Controladora Vuela Compañía de Aviación, S.A.B. de C.V. (VLRS) Bundle
A Brief History of Controladora Vuela Compañía de Aviación, S.A.B. de C.V. (VLRS)
Controladora Vuela Compañía de Aviación, S.A.B. de C.V., commonly known as Volaris, is a prominent ultra-low-cost carrier based in Mexico. Established in 2005, Volaris has rapidly expanded its operations across Mexico, the United States, Central America, and South America.
Financial Performance in 2024
As of the third quarter of 2024, Volaris reported total operating revenues of US$813 million, reflecting a 4.1% decrease compared to US$848 million in the same quarter of the previous year. The total operating expenses for the quarter were US$687 million, down 15.1% from US$809 million in Q3 2023.
| Financial Indicator | Q3 2024 | Q3 2023 | Variance |
|---|---|---|---|
| Total Operating Revenues (millions) | 813 | 848 | (4.1%) |
| Total Operating Expenses (millions) | 687 | 809 | (15.1%) |
| EBIT (millions) | 126 | 39 | >100.0% |
| Net Income (millions) | 37 | (39) | N/A |
| EBITDAR (millions) | 315 | 207 | 52.2% |
Operational Highlights
In terms of operational metrics, Volaris recorded an EBIT margin of 15.5% for Q3 2024, a significant increase from 4.6% in Q3 2023. The airline's available seat miles (ASMs) decreased by 14.4% to 8.67 billion from 10.12 billion year-over-year. The load factor improved to 87.4%, up from 86.4%.
| Operational Metric | Q3 2024 | Q3 2023 | Variance |
|---|---|---|---|
| Available Seat Miles (ASMs) (millions) | 8,670 | 10,126 | (14.4%) |
| Load Factor | 87.4% | 86.4% | 1.0 pp |
| Passengers (thousands) | 7,614 | 8,691 | (12.4%) |
Cash Flow and Liquidity
Volaris maintained a strong liquidity position, with cash, cash equivalents, restricted cash, and short-term investments totaling US$830 million, representing 26% of the last twelve months’ total operating revenue. The net debt-to-LTM EBITDAR ratio improved to 2.7x, down from 3.5x in the same period last year.
| Liquidity Indicator | Value |
|---|---|
| Cash, Cash Equivalents & Short-term Investments (millions) | 830 |
| Net Debt-to-LTM EBITDAR | 2.7x |
Future Outlook
For the fourth quarter of 2024, Volaris anticipates a year-over-year ASM growth of approximately -7% and projects a TRASM of around $9.6 cents. The company has set a CAPEX forecast of US$400 million for 2024.
| Fourth Quarter 2024 Guidance | Value |
|---|---|
| ASM Growth (YoY) | -7% |
| TRASM (cents) | 9.6 |
| CAPEX (millions) | 400 |
Volaris continues to strengthen its position as a leading low-cost carrier in the region, focusing on operational efficiency and customer service to drive future growth.
A Who Owns Controladora Vuela Compañía de Aviación, S.A.B. de C.V. (VLRS)
Ownership Structure
As of 2024, Controladora Vuela Compañía de Aviación, S.A.B. de C.V. (VLRS) has a diverse ownership structure comprising institutional investors, individual shareholders, and company management. The largest shareholders include:
| Shareholder Type | Shareholder Name | Ownership Percentage |
|---|---|---|
| Institutional Investor | BlackRock, Inc. | 8.5% |
| Institutional Investor | The Vanguard Group, Inc. | 7.1% |
| Institutional Investor | State Street Corporation | 5.9% |
| Individual Shareholders | Enrique Beltranena (CEO) | 1.2% |
| Other Shareholders | Public Float | 77.3% |
Recent Financial Performance
Controladora Vuela reported total operating revenues of $813 million for the third quarter of 2024, representing a 4.1% decrease compared to the same quarter in 2023. The company’s net income for the quarter was $37 million, with earnings per American Depositary Share (ADS) at $0.32.
Market Capitalization
As of September 30, 2024, the market capitalization of Controladora Vuela was approximately $1.7 billion, reflecting fluctuations in stock prices influenced by operational performance and market conditions.
Shareholder Voting Rights
Each American Depositary Share (ADS) represents ten CPOs (Certificados de Participación Ordinaria), which correspond to one Series A share. This structure means that voting rights are concentrated among key shareholders, particularly institutional investors who hold a significant portion of the shares.
Financial Overview
The following table summarizes key financial metrics for Controladora Vuela as of the third quarter of 2024:
| Financial Metric | Value (in millions USD) |
|---|---|
| Total Operating Revenues | $813 |
| Total Operating Expenses | $687 |
| Operating Income (EBIT) | $126 |
| Net Income | $37 |
| EBITDAR | $315 |
| Cash, Cash Equivalents, and Short-term Investments | $830 |
| Financial Debt | $740 |
| Total Assets | $5,492 |
| Total Equity | $320 |
Future Outlook
For the fourth quarter of 2024, Controladora Vuela anticipates a total operating revenue per available seat mile (TRASM) of approximately $9.6 cents and expects an EBITDAR margin of around 39%. The company continues to strategically manage its capacity and operational efficiency to enhance shareholder value.
Controladora Vuela Compañía de Aviación, S.A.B. de C.V. (VLRS) Mission Statement
Overview of Mission Statement
The mission of Controladora Vuela Compañía de Aviación, S.A.B. de C.V. (Volaris) is focused on providing affordable air travel options, ensuring high operational efficiency, and maintaining a commitment to customer satisfaction. The airline aims to be the preferred ultra-low-cost carrier (ULCC) in its markets while reinforcing its position in Mexico, the United States, and Central America.
Key Financial Statistics (2024)
| Metric | Q3 2024 | Q3 2023 | Variance |
|---|---|---|---|
| Total Operating Revenues (millions) | $813 | $848 | (4.1%) |
| Net Income (millions) | $37 | ($39) | N/A |
| EBITDAR (millions) | $315 | $207 | 52.2% |
| Load Factor | 87.4% | 86.4% | 1.0 pp |
| Average Economic Fuel Cost (per gallon) | $2.64 | $3.17 | (16.6%) |
| Available Seat Miles (ASMs, millions) | 8,670 | 10,126 | (14.4%) |
| Total Operating Expenses (millions) | $687 | $809 | (15.1%) |
| CASM (cents) | 7.92 | 7.98 | (0.8%) |
| Net Debt-to-LTM EBITDAR | 2.7x | 3.5x | (0.9x) |
Customer Focus
Volaris emphasizes customer-centric services, aiming to enhance passenger experiences through competitive pricing and a variety of ancillary services. In Q3 2024, the total ancillary revenue per passenger reached $54, reflecting a 9.6% increase compared to the previous year.
Operational Efficiency
The company continues to focus on operational efficiency, achieving a significant increase in EBIT margin from 4.6% in Q3 2023 to 15.5% in Q3 2024. This improvement is attributed to strict cost control measures and favorable market conditions.
Market Position and Future Outlook
As of September 30, 2024, Volaris operates a fleet of 137 aircraft, with plans to expand further. The airline's strategic initiatives include maintaining a strong presence in both domestic and international markets, reinforcing its mission to provide affordable travel options to a broad customer base.
Recent Developments
In light of the ongoing challenges posed by Pratt & Whitney engine inspections, Volaris has successfully navigated operational hurdles while continuing to deliver positive financial results. The company reported a total operating revenue of $3.2 billion for the last twelve months, matching the full-year revenues of 2023.
How Controladora Vuela Compañía de Aviación, S.A.B. de C.V. (VLRS) Works
Business Model
Controladora Vuela Compañía de Aviación, S.A.B. de C.V., known as Volaris, operates as an ultra-low-cost carrier (ULCC) serving domestic and international routes. The company focuses on providing affordable air travel options to its customers while maintaining operational efficiency.
Financial Performance
For the third quarter of 2024, Volaris reported total operating revenues of $813 million, reflecting a decrease of 4.1% compared to the same quarter in 2023. The company’s net income for the quarter was $37 million, with earnings per American Depositary Shares (ADS) of $0.32.
| Financial Metric | Q3 2024 | Q3 2023 | Variance |
|---|---|---|---|
| Total Operating Revenues (millions) | $813 | $848 | -4.1% |
| Net Income (millions) | $37 | ($39) | N/A |
| EBITDAR (millions) | $315 | $207 | +52.2% |
| EBIT Margin | 15.5% | 4.6% | +10.9 pp |
| Load Factor | 87.4% | 86.4% | +1.0 pp |
Operational Metrics
In Q3 2024, Volaris operated with a total capacity of 8.67 billion available seat miles (ASMs), which is a decrease of 14.4% from the previous year. The airline served approximately 7.6 million passengers, representing a 12.4% decline year-over-year.
| Operational Metric | Q3 2024 | Q3 2023 | Variance |
|---|---|---|---|
| Available Seat Miles (ASMs) (billion) | 8.67 | 10.12 | -14.4% |
| Booked Passengers (thousands) | 7,614 | 8,691 | -12.4% |
| Average Base Fare per Passenger | $53 | $48 | +9.3% |
| Total Ancillary Revenue per Passenger | $54 | $49 | +9.6% |
Cost Structure
Volaris reported total operating expenses of $687 million for Q3 2024, a 15.1% decrease compared to Q3 2023. The cost per available seat mile (CASM) was 7.92 cents, while CASM excluding fuel was 5.39 cents.
| Cost Metric | Q3 2024 | Q3 2023 | Variance |
|---|---|---|---|
| Total Operating Expenses (millions) | $687 | $809 | -15.1% |
| CASM (cents) | 7.92 | 7.98 | -0.8% |
| CASM ex Fuel (cents) | 5.39 | 4.91 | +9.9% |
| Average Economic Fuel Cost (per gallon) | $2.64 | $3.17 | -16.6% |
Liquidity and Debt
As of September 30, 2024, Volaris had cash, cash equivalents, restricted cash, and short-term investments totaling $830 million, representing 25.9% of the last twelve months' total operating revenue. The company’s financial debt amounted to $740 million, with total lease liabilities at $2,986 million.
| Liquidity Metric | Amount (millions) |
|---|---|
| Total Cash and Short-term Investments | $830 |
| Total Financial Debt | $740 |
| Total Lease Liabilities | $2,986 |
| Net Debt-to-LTM EBITDAR Ratio | 2.7x |
Future Outlook
For the fourth quarter of 2024, Volaris expects a year-over-year ASM growth of approximately -7%, with a projected EBITDAR margin of about 39%. The average expected USD/MXN exchange rate is forecasted to be between $20.30 and $20.50.
| 4Q 2024 Guidance | Value |
|---|---|
| ASM Growth (YoY) | -7% |
| TRASM (cents) | $9.6 |
| CASM ex Fuel (cents) | $5.5 |
| EBITDAR Margin | ~39% |
| Average USD/MXN Rate | $20.30 - $20.50 |
| Average U.S. Gulf Coast Jet Fuel Price | $2.20 - $2.30 |
How Controladora Vuela Compañía de Aviación, S.A.B. de C.V. (VLRS) Makes Money
Revenue Streams
Controladora Vuela Compañía de Aviación, S.A.B. de C.V. (VLRS), operating as Volaris, generates revenue primarily through the following streams:
- Total operating revenues in Q3 2024 amounted to $813 million, a 4.1% decrease from Q3 2023.
- Passenger revenues accounted for $2.208 billion during the first nine months of 2024, reflecting a 2.3% decrease year-over-year.
- Fare revenues were $1.128 billion, a 6.3% decline compared to the same period in the previous year.
- Other passenger revenues, including ancillary revenues, totaled $1.08 billion, showing a 2.4% increase.
- Non-passenger revenues contributed $99 million for the first nine months of 2024.
Ancillary Revenue
Volaris has successfully increased its ancillary revenue per passenger, which is a significant component of its income:
- Total ancillary revenue per passenger reached $54 in Q3 2024, a 9.6% increase from Q3 2023.
- Ancillary revenue accounted for 50.4% of the total operating revenue in Q3 2024.
Operating Performance
The operational metrics reflect the efficiency and profitability of Volaris:
| Metric | Q3 2024 | Q3 2023 | Variance |
|---|---|---|---|
| Available Seat Miles (ASMs) | 8.67 billion | 10.13 billion | -14.4% |
| Load Factor | 87.4% | 86.4% | +1.0 pp |
| Passengers (thousands) | 7,614 | 8,691 | -12.4% |
| TRASM (cents) | 9.38 | 8.37 | +12.0% |
| CASM (cents) | 7.92 | 7.98 | -0.8% |
Cost Management
Volaris has focused on managing its operating expenses effectively:
- Total operating expenses in Q3 2024 were $687 million, reflecting a 15.1% reduction from Q3 2023.
- Fuel expenses decreased by 29.8% to $219 million.
- CASM ex-fuel increased to $5.39 cents, a 9.9% increase.
Financial Health
Volaris's financial position demonstrates a strong recovery:
- Net income for Q3 2024 was $37 million, compared to a $39 million loss in Q3 2023.
- EBITDAR in Q3 2024 was $315 million, a 52.2% increase year-over-year.
- The net debt-to-LTM EBITDAR ratio improved to 2.7x, down from 3.5x in Q3 2023.
Liquidity Position
As of September 30, 2024, Volaris maintained a robust liquidity position:
- Total cash, cash equivalents, restricted cash, and short-term investments were $830 million, representing 25.9% of the last twelve months' total operating revenue.
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Article updated on 8 Nov 2024
Resources:
- Controladora Vuela Compañía de Aviación, S.A.B. de C.V. (VLRS) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Controladora Vuela Compañía de Aviación, S.A.B. de C.V. (VLRS)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Controladora Vuela Compañía de Aviación, S.A.B. de C.V. (VLRS)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.