Volaris earnings fall 51.5% during first quarter 2017

20 April, 2017

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Volaris, the low-cost airline serving Mexico, the United States and Central America, announced its financial results for the first quarter 2017, where the company highlighted adjusted earnings of US$ 58.6 million before interest, taxes, depreciation, amortization, and restructuring or rent costs (EBITDAR). The figure represents a decrease of 51.5% year over year.

Considering a currency exchange rate of 18 Mexican pesos per U.S. dollar, Volaris total operating revenues reached US$ 314.2 million for the first quarter, an increase of 9.1% year over year.

The airline booked 4.0 million passengers in the first quarter of 2017, up 15.6% year over year. Its traffic (measured in terms of revenue passenger miles, or RPMs) increased 14.4% for the same period. System load factor during the quarter decreased 1.8 percentage points year over year to 83.2%.

CEO Enrique Beltranena said the company faced a challenging market and geopolitical environment during the first quarter, but he assured the airline’s fundamentals “remain strong and our solid financial position will enable us to execute our long-term growth plans.”

The company cited traffic volume increase as one of the factors that helped Volaris results. The Mexican airport authority (DGAC) reported overall passenger volume growth for Mexican carriers of 15% year over year in January and February; domestic overall passenger volume increased 14%, while international overall passenger volume increased 19%.

On the negative side, Volaris pointed out currency depreciation and higher fuel price as the main obstacles it faced during the first quarter.

The Mexican peso depreciated 13.2% year over year against the US dollar, from an average exchange rate of MXN 18.0 pesos per US dollar in the first quarter 2016 to MXN 20.4 pesos per US dollar during the first quarter 2017.

The average economic fuel cost per gallon increased 67.8%, year over year, to US$ 2.0 per gallon in the first quarter 2017, year over year.

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