Virgin America, continuing to battle high fuel expenses and costs associated with its rapid expansion, said its second-quarter loss widened to US$21.7 million from US$15.5 million a year ago.

The closely held discount airline, which took wing in 2007 and has a hub at San Francisco International Airport, has won numerous awards for its low fares, stylish service and tech-laden aircraft. The company said its second-quarter revenue rose 46% to US$269 million and its unit revenue, the amount taken in for each passenger flown a mile, rose by an industry-leading 13%.

The Burlingame, Calif., company said its average fare rose 11% to US$192.79 and that all of its routes that have been operating for at least a year -- covering about 70% of overall capacity -- are profitable on an operating basis.

But its fuel expense rose by 62%, and the average price per gallon it paid was up 26%. If fuel had remained flat, operating costs would have been US$23 million lower than the US$274.5 million in racked up. Fuel costs included a US$7.2 million noncash loss on its hedging position.

David Cush, the chief executive, said in an interview Friday that while the price of crude oil has declined, the price airlines pay for aviation jet fuel has continued to rise. The spread between the cost of a barrel of crude and a barrel of jet fuel has continued to widen, he said. And that is before the seasonal increase in jet fuel prices that normally sets in in the fall and winter, when refiners concentrate of making home heating oil.

Moreover, break-neck growth "is financially stressful," Mr. Cush said. New employees must be hired and trained and aircraft modified into the Virgin America configuration, and new routes take time to ramp up in terms of traffic and fares. Excluding fuel, Virgin America's unit cost, or the cost to fly a seat a mile, rose 8%.

In the past year, the company has added flights to Chicago, Dallas-Fort Worth, Orlando, Fla., and Los Cabos and Cancun in Mexico. Other, larger airlines have matched Virgin America's low fares and in some cases added more flights a day on the overlapping routes, dwarfing the start-up's offerings. Puerto Vallarta flights will launch in early December. Mr. Cush said another new destination will be announced next week and later in the year Virgin America will announce the start of a "major" transcontinental route.

The CEO said the company expanded its third-quarter capacity by more than 38% compared with a year ago, and expects that its unit revenue for the quarter will show a percentage rise in the low to middle teenss. The company had "a very strong summer" and bookings into October are meeting or exceeding expectations, he said. The company achieved its first-ever profit in the third quarter of 2010.

At the end of June, Virgin American had 38 Airbus A-320s in its fleet, up from 28 a year earlier. Mr. Cush said the company will end this year with 46 A320s.

The next 13 aircraft to be delivered over the next 12 months are fully financed by leasing companies, and thus won't add to the company's debt.

While he has talked in the past about dialing back the company's growth plans if fuel prices remain high, Mr. Cush said Friday that Virgin America's fleet plans are "very firm." The company will end 2012 with 52 planes and begin taking a raft of additional Airbuses on order toward the end of 2013.

Sir Richard Branson's Virgin Group of the UK had a 25% voting stake in Virgin America and a 49% economic interest, the maximum allowed by U.S. law. U.S. investors own the balance of the airline, which must report its financial results to the U.S. Department of Transportation.