Volaris reports 81.7% YoY decrease in Q2 2020 revenues

Volaris (NYSE: VLRS) (BMV: VOLAR), Mexico-based ultra-low-cost airline has reported
total operating revenues were Ps.1,526 million for the second quarter 2020, a decrease of 81.7% year over year, the company said.

In April, 2020 the Company announced that pursuant to a decree published in the Official Gazette of the Federation, the Government of the United Mexican States, acting through the General Health Council (Consejo de Salubridad General (GHC) declared a health emergency due to force majeure, as a result of the disease pandemic caused by the COVID-19, which would be in effect until new notification.

The Declaration of Emergency and the health security measures announced by the GHC, such as the suspension of non-essential activities in the public, private and social sector, as well as the call to the population to comply with stay at home, impacted the demand for passenger air transportation.

In the second quarter, Volaris reported:

-Total ancillary revenues were Ps.711 million for the second quarter, a decrease of 75.5% year over year. Total ancillary revenues per passenger for the second quarter reached Ps.644, an increase of 25.2% year over year. Total ancillary revenues represented 46.6% of total operating revenues for the second quarter 2020, increasing 11.7 percentage points with respect to the same period of last year.
-Total operating revenues per available seat mile (TRASM) were Ps.108.9 cents for the second quarter, a decrease of 19.7% year over year.
-Operating expenses per available seat mile (CASM) were Ps.274.4 cents for the second quarter, an increase of more than 100% year over year; with an average economic fuel cost per gallon of Ps.43.8 for the second quarter, a decrease of 10.4% year over year.
-Operating expenses per available seat mile excluding fuel, (CASM ex fuel) reached Ps.234.3 cents for the second quarter, an increase of more than 100% year over year; with an average exchange rate depreciation of the Mexican peso against the US dollar of 22.2% year over year.
-Operating loss was Ps.2,347 million for the second quarter, a significant decrease compared with the operating income of Ps.659 million for the same period of last year.
-Operating margin for the second quarter was (153.8%), a deterioration of (161.7) percentage points year over year.
-Net loss was Ps.1,644 million (Ps.1.62 loss per share / USD 0.71 loss per ADS), giving a negative net margin of (107.7%) for the second quarter.

Volaris had 1.1 million passengers booked in the second quarter of 2020, a decrease of 80.5% year over year. Volaris traffic (measured in terms of revenue passenger miles, or RPMs) decreased 78.8% year over year. System load factor during the second quarter decreased 8.1 percentage points year over year to a level of 79.2%.

Total ancillary revenue reduction: For the second quarter of 2020, total ancillary revenue decreased 75.5% year over year. Total ancillary revenue per passenger in the second quarter of 2020 increased 25.2% year over year. The total ancillary revenue generation continues to grow with new and mature products, appealing to customers´ needs, representing 46.6% of total operating revenue of the second quarter, an increase of 11.7 percentage points year over year.

For the second quarter of 2020, TRASM decreased 19.7% year over year. During the second quarter of 2020, the total capacity, in terms of ASMs, decreased 76.6% year over year.
Total Unit Cost Raise and Peso depreciation

During the second quarter of 2020, the Company returned one A319 aircraft and incorporated one A320 NEO aircraft to its fleet. As of June 30, 2020, Volaris´ fleet comprised 82 aircraft (7 A319s, 59 A320s and 16 A321s), with an average age of 5.4 years. At the end of the second quarter of 2020, Volaris´ fleet had an average of 187 seats per aircraft, 76% of our aircraft were sharklet-equipped, and 29% were NEO.

Controladora Vuela Compañía de Aviación, S.A.B. de C.V. (Volaris) is an ultra-low-cost carrier, with point-to-point operations, serving Mexico, the United States and Central America. Volaris offers more than 229 daily flight segments on routes that connect 39 cities in Mexico and 15 cities in the United States and Central America with the youngest fleet in Mexico.