Mexican low-cost carrier Volaris reported a net loss of $51 million in the first quarter of the year, swinging from its net profit of $33 million last year.
The result was driven by an 11.7% drop in revenues, totalling $678 million. Meanwhile, operating expenses were up 3.6%, outgrowing revenues at $688 million and resulting in a negative $10 million EBIT result. The company reported an $104 million EBIT in last year's first quarter.
The company's EBITDAR result was down 13.6% to $203 million, with an EBITDAR margin of 29.9% — down 0.7 percentage points.
The drop in revenues was likely driven by the 28.8% drop in average base fare per passenger, down to $39. In addition, total revenue per available seat mile (TRASM) was down 17% to 7.76 cents, while cost per ASM (CASM) was down only 2.5% to 7.88 cents. CASM excluding fuel was up 4.5% to 5.40 cents.
“Volaris remains focussed, as always, on disciplined execution as we navigate a period of geopolitical and economic uncertainty,” said Volaris CEO and president Enrique Beltranena. “Our tactical capacity decisions will continue to be grounded in two guiding priorities: customer demand and sustained profitability.”
Capacity was up 6.3%, with domestic up 7.1% and international up 5.2%. The company's load factor was down 1.6 percentage point to 85.4%.
During the first quarter, the airline retired one A319ceo aircraft and added two A320neo and one A321neo to its fleet, bringing the total number of aircraft to 145.
The company maintained its capital expenditure for the full year is expected to be around $250 million. However, the company updated its capacity guidance, trimming down from a 13% growth down to around 8-9% for the full year.
For the second quarter, capacity growth is expected to be up around 9-10%. TRASM is set to be around 7.4 to 7.5 cents, while CASM excluding fuel is expected to be 5.7 to 5.8 cents. EBITDAR margin is expected to be 24-25%, down from 35.9% a year prior.