Volaris reports 8.8% increase in Q1 2020 operating revenue

Mexico-based ultra low-cost airline Volaris (NYSE: VLRS) (BMV: VOLAR) has reported total operating revenues were Ps.7,824 million for the first quarter, an increase of 8.8% year over year, the company said.

Other first quarter 2020 highlights include:

-Total ancillary revenues were Ps.2,978 million for the first quarter, an increase of 16.2% year over year. Total ancillary revenues per passenger for the first quarter reached Ps.564, an increase of 9.3% year over year. Total ancillary revenues represented 38.1% of total operating revenues for the first quarter 2020, increasing 2.5 percentage points with respect to the same period of last year.
-Total operating revenues per available seat mile (TRASM) were Ps.128.8 cents for the first quarter, an increase of 2.1% year over year.
-Operating expenses per available seat mile (CASM) were Ps.124.1 cents for the first quarter, a decrease of 1.2% year over year; with an average economic fuel cost per gallon of Ps.41.4 for the first quarter, a decrease of 10.1% year over year.
-Operating expenses per available seat mile excluding fuel, (CASM ex fuel) reached Ps.82.1 cents for the first quarter, an increase of 4.4% year over year; with an average exchange rate depreciation of the Mexican peso against the USD by 3.4% year over year.
-Operating income was Ps.308 million for the first quarter, a significant increase compared with the operating income of Ps.26 million for the same period of last year. Operating margin for the first quarter was 3.9%, an improvement in margin of 3.5 percentage points year over year.
-Net loss was Ps.1,493 million (Ps.1.48 loss per share/USD 0.63 loss per ADS), for a negative net margin of (19.1%) for the first quarter.

During the first quarter of 2020, the net cash flow generated by operating activities were Ps.2,819 million. The net cash flow used in investing activities reached Ps.37 million. The net cash flow used in financing activities were Ps.1,869 million, which included Ps.1,819 million of aircraft rental payments. The positive net foreign exchange difference was Ps.1,765 million, thus having a net increase of cash and cash equivalents in the first quarter of Ps.2,678 million. As of March 31, 2020, cash and cash equivalents were Ps.10,658 million.
At the end of March 2020, the Company began to experience a significant drop in the demand for air travel which has seriously affected the entire aviation industry as a result of the pandemic caused by the SARS-CoV-2 (COVID-19).

On March 24, 2020, the Company announced a decrease in capacity measured by available seat miles (ASMs) for the months of March and April 2020 of approximately 50% versus the scheduled originally published. On March 30, 2020, the Mexican government through the General Health Council (GHG) declared a health emergency due to force majeure, which will be in effect until April 30, 2020. As a result, on March 31, 2020 Volaris announced an additional capacity reduction for the month of April 2020, which results in a decrease of approximately 80% versus the originally scheduled capacity.

Volaris booked 5.3 million passengers in the first quarter of 2020, an increase of 6.3% year over year. Volaris traffic (measured in terms of revenue passenger miles, or RPMs) increased 8.9% year over year. System load factor during the first quarter increased 1.5 percentage points year over year, reaching 84.7%.

Total ancillary revenue growth: For the first quarter of 2020, total ancillary revenue increased 16.2% year over year. Total ancillary revenue per passenger in the first quarter of 2020 increased 9.3% year over year. The total ancillary revenue generation continues to grow with new and mature products, appealing to customers´ needs, representing 38.1% of total operating revenue of the first quarter, an increase of 2.5 percentage points year over year.

During the first quarter of 2020, the net cash flow generated by operating activities were Ps.2,819 million. The net cash flow used in investing activities reached Ps.37 million. The net cash flow used in financing activities were Ps.1,869 million, which included Ps.1,819 million of aircraft rental payments. The positive net foreign exchange difference was Ps.1,765 million, thus having a net increase of cash and cash equivalents in the first quarter of Ps.2,678 million. As of March 31, 2020, cash and cash equivalents were Ps.10,658 million, representing 30.1% of last twelve months of the operating revenue. Volaris registered a negative net debt (or a positive net cash position) of Ps.4,817 million (excluding lease liability recognized under the IFRS16 adopt

Controladora Vuela Compañía de Aviación, S.A.B. de C.V. (Volaris) (NYSE: VLRS and BMV: VOLAR) serves Mexico, the United States and Central America. Volaris offers low base fares to build its market, providing quality service and extensive customer choice. S