Posted on: 22 October 2014 by Ross McSweeny
Volaris has announced its financial results for the third quarter of 2014 (3Q14), featuring a net income of Ps347 million, a 37% increase year-over-year and a net margin of 9%, which was 2 percentage points up on the same quarter last year.
Total operating revenues were Ps3,995 million for 3Q14, an increase of 7% compared with 3Q13 as a result of record non-ticket revenue per passenger. Those non-ticket revenues increased 48% in 3Q14 compared with 3Q13, reaching Ps742 million. Non-ticket revenue per passenger for the quarter increased 44%, reaching Ps281.
Adjusted EBITDAR was Ps1,085 million, a 7% increase year-over-year with an adjusted EBITDAR margin of 27.2%.
Volaris CEO Enrique Beltranena commented, "After navigating difficult challenges in the last 12 months, we are reporting net profits and net margin expansion, along with improved financial and operating results. We continued managing capacity for profitability in a disciplined way.
“While the Mexican economy has been gradually regaining growth, and the Mexican air travel market has seen slight improvements in the peak travel season, our financial and operating results begin to demonstrate recovered performance and the long term value creation potential of our business model. Third quarter highlights include expanding net margins, on the back of record non-ticket revenue per passenger, and continued cost control discipline. We have experienced tailwinds in fuel costs with the recent drop in oil prices and we would expect this benefit for our ULCC model to continue in the short term."
Affecting the results were exchange rate factors, lower fuel prices and Hurricane Odile. The Mexican peso depreciated 2% year-over-year against the US dollar, as the exchange rate devalued from an average of Ps12.91 per US dollar in the third quarter of 2013 to Ps13.11 per US dollar during the third quarter of 2014. On fuel, the average economic fuel cost per gallon decreased 1% year-over-year in the 3Q14.
Meanwhile, in September 2014, as a result of adverse weather conditions and airport shutdowns in connection with Hurricane "Odile", Volaris cancelled 40 flights to San Jose del Cabo and La Paz, representing 0.5% of the total capacity for the month. Volaris worked in coordination with the federal, state, and local authorities to assist people who were stranded, transporting more than 7,000 passengers on 96 humanitarian aid flights.
Volaris booked 2.6 million passengers in 3Q14. This equates to a 3% growth rate in 3Q14 compared with 3Q13. During the third quarter of 2014, Volaris's total operating revenues were Ps3,995 million, an increase of 7% year-over-year. The average fare decreased 2% in 3Q14, compared with 3Q13.