Virgin America's finances are ugly. Very ugly. So ugly, in fact, that its credit card processors have imposed "significant" holdbacks of cash:
Our credit card processors have the right to impose larger holdbacks which could have a material adverse effect on our business.
Most of our tickets are sold to customers using credit cards as the form of payment. Our credit card processors have rights in their agreements to hold back receivable monies related to tickets sold for future travel services (i.e., a “holdback”). Any related holdback is remitted to us shortly after the customer travels. Holdbacks are commonly imposed on newer or less creditworthy airlines, and we currently have significant holdback requirements with our two primary credit card processors, Elavon Inc. for Visa/MasterCard and American Express. If a credit card processor determines there is a material risk with respect to our business or liquidity, it has the right to increase the amount or duration of the holdback. Any increase in the amount or duration of our holdbacks may negatively impact our liquidity and materially adversely affect our business.
Source: bottom of page 26 of S-1 (linked above).
Contrast that with AA, which did not have any credit card holdbacks imposed by its credit card processors, despite a decade of significant losses. US Airways was subject to a credit card holdback following its massive losses in 2008-09.
Credit card holdbacks are a warning sign; they're evidence that the credit card processors are worried about non-performance and possible Ch 11 reorganizations.
Yes, the IPO market is on fire right now, but IMO, VX should put another couple of profitable years behind it and firm up its relationships with key players (like its credit card processors) before it goes public.
Oh well - caveat emptor.