Net income of $37 million. Earnings per American Depositary Shares (ADS) of $32 cents.Total operating revenues of $813 million, a 4% decrease.Total revenue per available seat mile (TRASM) increased 12% to $9.38 cents.Available seat miles (ASMs) decreased by 14% to 8.7 billion.Total operating expenses of $687 million, representing 85% of total operating revenue.Total operating expenses per available seat mile (CASM) remained relatively flat at $7.92 cents.Average economic fuel cost decreased 17% to $2.64 per gallon.CASM ex fuel increased 10% to $5.39 cents.EBITDAR of $315 million, a 52% increase.EBITDAR margin was 38.7%, an increase of 14 percentage points.Total cash, cash equivalents, restricted cash, and short-term investments totaled $830 million, representing 26% of the last twelve months’ total operating revenue.Net debt-to-LTM EBITDAR2 ratio decreased to 2.7x, compared to 2.9x in the previous quarter.
1 The financial information, unless otherwise indicated, is presented in accordance with the International Financial Reporting Standards (IFRS).2 Includes short-term investments.(All figures are reported in U.S. dollars and compared to 3Q 2023 unless otherwise noted)
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Third Quarter 2024 Consolidated Financial and Operating Highlights
(All figures are reported in U.S. dollars and compared to 3Q 2023 unless otherwise noted)
| Third Quarter | |||
| Consolidated Financial Highlights | 2024 | 2023 | Var. |
| Total operating revenues (millions) | 813 | 848 | (4.1%) |
| TRASM (cents) | 9.38 | 8.37 | 12.0% |
| ASMs (million, scheduled & charter) | 8,670 | 10,126 | (14.4%) |
| Load Factor (RPMs/ASMs) | 87.4% | 86.4% | 1.0 pp |
| Passengers (thousand, scheduled & charter) | 7,614 | 8,691 | (12.4%) |
| Fleet (at the end of the period) | 137 | 125 | 12 |
| Total operating expenses (millions) | 687 | 809 | (15.1%) |
| CASM (cents) | 7.92 | 7.98 | (0.8%) |
| CASM ex fuel (cents) | 5.39 | 4.91 | 9.9% |
| Adjusted CASM ex fuel (cents)3 | 4.94 | 4.49 | 10.2% |
| Operating income (EBIT) (millions) | 126 | 39 | >100.0% |
| % EBIT Margin | 15.5% | 4.6% | 10.9 pp |
| Net income (loss) (millions) | 37 | (39) | N/A |
| % Net income (loss) margin | 4.6% | (4.6%) | 9.1 pp |
| EBITDAR (millions) | 315 | 207 | 52.2% |
| % EBITDAR Margin | 38.7% | 24.4% | 14.3 pp |
| Net debt-to-LTM EBITDAR4 | 2.7x | 3.5x | (0.9x) |
Reconciliation of CASM to Adjusted CASM ex fuel:
| Third Quarter | |||
| Reconciliation of CASM | 2024 | 2023 | Var. |
| CASM (cents) | 7.92 | 7.98 | (0.8%) |
| Fuel expense | (2.53) | (3.07) | (17.6%) |
| CASM ex fuel | 5.39 | 4.91 | 9.9% |
| Aircraft and engine variable lease expenses5 | (0.47) | (0.42) | 12.8% |
| Sale and lease back gains | 0.02 | 0.00 | N/A |
| Adjusted CASM ex fuel | 4.94 | 4.49 | 10.2% |
| Note: Figures are rounded for convenience purposes. Further detail found in financial and operating indicators. |
| 3 Excludes fuel expense, aircraft and engine variable lease expenses and sale and lease-back gains. |
| 4 Includes short-term investments. |
| 5 Aircraft redeliveries. |
Third Quarter 2024
(All figures are reported in U.S. dollars and compared to 3Q 2023 unless otherwise noted)
Total operating revenues amounted to $813 million in the quarter, driven by an increase in base fares and ancillary revenue per passenger. This represents only a 4.1% decrease, despite a double-digit reduction in total capacity resulting from aircraft-on-ground (AOGs) due to Pratt & Whitney’s (P&W) engine inspections.
Total capacity, in terms of available seat miles (ASMs), was 8.7 billion, representing a 14.4% reduction.
Booked passengers totaled 7.6 million, a 12.4% decrease. Mexican domestic booked passengers decreased 16.0%, while international booked passengers remained practically unchanged year-over-year.
The load factor for the quarter reached 87.4%, representing an increase of 1.0 percentage point.
TRASM rose 12.0% to $9.38 cents, and total operating revenue per passenger stood at $107, representing a 9.4% increase.
The average base fare per passenger stood at $53, a 9.3% increase. The total ancillary revenue per passenger was $54, reflecting a 9.6% improvement. Ancillary revenue accounted for 50.4% of total operating revenue.
Total operating expenses were $687 million, representing 84.5% of total operating revenue.
CASM totaled $7.92 cents, representing a 0.8% decrease.
The average economic fuel cost decreased by 16.6% to $2.64 per gallon.
CASM ex fuel increased 9.9% to $5.39 cents, mainly due to reduced operating leverage as a result of the AOGs caused by the P&W engine inspections, with an average of 34 aircraft-on-ground during the quarter.
Comprehensive financing result represented an expense of $46 million, compared to a $73 million expense in the same period of 2023.
Income tax expense was $43 million, compared to a $5 million expense registered in the third quarter of 2023.
Net income in the quarter was $37 million, with an earnings per ADS of $32 cents, compared to a $39 million net loss in the same period of 2023.
EBITDAR for the quarter was $315 million, a 52.2% improvement, primarily driven by solid unit revenues, strict cost control, and more favorable jet fuel prices. EBITDAR margin stood at 38.7%, up by 14.3 percentage points.
Balance Sheet, Liquidity, and Capital Allocation
For the quarter, net cash flow provided by operating activities was $233 million. Net cash flow used in investing and financing activities was $149 million and $54 million, respectively.
As of September 30, 2024, cash, cash equivalents, restricted cash, and short-term investments were $830 million, representing 25.9% of the last twelve months' total operating revenue.
The financial debt amounted to $740 million, an increase of 30.5% year-over-year, due to predelivery payments related to 2026 aircraft deliveries and spare engine financing. Total lease liabilities stood at $2,986 million, an increase of 5.7% due to the increase in the total fleet.
Net debt-to-LTM EBITDAR6 ratio stood at 2.7x, compared to 2.9x in the previous quarter and 3.5x in the same period of 2023.
The average exchange rate for the period was Ps.18.92 per U.S. dollar and Ps.19.63 per U.S. dollar at the end of the third quarter, reflecting depreciations of 10.9% and 11.4% of the Mexican peso, respectively.
6 Includes short-term investments.
2024 Guidance
For the fourth quarter of 2024, the Company expects:
| 4Q’24 | 4Q’23 (1) | |
| 4Q’24 Guidance | ||
| ASM growth (YoY) | ~ -7% | -1.1% |
| TRASM | ~$9.6 cents | $9.56 cents |
| CASM ex fuel | ~$5.5 cents | $4.86 cents |
| EBITDAR margin | ~39% | 31.3% |
| Average USD/MXN rate | $20.30 to $20.50 | $17.58 |
| Average U.S. Gulf Coast jet fuel price | $2.20 to $2.30 | $2.70 |
(1) For convenience purposes, actual reported figures for 4Q'23 are included.
For the full year 2024, the Company expects:
| Updated Guidance | Prior Guidance | |
| Full Year 2024 Guidance | ||
| ASM growth (YoY) | ~ -13% | ~ -14% |
| EBITDAR margin | ~36% | 32% to 34% |
| CAPEX (2) | $400 million | $400 million |
(2) CAPEX net of financed fleet predelivery payments.
The fourth quarter and full year 2024 outlook presented above includes the compensation that Volaris expects to receive for the projected grounded aircraft resulting from the GTF engine inspections, in accordance with the Company’s agreement with Pratt & Whitney.
The Company's outlook is subject to unforeseen disruptions, macroeconomic factors, or other negative impacts that may affect its business and is based on several assumptions, including the foregoing, which are subject to change and may be outside the control of the Company and its management. The Company's expectations may change if actual results vary from these assumptions. There can be no assurances that Volaris will achieve these results.
Fleet
During the third quarter, Volaris added one A320neo aircraft to its fleet, bringing the total number of aircraft to 137. At the end of the quarter, Volaris’ fleet had an average age of 6.3 years and an average seating capacity of 197 passengers per aircraft. Of the total fleet, 60% of the aircraft are New Engine Option (NEO) models.
| Third Quarter | Second Quarter | |||||
| Total Fleet | 2024 | 2023 | Var. | 2024 | Var. | |
| CEO | ||||||
| A319 | 3 | 3 | - | 3 | - | |
| A320 | 42 | 40 | 2 | 42 | - | |
| A321 | 10 | 10 | - | 10 | - | |
| NEO | ||||||
| A320 | 52 | 51 | 1 | 51 | 1 | |
| A321 | 30 | 21 | 9 | 30 | - | |
| Total aircraft at the end of the period | 137 | 125 | 12 | 136 | 1 | |