Posted on: 22 February 2016 by Mark Howells
Volaris has announced its financial results for the fourth quarter (4Q15) and full year 2015, featuring net income of Ps654 million and Ps2,464 million for the respective periods, with the full year amount showing a 407% increase over 2014’s Ps605 million.
The corresponding net margins for 4Q15 and full-year 2015 were 12.8% and 13.6%.
Operating income for 4Q15 was Ps736 million and for the whole year totalled Ps2,510 million, with an operating margin of 14.4% and 13.8%, respectively. These represented year-over-year operating margin improvements of 3.6 and 12.3 percentage points, respectively.
The total operating revenues were Ps5,092 million and Ps18,180 million for 4Q15 and full year, equating to a year-over-year increase of 28.7% for 4Q15 and one of 29.5% for the whole year.
The operating expenses per available seat mile (CASM) were Ps114.8 cents and Ps111.5 cents for the fourth quarter and full year respectively, representing a decrease of 1.4% and 4.6% year over year for the corresponding periods.
“We are pleased with the results achieved by the company during the fourth quarter and the full year 2015,” declared Volaris CEO Enrique Beltranena. “Once again, Volaris demonstrated resilient performance and achieved outstanding operating, commercial and financial indicators, reaping the benefits of a strong passenger air travel environment within its domestic and international VFR markets in Mexico. Our ultra-low-cost carrier business model and flexibility to growing demand has positioned Volaris as a strong player in the aviation industry.”
Volaris booked 3.3 million passengers in 4Q15, a 24.3% year over year growth. The airline’s revenue passenger miles (RPMs) increased 24.9% for the same period. Volaris’s passenger market share, the second largest among Mexican carriers and first in the low-fare segment, was 25.2% in the fourth quarter in both domestic and international markets.
In 4Q15, Volaris continued to experience pressures in US-dollar denominated costs such as aircraft rents, international airport costs, and maintenance expenses due to the depreciation of the Mexican peso. Despite these challenges, the CASM for the fourth quarter was Ps114.83 cents, a 1.4% decrease compared with 4Q14, mainly driven by lower fuel prices.
The net increase of cash and cash equivalents was Ps.750 million during the fourth quarter, mainly driven by the resources provided by operating activities of Ps.930 million. As of December 31, 2015, Volaris had a balance of Ps.5,157 million in unrestricted cash and cash equivalents, representing 28% of the last twelve month operating revenues. Volaris recorded negative net debt (or a positive net cash position) of Ps.3,566 million and total equity of Ps.6,825 million.
During 4Q15, Volaris incurred capital expenditures of Ps356 million, which included pre-delivery payments for new aircraft and rotable spare parts, furniture and equipment for Ps520 million and intangibles assets for Ps24 million. These acquisitions were offset by reimbursements of aircraft pre-delivery payments of Ps137 million, and proceeds from disposals of rotable spare parts, furniture and equipment of Ps51 million.
Volaris has continued to remain active in its fuel risk management programme. The airline hedged 50% of its 4Q15 fuel consumption at an average strike price of $2.07 per gallon, which combined with the 50% unhedged consumption, resulted in a blended average economic fuel cost of $1.52 per gallon for the quarter.