Volaris (VOLARA) Q1 2025 earnings summary

Executive summary

• Q1 2025 total operating revenues were $678 million, down 11.7% year-over-year, mainly due to peso depreciation and lower revenue per passenger, resulting in a net loss of $51 million compared to a $33 million profit in Q1 2024.

• Capacity plan was recalibrated, with ASM growth guidance for 2025 revised to 8%-9% from 13%-15% to align with U.S.-Mexico demand trends.

• Focus remains on flexibility, cost discipline, cash preservation, and serving resilient VFR (Visiting Friends and Relatives) traffic.

• Ancillary revenues remained strong, accounting for over 50% of total revenue, supporting resilience amid base fare pressure.

• Net Promoter Score was 39% and on-time performance reached 83.8%.

Financial highlights

• EBITDAR was $203 million, down 13.6% year-over-year, with an EBIT margin of -1.5%; EBITDA margin was 29.9%.

• CASM was 7.88 cents, down 2.5% year-over-year; CASM ex-fuel was 5.40 cents, up 4.5% year-over-year.

• Average economic fuel cost per gallon declined 12.5% to $2.63.

• Liquidity position at $862 million (28% of LTM revenues); net debt/EBITDA at 2.7x, up from 2.6x in the previous quarter.

• Total operating expenses rose 3.6% to $688 million, representing 101% of total operating revenue.

Outlook and guidance

• No full-year 2025 margin or EBITDA guidance due to macroeconomic uncertainty; updates will follow as visibility improves.

• Full-year 2025 ASM growth expected at 8%-9% with $250 million in CapEx.

• Q2 2025 guidance: ASM growth 9%-10%, TRASM $7.4-$7.5 cents, CASM ex-fuel $5.7-$5.8 cents, EBITDA/EBITDAR margin 24%-25%.

• Guidance includes expected compensation for grounded aircraft due to GTF engine inspections.