Volaris (VOLARA) Q4 2024 earnings summary

Executive summary

• Achieved net profit every quarter in 2024, with full-year net income of $126 million and a 36% EBITDA/EBITDAR margin, despite significant operational challenges from GTF engine inspections and aircraft groundings.

• Maintained stable revenue of $3.1 billion, carrying 29.5 million passengers with 13% fewer ASMs year-over-year, reflecting effective commercial and operational strategies.

• Ancillary revenues exceeded 50% of total revenues, with record per-passenger ancillary sales and strong loyalty program growth.

• Recognized for safety and sustainability, including top 10 global low-cost carrier safety ranking and Dow Jones Sustainability Index inclusion.

• Strengthened customer preference with a Net Promoter Score of 37.4% and operational excellence (99.5% schedule completion, 83.6% on-time performance).

Financial highlights

• Full-year net income reached $126 million, up from $8 million in 2023; EBIT margin was 13%, EBITDA/EBITDAR margin 36%.

• Fourth quarter operating revenues were $835 million, down 7% year-over-year due to lower ASMs and FX headwinds.

• EBITDA/EBITDAR for the year was $1.1 billion, a 39% increase; net debt-to-EBITDA/EBITDAR improved to 2.6x from 3.3x.

• Operating cash flow exceeded $300 million for the year, with liquidity at $954 million (30% of revenues).

• CASM ex-fuel rose 12% to $5.40 for the year, driven by groundings and maintenance costs.

Outlook and guidance

• 2025 guidance: EBITDA/EBITDAR margin of 34%-36%, ASM growth of ~13% (below 2023 levels), CapEx (ex-financed PDPs) of ~$250 million.

• First quarter 2025: ASM growth ~7%, CASM $7.9-$8.0, CASM ex-fuel $5.5-$5.6, EBITDA/EBITDAR margin 28%-29%.

• FX assumptions: 21-21.2 MXN/USD for 2025; jet fuel $2.15-$2.25/gal.

• Ongoing monitoring of U.S.-Mexico border dynamics and potential further network adjustments.

• Peso depreciation and seasonality expected to pressure near-term revenue.