Volaris Reports August 2024 Traffic Results: 87% Load Factor
Rhea-AI Summary
Volaris, a leading ultra-low-cost carrier, reported its August 2024 traffic results. The company experienced a 15.1% decrease in ASM capacity year-over-year due to accelerated Pratt & Whitney engine inspections and resulting aircraft groundings. Despite these challenges, Volaris transported 2.6 million passengers with a load factor of 87.0%, flat against last year's levels.
Key highlights include:
- RPMs decreased by 15.3%, with domestic RPMs down 22.0% and international RPMs flat
- Mexican domestic ASMs decreased by 22.5%, while international ASMs remained stable
- The company reaffirmed its annual capacity guidance, indicating an approximate 14% reduction
- Volaris concluded the summer high season with strong operational performance and demand
CEO Enrique Beltranena stated that the strategic fleet mitigation plan is on track and delivering favorable outcomes, despite having almost 30% of the fleet grounded.
Positive
- Maintained a high load factor of 87.0% despite capacity reductions
- Strong demand and operational performance during the summer high season
- Strategic fleet mitigation plan delivering favorable outcomes
- International RPMs and ASMs remained relatively stable
Negative
- 15.1% decrease in ASM capacity year-over-year
- 15.3% decrease in total RPMs
- 22.0% decrease in domestic RPMs
- 15.3% decrease in total passengers transported
- Almost 30% of the fleet grounded due to engine inspections
- Reaffirmed annual capacity guidance indicating a 14% reduction
Insights
The August 2024 traffic results for Volaris reveal significant challenges and strategic adaptations. The 15.1% decrease in ASM capacity due to Pratt & Whitney engine inspections is a major operational hurdle. However, maintaining an 87% load factor, on par with last year, demonstrates resilient demand and effective capacity management.
The 22% drop in domestic RPMs versus a flat international performance suggests a disproportionate impact on domestic routes. This could lead to market share shifts in the Mexican domestic market. The company's ability to maintain its annual capacity guidance despite having 30% of its fleet grounded is impressive, indicating strong operational flexibility.
Investors should monitor the long-term impact of these engine issues on fleet expansion plans and cost structures. The solid performance during the high season, despite challenges, suggests robust underlying demand, which could position Volaris well for recovery once fleet issues are resolved.
Volaris' traffic results present a mixed financial outlook. The 15.3% decrease in total passengers will likely translate to reduced revenue for the period. However, the maintenance of high load factors suggests effective yield management, potentially mitigating some revenue loss.
The disparity between domestic (
Investors should focus on the company's cost control measures during this period of reduced capacity. The ability to manage costs while maintaining operational efficiency will be important for preserving margins. Additionally, the long-term financial implications of the accelerated engine inspections, including potential compensation from Pratt & Whitney, should be closely monitored.
MEXICO CITY, Sept. 04, 2024 (GLOBE NEWSWIRE) -- Controladora Vuela Compañía de Aviación, S.A.B. de C.V. (NYSE: VLRS and BMV: VOLAR) (“Volaris” or “the Company”), the ultra-low-cost carrier (ULCC) serving Mexico, the United States, Central, and South America, reports its August 2024 preliminary traffic results.
In August 2024, Volaris' ASM capacity decreased by
Enrique Beltranena, Volaris’ President and CEO said: "Our strategic fleet mitigation plan is on track and continues to deliver favorable outcomes. We have met our goals since the engine inspections began, and we are managing the situation with almost
| August 2024 | August 2023 | Variance | YTD August 2024 | YTD August 2023 | Variance | |||||||
| RPMs (million, scheduled & charter) | ||||||||||||
| Domestic | 1,635 | 2,097 | -22.0 | % | 12,009 | 15,360 | -21.8 | % | ||||
| International | 966 | 972 | -0.6 | % | 7,417 | 7,222 | 2.7 | % | ||||
| Total | 2,601 | 3,069 | -15.3 | % | 19,426 | 22,582 | -14.0 | % | ||||
| ASMs (million, scheduled & charter) | ||||||||||||
| Domestic | 1,820 | 2,348 | -22.5 | % | 13,275 | 17,851 | -25.6 | % | ||||
| International | 1,168 | 1,173 | -0.4 | % | 9,101 | 8,558 | 6.3 | % | ||||
| Total | 2,989 | 3,521 | -15.1 | % | 22,376 | 26,409 | -15.3 | % | ||||
| Load Factor (%, RPMs/ASMs) | ||||||||||||
| Domestic | 89.8 | % | 89.3 | % | 0.5 pp | 90.5 | % | 86.0 | % | 4.4 pp | ||
| International | 82.7 | % | 82.9 | % | (0.2) pp | 81.5 | % | 84.4 | % | (2.9) pp | ||
| Total | 87.0 | % | 87.2 | % | (0.1) pp | 86.8 | % | 85.5 | % | 1.3 pp | ||
| Passengers (thousand, scheduled & charter) | ||||||||||||
| Domestic | 1,958 | 2,418 | -19.0 | % | 14,246 | 17,732 | -19.7 | % | ||||
| International | 651 | 662 | -1.6 | % | 5,058 | 4,968 | 1.8 | % | ||||
| Total | 2,609 | 3,080 | -15.3 | % | 19,304 | 22,701 | -15.0 | % | ||||
The information included in this report has not been audited and does not provide information on the Company’s future performance. Volaris’ future performance depends on several factors. It cannot be inferred that any period’s performance or its comparison year-over-year will indicate a similar performance in the future. Figures are rounded for convenience purposes.
Glossary
Revenue passenger miles (RPMs): Number of seats booked by passengers multiplied by the number of miles flown.
Available seat miles (ASMs): Number of seats available for passengers multiplied by the number of miles flown.
Load factor: RPMs divided by ASMs and expressed as a percentage.
Passengers: The total number of passengers booked on all flight segments.
Investor Relations Contact
Ricardo Martínez / ir@volaris.com
Media Contact
Israel Álvarez / ialvarez@gcya.net
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, Central, and South 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 5 to more than 214 and its fleet from 4 to 137 aircraft. Volaris offers more than 500 daily flight segments on routes that connect 44 cities in Mexico and 29 cities in the United States, Central, and South America, with one of the youngest fleets in Mexico. Volaris targets passengers who are visiting friends and relatives, cost-conscious business and leisure travelers in Mexico, the United States, Central, and South America. Volaris has received the ESR Award for Social Corporate Responsibility for fifteen consecutive years. For more information, please visit ir.volaris.com. Volaris routinely posts information that may be important to investors on its investor relations website. The Company encourages investors and potential investors to consult the Volaris website regularly for important information about Volaris.
FAQ
What was Volaris' load factor in August 2024?
How many passengers did Volaris transport in August 2024?
What caused the decrease in Volaris' ASM capacity in August 2024?
How did Volaris' domestic and international RPMs perform in August 2024?
What is Volaris' annual capacity guidance for 2024?
