Mexican budget airline Volaris reported a return to profit in the fourth quarter (Q4) of 2022 but sustained an annual loss of $30 million.
Q4 earnings per share came to $0.02 but the annual outcome was a $0.03 loss per share. Earnings [EBIDTAR] for the year were down 27% to $586 million and were "negatively impacted by higher fuel expenses".
The $28 million Q4 2022 profit came on the back of a 22% revenue jump to $820 million, compared to Q4 2021. Revenue per available seat mile rose 2.1% to $8.63 cents and available seat miles increasing 18% to 9.5 billion.
Net cash flow provided by operating activities Q4 2022 was $168 million, while cash outflows used in investing and financing activities were $104 million and $102 million.
Strong demand, increased capacity and "healthy booking curves notwithstanding certain headwinds occurring in the markets where Volaris operates" helped drive a strong Q4, the carrier reported, with passenger numbers up 16%, capacity up 18% and ancillary revenue per passenger up 5.1% for the quarter but down 2.5% for the year.
Operating expenses of $2.8bn for the year almost equalled the $2.84bn revenue the carrier reported. In Q4 2022, the expenses came to 93% of operating revenue, compared to 78% in 2021. Fuel costs rose 45% in Q4 and 68% during 2022.
“While the 68% increase in fuel costs impacted our margin in the short term, the discipline and focus our team showed throughout this challenging year is a reminder of why we are poised to lead Mexican air travel in the coming decade as the premier ULCC [ultra low cost carrier] globally,” said Enrique Beltranena, president & chief executive.
By the end of 2022, the carrier said cash, cash equivalents and restricted cash were at $712 million, representing 25% of the 12 months' total operating revenue, with net cash flow from operations at $614 million and cash outflows in investing and financing activities at $131 million and $513 million.
Financial debt and leasing liabilities came to $273 million and $2.79bn, less $712 million of cash, cash equivalents and restricted cash, leaving the carrier with a net debt of $2.27bn.