost airline partly owned by Richard Branson, soared as much as 28 percent in their market debut, underscoring the buoyant mood in an industry that is emerging from a long spell of turbulence.
US airline stocks hit a 13-year high this week as they gained momentum from lower oil prices and increased travel spending by Americans in an improving economy.
The company's IPO is the first for a US airline since May 2011, when Spirit Airlines Inc went public.
Virgin America's shares rose to a high of $29.48 on Friday, valuing the company at about $1.3bn.
Virgin America is the US offshoot of Branson's London-based Virgin Group, which is involved in sectors including airlines, railroads, telecommunications, media and hospitality.
The offering of 13.3 million shares raised about $307m, with the company retaining most of the proceeds.
The shares were priced at $23 each, within the expected range of $21-$24.
Branson, through VX Holdings LP, owns a 24.8% stake in the company. Hedge fund Cyrus Capital Partners LP is the biggest shareholder with a 32.8% stake.
The airline, popular among travelers as it offers Wi-Fi, comfortable leather seats and mood lighting, has been named the best US domestic airline by Condé Nast Traveler Magazine for the past seven years.
"We're the only airline that started since JetBlue that is still in business," chief executive David Cush said in an investor roadshow ahead of the IPO.
Virgin America took to the skies in 2007 just before the financial crisis, and seven years after JetBlue Airways Corp's first flight.
The company earned $10.2m on revenue of $1.42bn in 2013, its first ever profitable year.
The airline leases all 53 of its Airbus single-aisle planes, which mostly fly long-haul within the United States and Mexico, with Los Angeles and San Francisco serving as main hubs.
Barclays and Deutsche Bank Securities were the lead underwriters of the offering. The company said it would use the proceeds to repay debt.
