Volaris Reports Financial Results for the Fourth Quarter 2024: Net Income of $46 million

MEXICO CITY, Feb. 24, 2025 (GLOBE NEWSWIRE) -- Controladora Vuela Compañía de Aviación, S.A.B. de C.V. (NYSE: VLRS and BMV: VOLAR) ("Volaris” or "the Company”), the ultra-low-cost carrier (ULCC) serving Mexico, the United States, Central and South America, today reports its unaudited financial results for the fourth quarter and full year of 2024¹.

Fourth Quarter 2024 Highlights

(All figures are reported in U.S. dollars and compared to 4Q 2023 unless otherwise noted)

• Net income of $46 million. Earnings per American Depositary Shares (ADS) of $40 cents.
• Total operating revenues of $835 million, a 7% decrease.
• Total revenue per available seat mile (TRASM) decreased 2% to $9.35 cents.
• Available seat miles (ASMs) decreased by 5% to 8.9 billion.
• Total operating expenses of $718 million, representing 86% of total operating revenue.
• Total operating expenses per available seat mile (CASM) increased 3% at $8.04 cents.
• Average economic fuel cost decreased 20% to $2.51 per gallon.
• CASM ex fuel increased 17% to $5.68 cents.
• EBITDAR of $331 million, an 18% increase.
• EBITDAR margin was 39.6%, an increase of 8 percentage points.
• Total cash, cash equivalents, restricted cash, and short-term investments totaled $954 million, representing 30% of the last twelve months' total operating revenue.
• Net debt-to-LTM EBITDAR² ratio decreased to 2.6x, compared to 2.7x in the previous quarter.

Looking ahead, we anticipate the ongoing engine inspections to affect a significant portion of our fleet not only in 2025, but also in 2026 and 2027. In response, we remain focused on harmonizing three critical areas to maximize return on investment: 1) balancing unscheduled engine removals, inspections, and GTF engine returns; 2) managing new aircraft arrivals from Airbus; and 3) optimizing aircraft returns and lease extensions.

For 2025, considering these three elements, our strategic approach will continue to prioritize profitability while reinforcing our position as the preferred airline in our core markets. We will maintain a rational and prudent approach to capacity growth in 2025, targeting an expansion of around 13%. Despite this growth, Volaris' total capacity will remain below 2023 levels, with approximately 40% now allocated to the international market.”

_{¹ The financial information, unless otherwise indicated, is presented in accordance with the International Financial Reporting Standards (IFRS).}

_{² Includes short-term investments.}

Full Year 2024 Highlights

(All figures are reported in U.S. dollars and compared to FY 2023 unless otherwise noted)

• Net income of $126 million. Earnings per American Depositary Shares (ADS) of $1.10.
• Total operating revenues of $3,142 million, a 4% decrease.
• Total revenue per available seat mile (TRASM) increased 10% to $9.24 cents.
• Available seat miles (ASMs) decreased 13% to 34.0 billion.
• Total operating expenses of $2,729 million, representing 87% of total operating revenue.
• Total operating expenses per available seat mile (CASM) increased 3% to $8.03 cents.
• Average economic fuel cost decreased 12% to $2.75 per gallon.
• CASM ex fuel increased 12% to $5.40 cents.
• EBITDAR of $1,141 million, a 39% increase.
• EBITDAR margin was 36.3%, an increase of 11 percentage points.

(All figures are reported in U.S. dollars and compared to 4Q 2023 and FY 2023 unless otherwise noted)

Reconciliation of CASM to Adjusted CASM ex fuel:

(All figures are reported in U.S. dollars and compared to 4Q 2023 unless otherwise noted)

Total operating revenues for the quarter amounted to $835 million, a 7.1% decrease, primarily due to the depreciation of the Mexican peso against the U.S. dollar and a reduction in ASMs, partially offset by higher ancillary revenues.

Total capacity, in terms of available seat miles (ASMs), was 8.9 billion, representing a 5.0% decline.

Booked passengers totaled 7.8 million, a 4.8% decrease. Mexican domestic booked passengers decreased 7.7%, while international booked passengers increased 4.0%.

The load factor for the quarter reached 87.3%, representing a 0.8 percentage point decrease.

TRASM declined 2.2% to $9.35 cents, and total operating revenue per passenger stood at $106, decreasing 2.4%.

The average base fare per passenger stood at $50, an 8.4% decrease. The total ancillary revenue per passenger was $57, reflecting a 3.6% improvement. Ancillary revenues accounted for 53.3% of total operating revenues.

Total operating expenses were $718 million, representing 86.0% of total operating revenues.

CASM totaled $8.04 cents, representing a 2.9% increase.

The average economic fuel cost decreased by 19.9% to $2.51 per gallon.

CASM ex fuel increased 16.8% to $5.68 cents, mainly due to reduced operating leverage as a result of the aircraft-on-ground (AOG) caused by the P&W engine inspections, with an average of 34 AOGs during the quarter.

Comprehensive financing result represented an expense of $76 million, compared to a $35 million expense in the same period of 2023.

Income tax benefit was $5 million, compared to a $17 million expense registered in the fourth quarter of 2023.

Net income in the quarter was $46 million, with an earnings per ADS of $40 cents.

EBITDAR for the quarter was $331 million, a 17.8% improvement, primarily driven by strict cost control, and more favorable jet fuel prices. EBITDAR margin stood at 39.6%, up by 8.4 percentage points.

Cash Flow

For the quarter, net cash flow provided by operating activities was $308 million. Net cash flow used in investing and financing activities was $85 million and $98 million, respectively.

Full Year 2024

(All figures are reported in U.S. dollars and compared to FY 2023 unless otherwise noted)

Total operating revenues were $3,142 million, a decrease of 3.6% compared to 2023.

Volaris transported 29.5 million passengers, a decrease of 12.0%, while total capacity for the year, in terms of available seat miles (ASMs), decreased 12.6% to 34.0 billion.

Load factor reached 86.8%, a 0.8 percentage point increase compared to 2023.

TRASM increased 10.3% to $9.24 cents. Average base fare was $51, a 4.5% increase and total operating revenue per passenger stood at $107, representing an increase of 9.6%.

Ancillary revenue per passenger was $55, posting a 14.8% increase and represented 51.7% of total operating revenues.

Volaris posted total operating expenses of $2,729 million, representing 86.9% of total operating revenues.

CASM increased 2.8% to $8.03 cents. The average economic fuel cost of $2.75 per gallon, a 11.6% decrease compared to 2023 levels. CASM ex fuel increased 12.2% to $5.40 cents.

The comprehensive financing result for the full year 2024 amounted to an expense of $231 million, compared to a $215 million expense posted in 2023.

The Company recorded an income tax expense for the full year 2024 of $56 million, compared to an income tax benefit of $0.4 million registered in 2023.

For the full year 2024, Volaris reported a net income of $126 million, with earnings per ADS of $1.10, compared to an $8 million net income in 2023.

Volaris registered an EBITDAR of $1,141 million, a 38.6% increase compared to 2023. EBITDAR margin was 36.3%, an increase of 11.1 percentage points.

Balance Sheet, Liquidity, and Capital Allocation

As of December 31, 2024, cash, cash equivalents, restricted cash, and short-term investments were $954 million, representing 30.4% of the last twelve months' total operating revenue.

Net cash flow provided by operating activities was $1,090 million. Net cash flow used in investing and financing activities was $472 million and $472 million, respectively.

The financial debt amounted to $810 million, an increase of 24.0% year-over-year, due to pre-delivery payments related to 2026 aircraft deliveries and spare engine financing. Total lease liabilities stood at $3,061 million, an increase of 5.9% due to the increase in the total fleet.

Net debt-to-LTM EBITDAR⁶ ratio stood at 2.6x, compared to 2.7x in the previous quarter and 3.3x at the end of 2023.

The average exchange rate for the fourth quarter was Ps.20.07 per U.S. dollar and Ps.20.27 per U.S. dollar at the end of the period, reflecting a depreciation of 14.1% and 20.0% of the Mexican peso, respectively. As for full year 2024, the average exchange rate was Ps.18.30 per U.S. dollar, a 3.0% appreciation compared to the previous year.

_{⁶ Includes short-term investments.}

2025 Guidance

For the full year 2025, the Company expects:

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 fourth quarter, Volaris added two A320ceo, one A320neo and three A321neo aircraft to its fleet, bringing the total number of aircraft to 143. At the end of the quarter, Volaris' fleet had an average age of 6.4 years and an average seating capacity of 198 passengers per aircraft. Of the total fleet, 60% of the aircraft are New Engine Option (NEO) models.

Investor Relations Contact

Ricardo Martínez / ir@volaris.com

Media Contact

Israel Álvarez / ialvarez@gcya.net

Conference Call Details

*Controladora Vuela Compañía de Aviación, S.A.B. de C.V. ("Volaris” or "the Company”) (NYSE: VLRS and BMV: VOLAR) is an ultra-low-cost carrier, with point-to-point operations, serving Mexico, the United States, Central and South America. Volaris offers low base fares to build its market, providing quality service and extensive customer choice. Since the beginning of operations in March 2006, Volaris has increased its routes from 5 to more than 230 and its fleet from 4 to 145 aircraft. Volaris offers more than 480 daily flight segments on routes that connect 44 cities in Mexico and 29 cities in the United States, Central and South America, with one of the youngest fleets in Mexico. Volaris targets passengers who are visiting friends and relatives, cost-conscious business and leisure travelers in Mexico, the United States, Central, and South America. Volaris has received the ESR Award for Social Corporate Responsibility for fifteen consecutive years. For more information, please visit ir.volaris.com. Volaris routinely posts information that may be important to investors on its investor relations website. The Company encourages investors and potential investors to consult the Volaris website regularly for important information about Volaris.

Forward-Looking Statements

Statements in this release contain various forward-looking statements within the meaning of Section 27A of the U.S. Securities Act of 1933, as amended, and Section 21E of the U.S. Securities Exchange Act of 1934, as amended, which represent the Company's expectations, beliefs, or projections concerning future events and financial trends affecting the financial condition of our business. When used in this release, the words "expects,” "intends,” "estimates,” "predicts,” "plans,” "anticipates,” "indicates,” "believes,” "forecast,” "guidance,” "potential,” "outlook,” "may,” "continue,” "will,” "should,” "seeks,” "targets” and similar expressions are intended to identify forward-looking statements. Similarly, statements describing the Company's objectives, plans or goals, or actions the Company may take in the future are forward-looking. Forward-looking statements include, without limitation, statements regarding the Company's outlook, the expectation of receiving certain compensation in connection with the GTF engine removals, and the anticipated execution of its business plan and focus on its 2025 priorities. Forward-looking statements should not be read as a guarantee or assurance of future performance or results. They will not necessarily be accurate indications of the times at or by which such performance or results will be achieved. Forward-looking statements are based on information available at the time those statements are made and/or management's good faith belief as of that time concerning future events and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements. Forward-looking statements are subject to several factors that could cause the Company's actual results to differ materially from the Company's expectations, including the competitive environment in the airline industry, the Company's ability to keep costs low; changes in fuel costs, the impact of worldwide economic conditions on customer travel behavior; the Company's ability to generate non-ticket revenue; and government regulation. The Company's U.S. Securities and Exchange Commission filings contain additional information concerning these and other factors. All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements set forth above. Forward-looking statements speak only as of the date of this release. You should not put undue reliance on any forward-looking statements. We assume no obligation to update forward-looking statements to reflect actual results, changes in assumptions, or changes in other factors affecting forward-looking information except to the extent required by applicable law. If we update one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect to those or other forward-looking statements.

Supplemental Information on Non-IFRS Measures

We evaluate our financial performance by using various fi