Volaris Reports Financial Results for the First Quarter 2022

MEXICO CITY, April 27, 2022 /PRNewswire/ -- Controladora Vuela Compañía de Aviación, S.A.B. de C.V. (NYSE:VLRS, BMV:VOLAR) ("Volaris" or "The Company"), the ultra-low-cost airline serving Mexico, the United States of America, Central and South America, today announces its financial results for the first quarter 2022^[1]. 

First Quarter 2022 Highlights^[2] 

(All figures are reported in U.S. dollars and compared to 1Q 2021 unless otherwise noted)

Volaris reported double-digit growth in revenue and EBITDAR in the first quarter, maintained a strong liquidity position and a healthy balance sheet. Strong TRASM growth in the quarter was partially offset by rising fuel prices.

• Total operating revenue of $567 million, an 80% increase. Total revenue per available seat mile (TRASM) increased 18% to $7.0 cents.
• Operating expenses of $598 million, a 70% increase. Operating expenses per available seat mile (CASM) increased 13% to $7.4 cents, while CASM ex-fuel decreased 8% to $4.4 cents.
• Net loss of $49 million. Loss per share $0.04 and loss per ADS of $0.42.
• EBITDAR of $97 million, a 52% increase. EBITDAR margin was 17.0%, a decrease of 3.2 percentage points.
• Cash generation of $9 million, with a cash, cash equivalents and restricted cash position of $750 million, representing 31% of the last twelve months total operating revenue.
• Net debt-to-LTM EBITDAR ratio of 2.3 times, the lowest level in Volaris' history.

"2022 started with sharply rising fuel prices and a new surge in Covid cases. Strong demand trends remained, however, and we are observing less and less of a disruption in demand from new Covid cases and customers recognizing Volaris' reliability. This strong demand allowed us to gradually raise fares to offset rising fuel prices. Our 1Q22 results give us confidence in the overall strength in demand of our existing markets and our ability to closely match it with new capacity." said Enrique Beltranena, President & Chief Executive Officer. "We will continue on our path of a disciplined growth strategy and are well-positioned for the summer season as VFR and leisure travelers are eager to fly." Enrique added.

First Quarter 2022 Financial and Operations Highlights^[3] 

(All figures are reported in U.S. dollars and compared to 1Q 2021 unless otherwise noted)

Total operating revenue in the quarter was $567 million, an 80% increase, driven by higher capacity, healthy load factors and stronger unit revenue per passenger. Moreover, demand remained relatively strong throughout the quarter despite the increase of Covid-19 cases (Omicron variant) in our markets early in the quarter.

Volaris transported 7.0 million passengers in the quarter, an increase of 64%. Domestic and international passengers increased 58% and 95%, respectively; while total capacity, in terms of available seat miles (ASMs), increased 50% to 8.1 billion. Load factor reached 83.5%, 5.4 pp higher than the same period of 2021.

TRASM of $7.0 cents represented a 18% increase. Average base fare was $46, an increase of 24%. Ancillary revenue per passenger was $35, a 7% decrease. Ancillary revenue represented 43% of total operating revenue, compared to 51% in the same period of 2021.Total operating revenue per passenger increased 8% to $81.

Total operating expenses in the quarter were $598 million, a 70% increase, driven by higher fuel cost, which soared due to geopolitical conflicts in Eastern Europe. The average economic fuel cost per gallon increased 64% to $3.15 per gallon in the period. CASM totaled $7.4 cents, 13% higher when compared to same period of 2021. CASM ex-fuel decreased 8% to $4.4 cents due to higher aircraft utilization in the first quarter of 2022; in the same period of last year aircraft utilization was impacted by second wave of Covid-19.

Comprehensive financing result represented a loss of $33 million in first quarter of 2022, compared to a loss of $16 million in the same period of 2021. This result was impacted by higher financial cost.

In the first quarter, the Mexican peso depreciated 1% against the US dollar to an average of Ps.20.52 per US dollar. At the end of the quarter, the Mexican peso stood at Ps.19.99 per US dollar, a 3% appreciation compared to the exchange rate at the end of the fourth quarter of 2021.

Income tax benefit was $16 million, compared to the $15 million benefit posted in the first quarter of 2021.

Net loss in the quarter stood at $49 million, with loss per share of $0.04 and loss per ADS of $0.42.

EBITDAR was $97 million, an increase of 52%, driven by strong revenue growth, although substantially higher fuel costs were a negative factor during the quarter. EBITDAR margin was 17.0%, a decrease of 3.2 percentage points.

Balance Sheet, Liquidity and Capital Allocation 

During the first quarter, Volaris generated $9 million in cash. As of March 31^st, cash, cash equivalents and restricted were $750 million, representing 31% of the last twelve months total operating revenue. Net cash flow provided by operating activities was $196 million, while cash outflows in investing and financing activities were $6 million and $183 million, respectively. Positive net foreign exchange difference was $2 million.

On March 31, net debt was $1,931 million, which included $242 million of financial debt, $2,439 million of leasing liabilities, less cash, cash equivalents and restricted of $750 million. The net debt-to-LTM EBITDAR ratio was 2.3 times, compared to 11.2 times in the same period of 2021 and 2.5 times in fourth quarter of 2021.

Full Year 2022 Outlook 

Despite the macroeconomic and geopolitical challenges around the globe, demand remains strong across Volaris' route system. Accordingly, Volaris expects to continue with its growth plans while closely monitoring demand trends. More specifically, the Company maintains its prior guidance and forecast full year growth in capacity (ASMs) in the mid-twenties compared to 2021 and revises upward its total operating revenue for 2022 in the range of $2.8 to $3.0 billion. Also, the Company expects a full year CASM ex-fuel, to increase between 1% and 3% compared to 2021; and an EBITDAR margin in the high twenties. The Company continues to anticipate capex spend in the range of $140 to $145 million. This outlook assumes a full year average USD/MXN rate of Ps.20.50 to Ps.20.80 and an average economic fuel price of $3.10 to $3.40 per gallon.

This guidance also assumes no significant unexpected disruptions related to COVID-19 or other, exogenous macroeconomic or other negative impacts to its business.

Fleet 

During the first quarter, the Company incorporated three new A320neo aircraft to its fleet. As of March 31^st, 2022, Volaris' fleet was composed of 104 aircraft (6 A319s, 81 A320s and 17 A321s), of which 46% are New Engine Option (NEO) models. Volaris' fleet had an average of 188 seats per aircraft and an average age of 5.6 years. The Company plans to end 2022 approximately with 115 aircraft.

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: 

Félix Martínez / Naara Cortés Gallardo / [email protected] 

Media Contact: 

Gabriela Fernández / [email protected]

Conference call and webcast details                              

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 188 and its fleet from 4 to 105 aircraft. Volaris offers more than 500 daily flight segments on routes that connect 44 cities in Mexico and 27 cities in the United States, Central and South America with the youngest fleet 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 eleven consecutive years. For more information, please visit: www.volaris.com.

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 that describe the Company's objectives, plans or goals, or actions the Company may take in the future, are forward-looking statements. Forward-looking statements include, without limitation, statements regarding the Company's intentions and expectations regarding the delivery schedule of aircraft on order, announced new service routes and customer savings programs. Forward-looking statements should not be read as a guarantee or assurance of future performance or results and 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 with respect to 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. Additional information concerning these, and other factors is contained in the Company's US Securities and Exchange Commission filings. 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.

 

 

 

 

 

 

 

 

 

 

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

[2] As of January 1, 2022, all figures are reported in U.S. dollars.

[3] As of January 1, 2022, all figures are reported in U.S. dollars.

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SOURCE Volaris