Controladora Vuela Compañía de Aviación (Volaris) the ultra-low-cost airline serving Mexico, the United States, Central and South America, reported total operating revenues of $848 million for the third quarter of 2023, a 10% increase over the prior year period. Third quarter total revenue per available seat mile (TRASM) increased 1.8% to $8.37 cents, with available seat miles (ASMs) up by 8.2% to 10.1 billion.
Volaris total operating expenses reached $809 million, representing 95% of total operating revenue. The airline reported a net loss of $39 million for the quarter and a loss per share of $0.03 and loss per ADS of $0.34 cents. EBITDAR was $207 million, an 18% increase, while EBITDAR margin was 24.4%, an increase of 1.6 percentage points.
Total cash, cash equivalents, restricted cash, and short-term investments totalled $764 million, representing 24% of the last twelve months’ total operating revenue.
Net debt-to-LTM EBITDAR ratio was 3.5 times, remaining unchanged when compared to the previous quarter.
Enrique Beltranena, President & Chief Executive Officer, said: “Volaris' performance in the third quarter showed resilience, resulting in revenue growth. This growth was mainly due to increased passenger volumes and record-high ancillary revenue per passenger. We achieved this by maintaining strong cost control, especially when it came to non-fuel expenses.
Despite facing challenges related to Pratt & Whitney's GTF preventive accelerated inspections, Volaris said that it was fully committed to ensuring the safety, financial stability, and long-term success of our airline. “We are actively addressing the global issue of engine inspections affecting multiple airlines and are working closely with Pratt & Whitney to obtain the necessary technical support and financial compensation for the affected engines… We’ve developed a mitigation plan to partially offset the impact. Our focus for 2024 is to maximize unit revenues and margins while optimizing our network to the best extent possible given the current environment.”
Booked passengers amounted to 8.7 million in the quarter, an increase of 7.0%. Domestic and international booked passengers increased 2.8% and 24%, respectively. Total capacity, in terms of available seat miles (ASMs), increased 8.2% to 10.1 billion.
The load factor for the quarter reached 86.4%, representing an increase of 0.7 percentage points compared to the same period in 2022.
During the third quarter, Volaris added two A321neo aircraft to its fleet, bringing the total number of aircraft to 125 as of September 30 2023. At the end of the quarter, Volaris’ fleet has an average age of 5.6 years and an average seating capacity of 194 passengers per aircraft.
Volaris plans to increase its fleet to approximately 127 aircraft by the end of 2023, “considering an Airbus potential delay of at least two aircraft until 2024” said the airline.