Volaris (VOLARA) Q3 2024 earnings summary

Executive summary

• Achieved fourth consecutive quarter of net income, demonstrating resilience amid operational challenges, including Pratt & Whitney engine inspections and weather disruptions.

• Successfully executed aircraft grounding mitigation without increasing leverage, enabling capacity expansion.

• Streamlined operations by reducing fleet by about 25% during peak season, yet limited ASM reduction to 11% over twelve months.

• Reinforced cost efficiency leadership with one of the lowest CASM ex fuel levels globally.

• Maintained strong customer satisfaction, with Net Promoter Score rising to 34% and significant improvements in operational reliability.

Financial highlights

• Q3 2024 operating revenue was $813 million, down 4% year-over-year despite a 14% capacity reduction.

• EBIT reached $126 million (15.5% margin), up from $39 million in Q3 2023; EBITDAR was $315 million (38.7% margin), a record high.

• Net income was $37 million, reversing a $39 million loss in Q3 2023; EPS was $0.32 per ADS.

• Total liquidity at quarter-end was $830 million, 25.9% of LTM revenue.

• TRASM was 9.38 cents, up 12% year-over-year; CASM ex-fuel was 5.39 cents, up 9.9%.

Outlook and guidance

• Full-year 2024 revenue expected to be close to 2023 despite double-digit capacity reduction.

• Raised full-year EBITDA margin guidance to ~36% (prior 32%-34%).

• Q4 2024 guidance: ASM down ~7% YoY, TRASM ~9.6 cents, CASM ex-fuel ~5.5 cents, EBITDA margin ~39%.

• Capacity expected to return to 2023 levels by H2 2025, with low to mid-teens annual growth targeted.

• FY'24 CAPEX expected at $400 million (net of financed fleet predelivery payments).