Mexican low-cost airline Volaris reported a net profit of $37 million in its third quarter 2024 results, swinging from a net loss of $39 million in last year's third quarter. This comes despite a 4.1% decrease in revenues, which totalled $813 million in the financial period. Total operating expenses were down 15.1% to $687 million.
“Volaris’ third quarter results demonstrate the resilience of our business model and our focus on execution as we have successfully navigated one year of Pratt & Whitney’s engine inspections,” said Volaris president and CEO Enrique Beltranena. “Despite the challenges, we delivered our fourth consecutive quarter of net income.”
The company's operating income soared from $39 million in third quarter 2023 to $126 million this year, resulting in an EBIT margin of 15.5%.
“We strategically managed capacity while providing great ULCC service to our customers and reinforcing our position as the preferred airline in our core markets,” added Beltranena.
Volaris' load factor was up one percentage point to 87.4%. Its passengers carried totalled 7.6 million, down 12.4%. Capacity was also down 14.4% in the period.
The airline's cost per available seat mile (ASM) was 7.92 cents in the quarter, compared to 7.98 cents last year. Additionally, the company's total revenue per available seat mile (TRASM) was up 12% to 9.38 cents. The company's EBITDAR was up 52% to $315 million, with an EBITDAR margin of 38.7%, increasing 14 percentage points. Average fuel costs were down 17% to $2.64 per gallon.
Total cash, cash equivalents, and short-term investments totalled $830 million. Its financial debt amounted to $740 million at the quarter's end, up 30.5% over last year's third quarter end. This reflected pre-delivery payments related to 2026 aircraft deliveries and spare engine financing. Total lease liabilities was $3bn, up 5.7% over last year due to its increased fleet size. The airline had 137 aircraft in its fleet at the end of the quarter, compared to 125 at the end of last year's third quarter.
The company's net debt to LTM EBITDAR ratio was 2.7x, down from 2.9x in the previous quarter.
Volaris updated its full year 2024 guidance, with capacity now expected to be down around 13% - previously estimated to be down 14%. EBITDAR margin is expected to be around 36% for the full year, compared to its previous estimates of between 32% and 34%. Capital expenditures remains at $400 million for the full year.