MEXICO CITY, Feb. 26, 2024 (GLOBE NEWSWIRE) — Controladora Vuela Compañía de Aviación, S.A.B. de C.V. (NYSE:VLRS, BMV:VOLAR) (“Volaris” or “the Company”), the ultra-low-cost carrier (ULCC) serving Mexico, the United States, Central, and South America, today announces its financial results for the fourth quarter and full year 20231.
Fourth Quarter 2023 Highlights
(All figures are reported in U.S. dollars and compared to 4Q 2022 unless otherwise noted)
Net income of $112 million. Earnings per share of $0.10 and earnings per ADS of $0.97 cents.
Total operating revenues of $899 million, a 10% increase.
Total revenue per available seat mile (TRASM) increased 11% to $9.56 cents.
Available seat miles (ASMs) decreased 1.1% to 9.4 billion.
Total operating expenses of $735 million, representing 82% of total operating revenue.
Total operating expenses per available seat mile (CASM) decreased 2.3% to $7.81 cents.
Average economic fuel cost decreased 16% to $3.13 per gallon.
CASM ex fuel increased 11% to $4.86 cents.
EBITDAR of $281 million, a 35% increase.
EBITDAR margin was 31.3%, an increase of 6.0 percentage points.
Total cash, cash equivalents, restricted cash, and short-term investments totaled $789 million, representing 24% of the last twelve months’ total operating revenue.
Net debt-to-LTM EBITDAR2 ratio decreased to 3.4x, compared to 3.9x in 2022.
Enrique Beltranena, President & Chief Executive Officer, said: “Throughout 2023, we gained valuable lessons when resizing the operations, capitalizing on strong demand while adjusting our network, and turned a very complex situation into a solid financial result for the fourth quarter. We recorded our highest-ever historical quarterly TRASM and posted a net income of $112 million. Our performance demonstrated resilience in the face of the challenges encountered throughout the year, such as the extended FAA downgrade of Mexico to CAT 2, Pratt & Whitney’s engine preventive accelerated inspections, and slot reductions at the Mexico City International Airport. Our proactive strategies and mitigation plan have proven effective.
Looking ahead, 2024 holds promise, as our booking curves and total unit revenues indicate continuing favorable trends aligned with our guidance. We expect that our focus on operational efficiency, customer satisfaction, and prudent capacity management will continue to drive profitability.”
Full Year 2023 Highlights3
(All figures are reported in U.S. dollars and compared to FY 2022 unless otherwise noted)
Net income of $8 million. Earnings per share of $0.01 and earnings per ADS of $0.07.
Total operating revenues of $3,259 million, a 14% increase.
Total revenue per available seat mile (TRASM) increased 3.8% to $8.38 cents.
Available seat miles (ASMs) increased 10% to 38.9 billion.
Total operating expenses of $3,036 million, representing 93% of total operating revenue.
Total operating expenses per available seat mile (CASM) decreased 1.7% to $7.81 cents.
Average economic fuel cost decreased 18% to $3.11 per gallon.
CASM ex fuel increased 13% to $4.81 cents.
EBITDAR of $823 million, a 40% increase.
EBITDAR margin was 25.2%, an increase of 4.7 percentage points.
Fourth Quarter and Full Year 2023 Financial and Operations Highlights3
(All figures are reported in U.S. dollars and compared to 4Q 2022 and FY 2022 unless otherwise noted)
Fourth Quarter
Full Year
Consolidated Financial Highlights
2023
2022
Var.
2023
2022
Var.
Total operating revenue (millions)
899
820
9.6 %
3,259
2,847
14.5 %
TRASM (cents)
9.56
8.63
10.7%
8.38
8.07
3.8%
ASMs (million, scheduled & charter)
9,402
9,504
(1.1%)
38,890
35,281
10.2%
Load Factor (scheduled, RPMs/ASMs)
88.1%
87.3%
0.8 pp
86.0%
85.6%
0.4 pp
Passengers (thousand, scheduled & charter)
8,247
8,475
(2.7%)
33,497
31,051
7.9%
Fleet (at the end of the period)
129
117
12
129
117
12
Total operating expenses (millions)
735
760
(3.3%)
3,036
2,803
8.3 %
CASM (cents)
7.81
8.00
(2.3%)
7.81
7.95
(1.7%)
CASM excl. fuel (cents)
4.86
4.39
10.7%
4.81
4.26
12.8%
Adjusted CASM excl. fuel (cents)4
5.07
4.10
23.7%
4.57
3.97
15.0%
Operating income (EBIT) (millions)
164
60
173.3 %
223
44
406.8 %
% EBIT Margin
18.3%
7.3%
11.0 pp
6.8%
1.5%
5.3 pp
Net income (loss) (millions)
112
(22)
N/A
8
(80)
N/A
% Net income (loss) margin
12.5%
(2.7%)
15.2 pp
0.2%
(2.8%)
3.1 pp
EBITDAR (millions)
281
208
35.1 %
823
586
40.4 %
% EBITDAR Margin
31.3%
25.3%
6.0 pp
25.2%
20.6%
4.7 pp
Net debt-to-EBITDAR5
3.4x
3.9x
-0.5x
3.4x
3.9x
-0.5x
Reconciliation of CASM to Adjusted CASM ex fuel:
Fourth Quarter
Full Year
Reconciliation of CASM
2023
2022
Var.
2023
2022
Var.
CASM (cents)
7.81
8.00
(2.3%)
7.81
7.95
(1.7%)
Fuel expense
(2.95)
(3.61)
(18.4%)
(3.00)
(3.69)
(18.9%)
CASM ex fuel
4.86
4.39
10.7%
4.81
4.26
12.8%
Aircraft and engine variable lease expenses6
0.15
(0.36)
N/A
(0.27)
(0.35)
(24.4%)
Sale and lease back gains
0.06
0.07
(15.2%)
0.03
0.06
(47.9%)
Adjusted CASM ex fuel
5.07
4.10
23.7%
4.57
3.97
15.0%
Fourth Quarter 2023
Total operating revenues in the quarter were $899 million, a 10% increase, driven by an improved load factor and increased adoption of ancillary offerings.
Booked passengers amounted to 8.2 million in the quarter, a decrease of 2.7%. Domestic booked passengers decreased 7.7%, while international booked passengers increased 17%.
Total capacity, in terms of available seat miles (ASMs), decreased 1.1% to 9.4 billion.
The load factor for the quarter reached 88.1%, representing an increase of 0.8 percentage points compared to the same period in 2022.
TRASM increased 11% to $9.56 cents in the quarter and total operating revenue per passenger stood at $109, representing a 13% increase.
The average base fare was $54, a decline of 2.3%. The total ancillary revenue per passenger was $55, a 32% increase. Ancillary revenue represented 50% of total operating revenue, 7.6 percentage points above the fourth quarter 2022.
Total operating expenses in the quarter were $735 million, representing 82% of total operating revenue, compared to 93% in the fourth quarter of 2022.
CASM totaled $7.81 cents, a 2.3% decrease when compared to the same period of 2022. The average economic fuel cost decreased 16% to $3.13 per gallon in the period.
CASM ex fuel increased 11% to $4.86 cents. These increases were mainly caused by higher fleet depreciation, reduced capacity, and a stronger Mexican peso; partially offset by lower redelivery costs due to lease extensions and the compensation from Pratt & Whitney.
Comprehensive financing result represented an expense of $35 million in the fourth quarter of 2023, compared to a $38 million expense in the same period of 2022. For the period, the average exchange rate was Ps.17.58 per U.S. dollar, a 11% appreciation compared to the same quarter of 2022. At the end of the fourth quarter, the exchange rate stood at Ps.16.89 per U.S. dollar.
Income tax expense for the quarter was $17 million, compared to $44 million registered in the same period of 2022.
Net income in the quarter was $112 million, with an earnings per share of $0.10 and an earnings per ADS of $0.97 cents.
EBITDAR for the quarter was $281 million, an increase of 35% compared to the same period in 2022, primarily attributable to higher unit revenues and lower fuel prices. EBITDAR margin stood at 31.3%, an increase of 6.0 percentage points compared to the same quarter of the previous year.
Cash Flow
Net cash flow provided by operating activities in the quarter was $218 million. Net cash flow used in financing and investing activities was $82 million and $113 million, respectively.
Full Year 2023
Total operating revenues were $3,259 million, an increase of 14% compared to 2022.
Volaris transported 33.5 million passengers, an increase of 7.9%, while total capacity for the year, in terms of available seat miles (ASMs), increased 10% to 38.9 billion.
Load factor reached 86.0%, an increase of 0.4 percentage points compared to 2022.
TRASM increased 3.8% to $8.38 cents. Average base fare was $49, a 7.9% decrease and total operating revenue per passenger stood at $97, representing an increase of 6.1%.
Ancillary revenue per passenger was $48, posting a 26% increase and represented 49% of total operating revenues.
Volaris posted total operating expenses of $3,036 million, representing 93% of total operating revenue,
compared to 98% in 2022.
CASM decreased 1.7% to $7.81 cents. The average economic fuel cost of $3.11 per gallon, a 18% decrease compared to 2022 levels. CASM ex fuel increased 13% to $4.81 cents.
The comprehensive financing result for the full year 2023 amounted to an expense of $215 million, compared to the $176 million expense posted in 2022. The average exchange rate was Ps.17.76 per US dollar, a 12% appreciation compared to 2022. At the end of the period, the exchange rate stood at Ps.16.89 per US dollar.
The Company recorded an income tax benefit for the full year 2023 of $0.4 million, compared to an income tax benefit of $52 million registered in 2022.
For the full year 2023, Volaris reported a net income of $8 million, with an earnings per share of $0.01 and earnings per ADS of $0.07.
Volaris registered an EBITDAR of $823 million, a 40% increase compared to 2022. EBITDAR margin was 25.2%, an increase of 4.7 percentage points.
Balance Sheet, Liquidity and Capital Allocation
As of December 31, 2023, cash, cash equivalents, restricted cash and short-term investments were $789 million, representing 24% of the last twelve months total operating revenue.
Net cash flow provided by operating activities was $730 million, while cash used in investing and
financing activities were $462 million and $214 million, respectively.
The financial debt amounted to $653 million, while total lease liabilities stood at $2,906 million, bringing the net debt to $2,770 million.
Net debt-to-LTM EBITDAR7 ratio stood at 3.4x, compared to 3.9x in 2022 and 3.5x in the third quarter of 2023.
2024 Guidance
For the first quarter of 2024, the Company expects:
1Q’24
1Q’23 (1)
1Q’24 Guidance
ASM growth (YoY)
-16% to -18%
+17.7
TRASM
$8.5 to $8.7 cents
$7.71 cents
CASM ex fuel
$5.5 to $5.7 cents
$4.65 cents
EBITDAR margin
25% to 27%
16.8%
Average USD/MXN rate
Ps. $17.00 to $17.20
Ps. 18.70
Average U.S. Gulf Coast jet fuel price
$2.55 to $2.65
$3.06
(1) For convenience purposes, actual reported figures for 1Q’23 are included.
For the full year 2024, the Company expects:
2024
2023 (2)
Full Year Guidance
ASM growth (YoY)
-16% to -18%
+10.2%
EBITDAR margin
31% to 33%
25.2%
CAPEX (3)
~$300 million
$252 million
Average USD/MXN rate
Ps. $17.70 to $17.90
Ps.17.76
Average U.S. Gulf Coast jet fuel price
$2.50 to $2.60
$2.73
(2) For convenience purposes, actual reported figures for 2023 are included.
(3) CAPEX net of financed fleet predelivery payments.
The first 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 removals, in accordance with the Company’s agreement with Pratt & Whitney that was previously announced on December 5, 2023.
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 four A321neo aircraft to its fleet, bringing the total number of aircraft to 129 as of December 31st, 2023. At the end of the year, Volaris’ fleet has an average age of 5.7 years and an average seating capacity of 196 passengers per aircraft. Of the total fleet, 59% of the aircraft are New Engine Option (NEO) models.
Fourth Quarter
Third Quarter
Total Fleet
2023
2022
Var.
2023
Var.
CEO
A319
3
4
(1)
3
–
A320
40
40
–
40
–
A321
10
10
–
10
–
NEO
A320
51
48
3
51
–
A321
25
15
10
21
4
Total aircraft at the end of the period
129
117
12
125
4
The information included in this release, including the Company’s full-year 2023 financial information, has not been audited and reflects the Company’s current estimates based on information available as of the date of this release. Such information is subject to change as a result of the completion of the Company’s financial and operating closing procedures, customary audit procedures, and other developments that may occur before the completion of these procedures. Accordingly, you should not place undue reliance on this preliminary information or guidance, which may differ materially from actual results. Volaris’ future performance depends on several factors. It cannot be inferred that any period’s performance or its comparison year over year will indicate a similar performance in the future.
Investors are urged to carefully read the Company’s periodic reports filed with or provided to the Securities and Exchange Commission, for additional information regarding the Company.
Investor Relations Contact
Ricardo Martínez / ir@volaris.com
Media Contact
Israel Álvarez / ialvarez@gcya.net
Conference Call Details
Date:
Tuesday, February 27, 2024
Time:
8:00 am Mexico City / 9:00 am New York (USA) (ET)
Webcast link:
Volaris Webcast (View the live webcast)
Dial-in & Live Q&A link:
Volaris Dial-in and Live Q&A
Click on the call link and complete the online registration form.
Upon registering you will receive the dial-in info and a unique PIN to join the call, as well as an email confirmation with the details.
Select a method for joining the call:
Dial-In: A dial-in number and unique PIN are displayed to connect directly from your phone.
Call Me: Enter your phone number and click “Call Me” for an immediate callback from the system.
About Volaris
*Controladora Vuela Compañía de Aviación, S.A.B. de C.V. (“Volaris” or “the Company”) (NYSE:VLRS, 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 211 and its fleet from 4 to 133 aircraft. Volaris offers more than 550 daily flight segments on routes that connect 43 cities in Mexico and 28 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 fourteen 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 US Securities Act of 1933, as amended, and Section 21E of the US 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. …
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