Volaris, the Lowest Cost Public Airline in the Americas reports fourth quarter 2020 results: Operating Margin at 12%; CASM ex-fuel at $4.13 U.S. dollar cents; Strong Balance Sheet and Sound Business Model | News

MEXICO CITY, Feb. 18, 2021 /PRNewswire/ — Volaris* (NYSE: VLRS and BMV: VOLAR), the ultra-low-cost airline serving Mexico, the United States of America and Central America, today announces its financial results for the fourth quarter 2020.

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

Fourth Quarter 2020 Highlights

During the fourth quarter of 2020, Volaris continued reinforcing its strategy to navigate the uncertainties of the SARS-CoV-2 (COVID-19) pandemic, focusing on its financial strength, cost reduction, liquidity preservation, capacity recovery and taking advantage of market opportunities.

For the fourth quarter, the Company posted an operating margin of 11.9%. Volaris continued to implement cost reduction initiatives and achieved a reduction in operating expenses per available seat mile in U.S. dollars of 8.7% as compared to 2019.

On December 11, 2020, the Company concluded an upsized, primary follow-on equity offering of 134,000,000 of its Ordinary Participation Certificates (Certificados de Participación Ordinarios), or CPOs, in the form of American Depositary Shares, or ADSs, at a price to the public of U.S.$11.25 per ADS in the United States of America and other countries outside Mexico, pursuant to the Company’s shelf registration statement filed with the Securities and Exchange Commission. In connection with the offering, the underwriters exercised their option to purchase up to 20,100,000 additional CPOs in the form of ADSs. The Company received net proceeds of approximately U.S.$164 million dollars, which it will use for general corporate purposes. Volaris ended the fourth quarter of 2020 with Ps.$10,103 million in cash and cash equivalents and total equity of Ps.2,796 million.

During the fourth quarter, the Company was able to ramp up service (ASMs) to 94.9% when compared to the same period of the prior year. The domestic market led the capacity recovery, where Volaris operated 99.1% ASMs versus the same period in 2019. In the international market, Volaris operated 85.5% ASMs compared to the same period in 2019. During the fourth quarter 2020, Volaris began operations on two new domestic and seven new international routes.

During 2020, Volaris carried more than 14.7 million passengers after successfully implementing its biosecurity protocol in April 2020.

The main results for the fourth quarter are described as follows:

  • Total operating revenues were Ps.8,086 million for the fourth quarter, a decrease of 16.9% year over year.
  • Total ancillary revenues were Ps.3,877 million for the fourth quarter, an increase of 21.4% year over year. Total ancillary revenues per passenger for the fourth quarter reached Ps.798, an increase of 43.3% year over year. Total ancillary revenues represented 48.0% of total operating revenues for the fourth quarter 2020, increasing 15.2 percentage points with respect to the same period of last year.
  • Total operating revenues per available seat mile (TRASM) were Ps.138.1 cents for the fourth quarter, a decrease of 10.9% year over year.
  • Operating expenses per available seat mile (CASM) were Ps.120.6 cents for the fourth quarter, a decrease of 2.3% year over year, with an average economic fuel cost per gallon of Ps.37.2 for the fourth quarter, a decrease of 18.8% year over year.
  • Operating expenses per available seat mile excluding fuel, (CASM ex-fuel) were Ps.85.3 cents for the fourth quarter, an increase of 12.2% year over year, with an average exchange rate depreciation of the Mexican peso against the U.S. dollar of 7.0% year over year.
  • Operating income was Ps.960 million for the fourth quarter, a decrease of 51.2% compared with the same period of last year. Operating margin for the fourth quarter was 11.9%, a decrease of 8.4 percentage points year over year.
  • Net income was Ps.897 million (Ps.0.85 earnings per share / U.S.$0.43 earnings per ADS), a net margin of 11.1% for the fourth quarter.
  • At the close of the fourth quarter, the Mexican peso appreciated 11.2% against the U.S. dollar (Ps.19.95 per U.S. dollar) with respect to the exchange rate at the close of the previous quarter (Ps.22.46 per U.S. dollar). The Company booked a net foreign exchange gain of Ps.1,048 million derived from its U.S. dollar net monetary liability position. 

    During the fourth quarter of 2020, the net cash flow generated by operating activities was Ps.1,551 million. The net cash flow generated by investing activities was Ps.77 million. The net cash flow generated by financing activities was Ps.883 million, which included Ps.2,242 million of aircraft rental payments. The negative net foreign exchange difference was Ps.609 million. As a result, there was a net increase in cash and cash equivalents in the fourth quarter of Ps.1,901 million. As of December 31, 2020, cash and cash equivalents were Ps.10,103 million.

  • Despite the progress made in the fourth quarter 2020, there remain significant challenges in the current period with COVID-19 case counts increasing in both Mexico and the USA. Historically, the first quarter of any year tends to be a challenging quarter for airlines and in the context of the COVID-19 pandemic, it is even more so. For the first quarter 2021, the Company expects weakness in demand and booking curves to compress. Volaris operates approximately 30% of its network from Mexico to the USA and expects a short-term reduction in demand for cross border flights as a result of recent USA regulations requiring international passengers arriving to the USA to have completed a negative COVID-19 test not more than 72 hours prior to departure. As a result, the Company’s network plans for the first quarter of 2021 will be more conservative, focused on deploying appropriate levels of capacity to align with the changing demand environment. At present, Volaris intends to operate approximately 80% of capacity as compared to the same period of last year, as measured by ASMs. This still represents a strong capacity comeback from the COVID-19 pandemic as compared to the global industry, which is currently operating at 56% of capacity compared to the previous year. Nonetheless, as the first quarter is still in progress, Volaris cannot offer any assurance as to how actual results will compare to the expected results mentioned herein.

Fuel Price reduction and Peso Depreciation

  • Fuel price reduction: The average economic fuel cost per gallon decreased 18.8% in the fourth quarter of 2020, year over year, to Ps.37.2 per gallon (U.S.$1.9).
  • Peso depreciation: The Mexican peso depreciated 7.0% against the U.S. dollar year over year, from an average exchange rate of Ps.19.28 per U.S. dollar in the fourth quarter of 2019 to Ps.20.63 per U.S. dollar during the fourth quarter of 2020. At the end of the fourth quarter of 2020, the Mexican peso (Ps.19.95 per U.S. dollar) depreciated 5.9% with respect to the exchange rate at the end of the same period of the last year (Ps.18.85 per U.S. dollar).

Passenger Traffic Contraction, Ancillary Revenue Growth and Increased Route Network

  • Passenger traffic contraction: Volaris had 4.9 million booked passengers in the fourth quarter of 2020, a decrease of 15.3% year over year. Volaris traffic (measured in revenue passenger miles, or RPMs) decreased 13.1% year over year. System load factor during the fourth quarter decreased 7.4 percentage points year over year to 80.2%.
  • Total ancillary revenue growth: For the fourth quarter of 2020, total ancillary revenue and total ancillary revenue per passenger increased 21.4% and 43.3% year over year, respectively. The total ancillary revenue generation continues to grow with new and mature products, focusing on customers’ needs, and represents 48.0% of total operating revenue of the fourth quarter, an increase of 15.2 percentage points year over year.
  • TRASM decrease: For the fourth quarter of 2020, TRASM decreased 10.9% year over year. During the fourth quarter of 2020, the total capacity, measured by ASMs, decreased 5.1% year over year.
  • New routes: During the fourth quarter of 2020, Volaris began operations in two new domestic routes and seven new international routes. In the domestic market: 1) Mexico City to Campeche, Campeche; and 2) Cancun, Quintana Roo to Oaxaca, Oaxaca. In the international market: 1) Mexico City to Dallas, Texas; 2) Mexico City to Houston, Texas; 3) Mexico City to Fresno, California; 4) Mexico City to Ontario, California; 5) Mexico City to San Jose, California; 6) Mexico City to Sacramento, California; and 7) Morelia, Michoacán to Chicago O´Hare, Illinois.

Total Unit Cost Increase and Peso Depreciation  

  • CASM and CASM ex fuel in the fourth quarter of 2020 was Ps.120.6 (U.S.$6.04 cents) and Ps.85.3 cents (U.S.$4.27), respectively. This represented a decrease of 2.3% for CASM and an increase of 12.2% for CASM ex fuel, year over year, mainly driven by the capacity reduction measured in available seat miles (ASMs), and the depreciation of the Mexican peso against the U.S. dollar by 7.0%. 

Young and Fuel-Efficient Fleet

  • During the fourth quarter of 2020, the Company returned one A319 aircraft and incorporated three new A320 NEO aircraft into its fleet. As of December 31, 2020, Volaris’ fleet comprised 86 aircraft (6 A319s, 64 A320s and 16 A321s), with an average age of 5.3 years. At the end of the fourth quarter of 2020, Volaris’ fleet had an average of 188 seats per aircraft, 79% of our aircraft were sharklet-equipped, and 35% were NEOs.

Solid Balance Sheet and Liquidity with Net Cash Flow Generated by Operating Activities

  • As of December 31, 2020, cash and cash equivalents were Ps.10,103 million, representing 45.6% of last twelve months operating revenue. Volaris registered a negative net debt (or a positive net cash position) of Ps.4,749 million (excluding the lease liability recognized under IFRS16) and total equity of Ps.2,796 million.
  • During the fourth quarter of 2020, the net cash flow generated by operating activities was Ps.1,551 million. The net cash flow generated by investing activities was Ps.77 million. The net cash flow generated by financing activities was Ps.883 million, which included Ps.2,242 million of aircraft rental payments. The negative net foreign exchange difference was Ps.609 million. As a result, there was a net increase of cash and cash equivalents in the fourth quarter of Ps.1,901 million.

Non-Derivative Financial Instruments                                       

  • During 2019, the Company established hedges on its U.S. dollar denominated revenues through a non-derivative financial instrument, using the lease liabilities denominated in U.S. dollar as a hedge instrument. This hedging relationship was designated as a cash flow hedge of forecasted revenues to mitigate the volatility of the foreign exchange variation arising from the revaluation of the lease liabilities. During the fourth quarter 2020, the impact of these hedges was Ps.174 million, which has been included as part of the total operating revenue.
  • Additionally, during 2019, the Company established hedges on a portion of its forecasted fuel expense, through a non-derivative financial instrument, using as a hedge instrument a portion of its U.S. dollar denominated monetary assets. This hedging relationship was 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 U.S. dollar denominated monetary asset. During the fourth quarter 2020, the impact of these hedges was Ps.84 million, which is included as part of the total fuel expense.
  • For the hedging relationships described, the effective portion of the hedging instrument’s change in fair value is recognized in Other Comprehensive Income or OCI. The accounting records corresponding to the recycling of the OCI are made in accordance with IFRS 9. Under this standard, the portion recorded in OCI is recognized in the results in the same period in which the expected hedging for cash flows affects the result of the period. As of December 31, 2020, OCI includes a negative foreign exchange impact of Ps.1,577 million. As of December 31, 2019, OCI includes a positive foreign exchange effect of Ps.14 million.

Investors are urged to carefully read the Company’s periodic reports filed with or provided to the Securities and Exchange Commission, for additional information regarding the Company.

Conference Call/Webcast Details:

Presenters for the Company:

Mr. Enrique Beltranena, President & CEO

Mr. Holger Blankenstein, Airline Commercial and Operation EVP

Mr. Jaime Pous, Chief Legal Officer and Corporate Affairs SVP and Interim CFO

Date:

Friday, February 19, 2021

Time:

10:00 am U.S. EDT (9:00 am Mexico City Time)

United States dial in (toll free):

1-877-830-2576

Mexico dial in (toll free):

001-800-514-6145

Brazil dial in (toll free):

0800-891-6744

International dial in:

+ 1-785-424-1726

Participant passcode:

VOLARIS

Webcast will be available at:

https://services.choruscall.com/links/vlrs210219KKfUd2nS.html  

About Volaris:

*Controladora Vuela Compañía de Aviación, S.A.B. de C.V. (“Volaris” or the “Company”) (NYSE: VLRS and BMV: VOLAR), is an ultra-low-cost carrier, with point-to-point operations, serving Mexico, the United States and Central America. Volaris offers low base fares to build its market, providing quality service and extensive customer choice. Since the beginning of operations in March 2006, Volaris has increased its routes from five to more than 177 and its fleet from four to 87 aircraft. Volaris offers more than 337 daily flight segments on routes that connect 43 cities in Mexico and 25 cities in the United States and Central America with the youngest fleet in Mexico. Volaris targets passengers who are visiting friends and relatives, cost-conscious business and leisure travelers in Mexico, the United States and Central America. Volaris has received the ESR Award for Social Corporate Responsibility for eleven consecutive years. For more information, please visit: www.volaris.com.

Forward-looking Statements:

Statements in this release contain various forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which represent the Company’s expectations, beliefs or projections concerning future events and financial trends affecting the financial condition of our business. When used in this release, the words “expects,” “intends,” “estimates,” “predicts,” “plans,” “anticipates,” “indicates,” “believes,” “forecast,” “guidance,” “potential,” “outlook,” “may,” “continue,” “will,” “should,” “seeks,” “targets” and similar expressions are intended to identify forward-looking statements. Similarly, statements that describe the Company’s objectives, plans or goals, or actions the Company may take in the future, are forward-looking statements. Forward-looking statements include, without limitation, statements regarding the Company’s intentions and expectations regarding the delivery schedule of aircraft on order, announced new service routes and customer savings programs. Forward-looking statements should not be read as a guarantee or assurance of future performance or results and will not necessarily be accurate indications of the times at, or by, which such performance or results will be achieved.  Forward-looking statements are based on information available at the time those statements are made and/or management’s good faith belief as of that time with respect to future events and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements. Forward-looking statements are subject to a number of factors that could cause the Company’s actual results to differ materially from the Company’s expectations, including the competitive environment in the airline industry; the Company’s ability to keep costs low; changes in fuel costs; the impact of worldwide economic conditions on customer travel behavior; the Company’s ability to generate non-ticket revenues; and government regulation. Additional information concerning these, and other factors is contained in the Company’s Securities and Exchange Commission filings. All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements set forth above. Forward-looking statements speak only as of the date of this release. You should not put undue reliance on any forward-looking statements. We assume no obligation to update forward-looking statements to reflect actual results, changes in assumptions or changes in other factors affecting forward-looking information, except to the extent required by applicable law. If we update one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect to those or other forward-looking statements.

Investor Relations Contact:

Maria Elena Rodríguez & Andrea González / Investor Relations /[email protected] +52 55 5261 6444

Media Contact:

Gabriela Fernández / [email protected] / +52 55 5246 0100

Controladora Vuela Compañía de Aviación, S.A.B. de C.V. and Subsidiaries

Financial and Operating Indicators

Unaudited

Three months

ended December

31, 2020

Three months

ended

December 31,

Three months

ended December

31, 2019

Variance

(In Mexican pesos, except otherwise indicated)

(US Dollars)*

2020

(%)

Total operating revenues (millions)

405

8,086

9,729

(16.9%)

Total operating expenses (millions)

357

7,126

7,762

(8.2%)

EBIT (millions)

48

960

1,967

(51.2%)

EBIT margin

11.9%

11.9%

20.2%

(8.3) pp

Depreciation and amortization

77

1,546

1,389

11.3%

Aircraft and engine variable lease expenses

25

507

193

>100%

Net income (millions)

45

897

1,287

(30.3%)

Net income margin

11.1%

11.1%

13.2%

(2.1) pp

Earnings per share:

Basic (pesos)

0.04

0.85

1.27

(32.9%)

Diluted (pesos)

0.04

0.85

1.27

(32.9%)

Earnings per ADS:

Basic (pesos)

0.43

8.54

12.72

(32.9%)

Diluted (pesos)

0.43

8.54

12.72

(32.9%)

Weighted average shares outstanding:

Basic

1,050,401,677

1,011,876,677

3.8%

Diluted

1,050,401,677

1,011,876,677

3.8%

Available seat miles (ASMs) (millions) (1)

5,979

6,300

(5.1%)

     Domestic

4,307

4,343

(0.8%)

     International

1,673

1,957

(14.5%)

Revenue passenger miles (RPMs) (millions) (1)

4,797

5,521

(13.1%)

     Domestic

3,594

3,888

(7.6%)

     International

1,203

1,633

(26.3%)

Load factor (2) 

80.2%

87.6%

(7.4) pp

     Domestic

83.5%

89.5%

(6.0) pp

     International

71.9%

83.5%

(11.6) pp

Total operating revenue per ASM (TRASM) (cents) (1) (5)  

6.9

138.1

155.0

(10.9%)

Total ancillary revenue per passenger (4) (5)

40.0

798

557

43.3%

Total operating revenue per passenger (5)

85.2

1,699

1,701

(0.1%)

Operating expenses per ASM (CASM) (cents) (1) (5)

6.04

120.6

123.5

(2.3%)

Operating expenses per ASM (CASM) (US cents) (1) (3) (5)

5.84

6.40

(8.7%)

CASM ex fuel (cents) (1) (5) 

4.27

85.3

76.0

12.2%

CASM ex fuel (US cents) (1) (3) (5)

4.13

3.94

4.8%

Booked passengers (thousands) (1)

4,861

5,738

(15.3%)

Departures (1)

31,652

35,261

(10.2%)

Block hours (1)

80,163

89,714

(10.6%)

Fuel gallons consumed (millions)

56.8

65.2

(13.0%)

Average economic fuel cost per gallon (5)

1.9

37.2

45.8

(18.8%)

Aircraft at end of period

86

82

4.9%

Average aircraft utilization (block hours)

11.8

12.8

(7.8%)

Average exchange rate

20.63

19.28

7.0%

End of period exchange rate

19.95

18.85

5.9%

*Peso amounts were converted to U.S. dollars at end of period exchange rate for convenience purposes only.

(1) Includes schedule and charter.                                                      (3) Dollar amounts were converted at average exchange rate of each period.

(2) Includes schedule.                                                                         (4) Includes “Other passenger revenues” and “Non-passenger revenues”.

(5) Excludes non-derivatives financial instruments.

 

 

Controladora Vuela Compañía de Aviación, S.A.B. de C.V. and Subsidiaries

Financial and Operating Indicators

Unaudited

Twelve months

ended December

31, 2020

Twelve months

ended

Twelve months

ended

Variance

(In Mexican pesos, except otherwise indicated)

(US Dollars)*

December 31,

2020

December 31,

2019

(%)

Total operating revenues (millions)

1,111

22,160

34,753

(36.2%)

Total operating expenses (millions)

1,274

25,413

30,397

(16.4%)

EBIT (millions)

(163)

(3,254)

4,355

NA

EBIT margin

(14.7%)

(14.7%)

12.5%

(27.2) pp

Depreciation and amortization

298

5,947

5,378

10.6%

Aircraft and engine variable lease expenses

93

1,845

962

91.9%

Net (loss) income (millions)

(215)

(4,294)

2,639

NA

Net (loss) income margin

(19.4%)

(19.4%)

7.6%

(27.0) pp

(Loss) income per share:

Basic (pesos)

(0.21)

(4.20)

2.61

NA

Diluted (pesos)

(0.21)

(4.20)

2.61

NA

(Loss) income per ADS:

Basic (pesos)

(2.11)

(42.03)

26.08

NA

Diluted (pesos)

(2.11)

(42.03)

26.08

NA

Weighted average shares outstanding:

Basic

1,021,560,557

1,011,876,677

1.0%

Diluted

1,021,560,557

1,011,876,677

1.0%

Available seat miles (ASMs) (millions) (1)

18,275

24,499

(25.4%)

     Domestic

13,446

16,891

(20.4%)

     International

4,829

7,607

(36.5%)

Revenue passenger miles (RPMs) (millions) (1)

14,597

21,032

(30.6%)

     Domestic

10,900

14,871

(26.7%)

     International

3,696

6,162

(40.0%)

Load factor (2) 

79.9%

85.9%

(6.0) pp

     Domestic

81.1%

88.0%

(6.9) pp

     International

76.6%

81.0%

(4.4) pp

Total operating revenue per ASM (TRASM) (cents) (1) (5)  

6.2

123.5

142.2

(13.1%)

Total ancillary revenue per passenger (4) (5)

33.0

659

532

23.9%

Total operating revenue per passenger (5)

76.9

1,534

1,585

(3.2%)

Operating expenses per ASM (CASM) (cents) (1) (5)

7.1

141.3

124.3

13.7%

Operating expenses per ASM (CASM) (US cents) (1) (3) (5)

6.6

6.5

1.9%

CASM ex fuel (cents) (1) (5) 

5.1

102.7

76.6

34.1%

CASM ex fuel (US cents) (1) (3) (5)

4.78

3.98

20.1%

Booked passengers (thousands) (1)

14,712

21,975

(33.1%)

Departures (1)

97,819

138,084

(29.2%)

Block hours (1)

248,952

350,572

(29.0%)

Fuel gallons consumed (millions)

176.6

251.8

(29.8%)

Average economic fuel cost per gallon (5)

2.0

39.9

46.4

(14.0%)

Aircraft at end of period

86

82

4.9%

Average aircraft utilization (block hours)

11.3

12.9

(12.7%)

Average exchange rate

21.50

19.26

11.6%

End of period exchange rate

19.95

18.85

5.9%

*Peso amounts were converted to U.S. dollars at end of period exchange rate for convenience purposes only.

(1) Includes schedule and charter.                                                                    (3) Dollar amounts were converted at average exchange rate of each period.

(2) Includes schedule.                                                                                       (4) Includes “Other passenger revenues” and “Non-passenger revenues”.

(5) Excludes non-derivatives financial instruments.

 

 

Controladora Vuela Compañía de Aviación, S.A.B. de C.V. and Subsidiaries

Consolidated Statement of Operations

Unaudited

 

Three months

ended December

31, 2020

Three months

ended

Three months

ended

Variance

(In millions of Mexican pesos)

(US Dollars) *

December 31,

2020

December 31,

 2019

(%)

Operating revenues:

Passenger revenues

394

7,863

9,414

(16.5%)

 Fare revenues

220

4,382

6,568

(33.3%)

 Other passenger revenues

174

3,481

2,846

22.3%

Non-passenger revenues

20

397

349

13.7%

 Other non-passenger revenues

16

327

285

14.8%

 Cargo

3

70

64

8.8%

 Non-derivatives financial instruments

(9)

(174)

(33)

>100%

Total operating revenues

405

8,086

9,729

(16.9%)

Other operating income

(8)

(162)

(63)

>100%

Fuel expense, net (1)

102

2,027

2,972

(31.8%)

Depreciation of right of use assets

65

1,297

1,181

9.8%

Landing, take-off and navigation expenses

58

1,148

1,384

(17.0%)

Sales, marketing and distribution expenses

17

335

409

(18.1%)

Salaries and benefits

49

983

953

3.2%

Aircraft and engine variable lease expenses

25

507

193

>100%

Maintenance expenses

23

454

360

26.0%

Other operating expenses

14

288

165

74.6%

Depreciation and amortization

12

249

208

19.7%

Operating expenses

357

7,126

7,762

(8.2%)

Operating income

48

960

1,967

(51.2%)

Finance income

8

36

(76.8%)

Finance cost

(33)

(654)

(656)

(0.4%)

Exchange gain, net

53

1,048

456

>100.0%

Comprehensive financing result

20

403

(164)

NA

Income before income tax

68

1,362

1,803

(24.4%)

Income tax expense

(23)

(465)

(516)

(9.7%)

Net income

45

897

1,287

(30.3%)

* Peso amounts were converted to U.S. dollars at end of period exchange rate for convenience purposes only.

(1) 4Q 2020 and 4Q 2019 figures include a benefit from non-derivatives financial instruments by an amount of Ps.84.2 million and Ps.16.7 million,

respectively.

 

 

Controladora Vuela Compañía de Aviación, S.A.B. de C.V. and Subsidiaries

Consolidated Statement of Operations

Unaudited

Twelve months

ended December 31,

2020

Twelve

months

ended

Twelve

months

ended

Variance

(In millions of Mexican pesos)

(US Dollars) *

December 31,

2020

December 31,

 2019

(%)

Operating revenues:

Passenger revenues

1,077

21,487

33,699

(36.2%)

 Fare revenues

645

12,873

23,130

(44.3%)

 Other passenger revenues

432

8,613

10,569

(18.5%)

Non-passenger revenues

54

1,084

1,126

(3.7%)

 Other non-passenger revenues

44

882

898

(1.7%)

 Cargo

10

202

229

(11.8%)

 Non-derivatives financial instruments

(21)

(411)

(73)

>100%

Total operating revenues

1,111

22,160

34,753

(36.2%)

Other operating income

(37)

(730)

(327)

>100%

Fuel expense, net (1)

333

6,641

11,626

(42.9%)

Depreciation of right of use assets

253

5,049

4,703

7.4%

Landing, take-off and navigation expenses

205

4,091

5,108

(19.9%)

Salaries and benefits

173

3,453

3,601

(4.1%)

Sales, marketing and distribution expenses

92

1,841

1,448

27.2%

Aircraft and engine variable lease expenses

93

1,845

962

91.9%

Maintenance expenses

59

1,168

1,488

(21.5%)

Other operating expenses

58

1,157

1,113

4.0%

Depreciation and amortization

45

898

676

33.0%

Operating expenses

1,274

25,413

30,397

(16.4%)

Operating (loss) income

(163)

(3,254)

4,355

NA

Finance income

5

102

208

(51.1%)

Finance cost (2)

(159)

(3,177)

(2,270)

40.0%

Exchange gain, net

32

629

1,441

(56.3%)

Comprehensive financing result

(123)

(2,446)

(622)

>100%

(Loss) income before income tax

(286)

(5,700)

3,734

NA

Income tax benefit (expense)

70

1,406

(1,095)

NA

Net (loss) income

(215)

(4,294)

2,639

NA

* Peso amounts were converted to U.S. dollars at end of period exchange rate for convenience purposes only.

(1) 4Q YTD 2020 and 4Q YTD 2019 figures include a benefit from non-derivatives financial instruments by an amount of Ps.409.2 million and Ps.57.0

million, respectively.

(2) During fourth quarter 2020, as a result of the capacity reduction due to COVID-19, the Company recorded the ineffective portion related to the

derivative financial instruments by an amount of Ps.448.6 million, which is presented as part of the financial costs.

 

 

Controladora Vuela Compañía de Aviación, S.A.B. de C.V. and Subsidiaries

Reconciliation of total ancillary revenue per passenger

The following table shows quarterly additional detail about the components of total ancillary revenue:

Unaudited

Three months

ended

December 31,

2020

(US Dollars)*

Three months

ended

December 31,

2020

Three months

ended

December 31,

2019

Variance

(%)

(In millions of Mexican pesos)

Other passenger revenues

174

3,481

2,846

22.3%

Non-passenger revenues

20

397

349

13.7%

Total ancillary revenues

194

3,877

3,195

21.4%

Booked passengers (thousands)

4,861

5,738

(15.3%)

Total ancillary revenue per passenger

40

798

557

43.3%

* Peso amounts were converted to U.S. dollars at end of period exchange rate for convenience purposes only.

 

 

The following table shows the December YTD additional detail about the components of total ancillary revenue:

Unaudited

Twelve months

ended

December 31,

2020

(US Dollars)*

Twelve months

ended

December 31,

2020

Twelve months

ended

December 31,

2019

Variance

(%)

(In millions of Mexican pesos)

Other passenger revenues

432

8,613

10,569

(18.5%)

Non-passenger revenues

54

1,084

1,126

(3.7%)

Total ancillary revenues

486

9,698

11,696

(17.1%)

Booked passengers (thousands)

14,712

21,975

(33.1%)

Total ancillary revenue per passenger

33

659

532

23.9%

* Peso amounts were converted to U.S. dollars at end of period exchange rate for convenience purposes only.

 

 

Controladora Vuela Compañía de Aviación, S.A.B. de C.V. and Subsidiaries

Consolidated Statement of Financial Position

(In millions of Mexican pesos)

December 31, 2020

Unaudited

December 31, 2020

Unaudited

December 31, 2019

Audited

(US Dollars)*

Assets

Cash and cash equivalents

506

10,103

7,980

Accounts receivable

121

2,417

2,320

Inventories

14

279

302

Prepaid expenses and other current assets

25

492

781

Financial instruments

134

Guarantee deposits

57

1,142

600

Total current assets

724

14,434

12,117

Rotable spare parts, furniture and equipment, net

365

7,281

7,385

Right of use assets

1,720

34,316

34,129

Intangible assets, net

10

192

167

Financial instruments

3

Deferred income taxes

157

3,129

1,543

Guarantee deposits

422

8,425

7,644

Other assets

6

119

166

Other long- term assets

16

325

141

Total non-current assets

2,696

53,787

51,178

Total assets

3,420

68,221

63,295

Liabilities

Unearned transportation revenue

293

5,851

3,680

Accounts payable

120

2,396

1,656

Accrued liabilities

117

2,333

2,532

Lease liabilities

342

6,828

4,721

Other taxes and fees payable

112

2,236

2,102

Income taxes payable

4

141

Financial instruments

10

Financial debt

79

1,566

2,086

Other liabilities

5

101

407

Total short-term liabilities

1,069

21,326

17,324

Financial debt

190

3,789

2,890

Accrued liabilities

3

67

91

Lease liabilities

1,871

37,325

35,797

Other liabilities

134

2,668

1,470

Employee benefits

3

51

38

Deferred income taxes

10

200

156

Total long-term liabilities

2,211

44,099

40,441

Total liabilities

3,280

65,424

57,765

Equity

Capital stock

172

3,426

2,974

Treasury shares

(11)

(224)

(170)

Contributions for future capital increases

Legal reserve

15

291

291

Additional paid-in capital

237

4,721

1,880

Retained (losses) earnings

(193)

(3,855)

438

Accumulated other comprehensive income (losses) (1)

(78)

(1,562)

116

Total equity

140

2,796

5,530

Total liabilities and equity

3,420

68,221

63,295

Total shares outstanding fully diluted

1,165,976,677

1,011,876,677

* Peso amounts were converted to U.S. dollars at end of period exchange rate for convenience purposes only.

(1) As of December 31, 2020 and as of December 31, 2019 the figures include a negative foreign exchange effect of Ps.1,577 million and a positive

foreign exchange effect of Ps.14 million, respectively, related to non-derivatives financial instruments. 

 

 

Controladora Vuela Compañía de Aviación, S.A.B. de C.V. and Subsidiaries

Consolidated Statement of Cash Flows – Cash Flow Data Summary

Unaudited

Three months

ended December

31, 2020

Three months

 ended December

31, 2020

Three months

ended December

31, 2019

(In millions of Mexican pesos)

(US Dollars)*

Net cash flow generated by operating activities

78

1,551

2,268

Net cash flow generated by (used in) investing activities

4

77

(823)

Net cash flow generated by (used in) financing activities**

44

883

(1,000)

Increase in cash and cash equivalents

126

2,511

445

Net foreign exchange differences

(31)

(609)

(275)

Cash and cash equivalents at beginning of period

411

8,202

7,810

Cash and cash equivalents at end of period

506

10,103

7,980

* Peso amounts were converted to U.S. dollars at end of period exchange rate for convenience purposes only.

**Includes aircraft rental payments of Ps.2,242 million and Ps.1,713 million for the three months ended period December 31, 2020 and 2019,

respectively.

Unaudited

Twelve months

ended December

31, 2020

Twelve months

ended December

31, 2020

Twelve months

ended December

31, 2019

(In millions of Mexican pesos)

(US Dollars)*

Net cash flow generated by operating activities

243

4,840

9,510

Net cash flow used in investing activities

(3)

(68)

(1,879)

Net cash flow used in financing activities**

(177)

(3,522)

(5,239)

Increase in cash and cash equivalents

63

1,251

2,391

Net foreign exchange differences

44

873

(274)

Cash and cash equivalents at beginning of period

400

7,980

5,863

Cash and cash equivalents at end of period

506

10,103

7,980

* Peso amounts were converted to U.S. dollars at end of period exchange rate for convenience purposes only.

**Includes aircraft rental payments of Ps.6,591 million and Ps.6,500 million for the twelve months ended period December 31, 2020 and 2019,

respectively.

 

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SOURCE Volaris