Category Archives: Volaris

Volaris begins operation of new route between Fresno, California and Guanajuato

Volaris to increase services to Chicago

Volaris has announced that it will increase capacity on its routes from and to Chicago, as well as opening a new Monterrey-Mazatlán route which will be a seasonal operation.

New seasonal route Monterrey – Mazatlán

Date of operations: From December 7, 2019 to January 20, 2020

Open for sale September the 4^th, 2019

Frequency: 4 flights per week: Monday, Thursday, Friday, and Saturday

Additional frequencies from Chicago

Operation date: From December 7, 2019 to January 13^th, 2020

Open for sale: September the 4, 2019

Chicago Midway – Zacatecas: 2 additional frequencies per week:Monday and Saturday
Chicago Midway – Guadalajara: 2 additional frequencies per week: Tuesday and Thursday
Chicago O’Hare – Guadalajara: 2 additional frequencies per week: Tuesday and Thursday
Chicago Midway – León: 1 additional frequency per week: Saturday
Chicago Midway – Morelia: 3 additional frequencies per week:Wednesday, Friday and Sunday

Volaris reports its first quarter 2019 results

Volaris has made this announcement:

Volaris has announced its financial results for the first quarter 2019.

The following financial information, unless otherwise indicated, is presented in accordance with International Financial Reporting Standards (IFRS).

First Quarter 2019 Highlights

Total operating revenues were Ps.7,192 million for the first quarter, an increase of 22.9% year over year.
Total ancillary revenues were Ps.2,563 million for the first quarter, an increase of 30.5% year over year. Total ancillary revenues per passenger for the first quarter reached Ps.517, increasing 12.1% year over year. Total ancillary revenues represented 35.6% of the total operating revenues for the first quarter 2019, increasing 2 percentage points with respect to the same period of last year.
Total operating revenues per available seat mile (TRASM) totaled Ps.126.1 cents for the first quarter, an increase of 9.0% year over year.
Operating expenses per available seat mile (CASM) were Ps.125.7 cents for the first quarter, a decrease of 0.7% year over year; with an average economic fuel cost per gallon of Ps.46.0 for the first quarter, an increase of 14.8% year over year.
Operating expenses excluding fuel, per available seat mile (CASM ex fuel) reached Ps.78.6 cents for the first quarter, a decrease of 5.8% year over year.
Operating income was Ps.26 million for the first quarter, an improvement compared with the operating loss of Ps.545 million for the same period of last year. Operating margin for the first quarter was 0.4%, an improvement in margin of 9.7 percentage points year over year.
Net income was Ps.519 million (Ps.0.51 per share / US$0.26 per ADS), with a net margin of 7.2% for the first quarter.
At the close of the first quarter, the Mexican peso had appreciated 1.5% against the U.S. dollar with respect to the end of period exchange rate of the previous quarter (Ps.19.68 per US dollar). The Company booked a foreign exchange gain of Ps.1,154 million as a consequence of our U.S. dollar net monetary liability position, as result of the adoption of IFRS16.
Net cash flow provided by operating activities was Ps.3,731 million, in conjunction with cash flow used in investing activities of Ps.379 million and in financing activities of Ps. 2,063 million. The negative net foreign exchange difference was Ps.82 million, with net cash generation in the first quarter of Ps.1,208 million. As of March 31, 2019, cash and cash equivalents were Ps.7,071 million.

Resilient Macroeconomics, Domestic Consumer Demand with Peso Depreciation and Fuel Price Pressures

Resilient macroeconomics and domestic consumer demand: The macroeconomic indicators in Mexico during the first quarter were stable, with same store sales[1] increasing 2.1% year over year; remittances[2] increased 6.4% year over year during first two months of the year; and the Mexican Consumer Confidence Balance Indicator (BCC) [3] increasing in the first quarter 36% year over year.
Air traffic volume increase: The Mexican DGAC reported overall passenger volume growth for Mexican carriers of 5.6% year over year for the first two months of 2019; domestic overall passenger volume increased 5.3%, while international overall passenger volume remained at the same level.
Exchange rate volatility: The Mexican peso depreciated 2.4% year over year against the US dollar, from an average exchange rate of Ps.18.76 pesos per US dollar in the first quarter 2018 to Ps.19.22 pesos per US dollar during the first quarter 2019. At the end of the first quarter, the Mexican peso appreciated 1.5% with respect to the end of period exchange rate of the previous quarter. The Company booked a foreign exchange gain of Ps.1,154 million as a consequence of our US dollar net monetary liability position, resulting from the adoption of IFRS16.
Higher fuel prices: The average economic fuel cost per gallon increased 14.8% to Ps.46.0 per gallon (US$2.4) in the first quarter 2019, year over year.

Passenger Traffic Stimulation, Further Ancillary Revenue Expansion, and Positive TRASM Growth

Passenger traffic stimulation: Volaris booked 5.0 million passengers in the first quarter 2019, up 16.4% year over year. Volaris traffic (measured in terms of revenue passenger miles, or RPMs) increased 14.2% year over year. System load factor during the first quarter increased 1.0 percentage point to 83.2% year over year.
Positive TRASM growth: For the first quarter 2019, TRASM increased 9.0% year over year. During the first quarter 2019, the total capacity, in terms of ASMs, increased 12.8% year over year.
Total ancillary revenue growth: For the first quarter 2019, total ancillary revenues increased 30.5% year over year. Total ancillary revenues per passenger for the first quarter of 2019 increased 12.1% year over year. The total ancillary revenue generation continues to grow with new and matured products, appealing to customers’ needs, representing 35.6% of total operating revenues for the first quarter, up 2 percentage points year over year.
New routes: Volaris began operations in 16 new domestic routes from or to its focus cities Mexico City, Guadalajara, Tijuana and others. Additionally, Volaris launched 17 routes, 10 domestic (Mexico to Ciudad Juarez, Puerto Escondido and Durango; Queretaro to Chihuahua and Puerto Vallarta; Guadalajara to Durango and Queretaro; Monterrey to Oaxaca and Los Cabos; Ciudad Juarez to Chihuahua) and 7 international (Mexico and Guadalajara to El Salvador; Durango to Dallas; Puerto Vallarta to Phoenix; Queretaro to Chicago; Aguascalientesto Chicago (Midway); and Chihuahua to Albuquerque.

The Cost Control Discipline Offset Fuel Price Pressure and Peso Depreciation

CASM and CASM ex fuel for the first quarter 2019 reached Ps.125.7 (US$6.5 cents) and Ps.78.6 cents (US$4.1 cents), respectively. This represented a decrease of 0.7% and 5.8%, respectively; mainly driven by tightening cost control discipline, despite the higher average economic fuel cost per gallon of 14.8% and an average exchange rate depreciation of 2.4%.

Young and Fuel-efficient Fleet

During first quarter 2019, the Company incorporated one aircraft (A321neo) to its fleet; during this quarter no redeliveries were registered. As of March 31, 2019, Volaris’ fleet was composed of 78 aircraft (8 A319s, 55 A320s and 15 A321s), with an average age of 4.8 years. At the end of the first quarter 2019, Volaris’ fleet had an average of 186 seats, 74% of which were in sharklet-equipped aircraft, and 22% were NEO.

Solid Balance Sheet and Good Liquidity

Net cash flow provided by operating activities was Ps.3,731 million, in conjunction with cash flow used in investing activities of Ps.379 million and in financing activities of Ps. 2,063 million; negative net foreign exchange difference was Ps.82 million, while the net cash generation in the first quarter was Ps.1,208 million. As of March 31, 2019, cash and cash equivalents were Ps.7,071 million, representing 24.7% of last twelve months operating revenues. Volaris registered negative net debt (or a positive net cash position) of Ps.4,018 million (excluding lease liability recognized under IFRS16 adoption) and total equity of Ps.3,624 million.

Transition to IFRS 16

The Company adopted IFRS 16 as of January 1st, 2019, using the full retrospective method. The cumulative effect of adopting IFRS 16 has been recognized as an adjustment to the opening balance as of January 1st, 2017 as an increase in assets and liabilities and an adjustment in the retained earnings. The full disclosure of this initial adoption is included in the Company´s 2018 annual report.
This quarterly earnings release includes supplemental information for comparable purposes, with recast 2018 figures with the IFRS 16 adoption effects and were derived from unaudited financial statements included in the quarterly reports on Form 6-K during the year ended as of December 31, 2018.
Since all the aircraft and engine lease contracts are denominated in USDs, starting on March 25, 2019, the Company established a hedge on its USD denominated revenues using the lease liabilities denominated in USD as a hedge instrument. This hedging relationship is designated as a cash flow hedge of forecasted revenues to mitigate the volatility of the foreign exchange variation arising from the revaluation of its lease liabilities. The impact of this hedge will be presented as part of the total operating revenues; however, it was not material for the results of this first quarter.
Additionally, on the same date, the Company established a hedge on a portion of its forecasted fuel expense using as hedge instrument a portion of its USD denominated monetary assets. This hedging relationship is designated as a cash flow hedge of forecasted fuel expense to mitigate the volatility of the foreign exchange variation arising from the revaluation of this portion of USD denominated monetary asset. The impact of this hedge will be presented as part of the total fuel expense; however, it was not material for the results of this first quarter.

Top Copyright Photo: Volaris Airbus A321-271N WL N537VL (msn 8144) LAX (Michael B. Ing). Image: 944620.

Volaris aircraft slide show:

Frontier and Volaris to codeshare

Frontier Airlines (2nd) and Volaris announce a new codeshare agreement which will provide millions of people access to affordable fares between the U.S. and Mexico. This first-ever codeshare agreement between uniquely branded ULCCs will allow both carriers to sell tickets and connecting itineraries on the airlines’ combined networks.

Subject to regulatory approval by authorities in the United States and Mexico, the codeshare routes will be available for purchase this Spring. This agreement will allow Frontier to place and sell tickets with its code (F9) on Volaris operated flights and for Volaris to place its code (Y4) on Frontier operated flights. Once the codeshare is in place passengers will enjoy a seamless low-fare travel experience traveling on Frontier and Volaris.

Beginning in Spring 2018, flights will be available directly through Frontier on the company’s website flyfrontier.com, its mobile application and its call center. Flights will also be available through third party distributers including online travel agencies. Flights also will be available directly through Volaris’ website volaris.com and mobile application.

A natural fit between the carriers’ networks already exists with each serving more than 20 of the same markets. In addition, both carriers fly Airbus A320 aircraft. Frontier operates a fleet of 78 aircraft with 199 additional aircraft on order and Volaris operates a fleet of 71 with 128 additional aircraft on order.

Top Copyright Photo: Frontier Airlines (2nd) Airbus A320-251N WL N307FR (msn 7472) (Champ, the Bronco) DCA (Brian McDonough). Image: 937375.

Frontier Airlines aircraft slide show:

Volaris aircraft slide show:

Bottom Copyright Photo: Volaris Airbus A320-233 WL XA-VLE (msn 6288) (Eduardo) LAX (Jay Selman). Image: 403441.

Airbus, Indigo Partners finalize orders for 430 A320neo Family aircraft

Airbus has announced that it had finalized agreements with Indigo Partners and its four portfolio airlines for the purchase of 430 additional A320neo Family aircraft for ultra-low-cost airlines Frontier Airlines (United States), JetSMART (Chile), Volaris (Mexico) and Wizz Air (Hungary).

The signed purchase agreement follows a Memorandum of Understanding among the parties announced at the Dubai Air Show last month.

The 430-aircraft order is made up of 274 A320neos and 156 A321neos worth $49.5 billion at list prices.

Airlines in the Indigo Partners family had previous placed orders for a total of 427 A320 Family aircraft.

Image: Airbus.

Volaris Costa Rica will launch operations to the USA on March 15, 2018

Volaris, the ultra-low-cost airline serving Mexico, the United States and Central America, announced its affiliate, Vuela Aviación, S.A., was awarded by the Department of Transportation (DOT) of the United States of America a Foreign Air Carrier Permit to provide:

1) Foreign scheduled transportation of persons, property, and mail from points behind Costa Rica via Costa Rica and intermediate points to a point or points in the United States and beyond; and

2) charter air transportation between any point or points in Costa Rica and any point or points in the United States, and between any point or points in the United States and any point or points in a third country or countries, provided that, such service constitutes part of a continuous operation, with or without a change of aircraft, that includes service to the homeland for the purpose of carrying local traffic between Costa Rica and the United States.

Volaris Costa Rica will initiate operations to and from the United States of America on March 15, 2018.

Volaris Costa Rica operated its first revenue flight from San Jose to Guatemala City on November 30, 2016 using an Airbus A320 wet-leased from Volaris (Mexico).

Volaris seeks to replicate its ultra-low-cost model in Central America by offering low base fares and point-to-point service in the region.

Volaris Costa Rica initiated sales of four routes from Central America to the following U.S. destinations: Los Angeles (LAX), New York (JFK), and Washington D.C.(IAD) from San Jose.

Volaris Costa Rica is expected to launch operations with two Airbus A319s and two Airbus A320s.

Volaris (Mexico):

Indigo Partners doubles existing A320neo Family order

Airbus, Indigo Partners’ four portfolio airlines have signed a Memorandum of Understanding for the purchase by the four airlines of 430 additional A320neo Family aircraft. The aircraft will be allocated among the ultra low-cost airlines Frontier Airlines (United States), JetSMART (Chile), Volaris (Mexico) and Wizz Air (Hungary) upon the completion of final purchase agreements between Airbus and the four airlines.

The 430-aircraft commitment, comprised of 273 A320neos and 157 A321neos worth $49.5 billion at list prices, was announced at the Dubai Airshow by Bill Franke, Managing Partner of Indigo Partners, and John Leahy, Airbus Chief Operating Officer Customers, Airbus Commercial Aircraft. When added to existing Airbus A320 Family orders, the new agreement will make Indigo Partners one of the largest customers by order number in the world for the Airbus single-aisle aircraft family. Airlines in the Indigo Partners family previously have placed orders for 427 A320 Family aircraft.

Also present at the announcement were Enrique Beltranena, CEO of Volaris; Barry Biffle, CEO of Frontier Airlines; Estuardo Ortiz, CEO of JetSMART; and József Váradi, CEO of Wizz Air. They confirmed their firm’s individual aircraft orders as follows:

Wizz – 72 A320neo, 74 A321neo
Frontier – 100 A320neo, 34 A321neo
JetSMART – 56 A320neo, 14 A321neo
Volaris – 46 A320neo, 34 A321neo

Indigo Partners’ Bill Franke indicated that engine selections will be made and announced at a later date.

The A320neo Family incorporates the very latest technologies, including new generation engines and Sharklet wing-tip devices, which together will deliver 20 percent fuel savings by 2020. With more than 5,200 orders received from 95 customers since its launch in 2010, the A320neo Family has captured nearly 60 percent market share.

Indigo Partners LLC, based in Phoenix, Arizona, is a private equity fund focused on worldwide investments in air transportation.

In conjunction with this announcement, Frontier Airlines issued this statement:

Frontier Airlines on November 15, 2017 announced its intent to order 134 A320neo Family aircraft from Airbus, which will triple the size of the low-cost carrier over the next 10 years. Valued at a list price of more than $15 billion, this announcement grows Frontier’s order book to more than 200 aircraft and means more than five thousand new, highly skilled jobs for the U.S. These aircraft are part of the single largest Airbus order announcement ever made – a 430 aircraft order valued at a $49.5 billion list price by Indigo Partners, Frontier’s owner.

This new 134 aircraft order is comprised of 100 A320neo and 34 A321neo aircraft. The A321neo will be a new compliment to the carrier’s existing fuel-efficient A321 family fleet. The addition of these aircraft to the fleet will allow Frontier to grow in new and existing markets, provide even more compelling low fares, further improve the carrier’s already industry-leading fuel efficiency and maintain the company’s status of having one of the youngest and most modern fleets in the U.S. The 134 aircraft order announced today will be delivered between 2021 and 2026.

In addition, in 2018 Frontier will start taking delivery of aircraft from Airbus’ U.S.-based Mobile, Ala. production facility.

Additionally, Frontier has also converted its remaining 18 A319neo orders to the A320neo aircraft. The airline currently has 67 A320neo aircraft on order.

This new order will allow Frontier to continue its focus on achieving the lowest costs in the U.S. airline industry and utilizing these savings to lower fares. Earlier this year, Frontier announced a network expansion that makes the carrier’s low fares accessible to 90 percent of Americans.

Photo: Airbus.