MEXICO CITY, April 22, 2015 /PRNewswire/ — Volaris* (NYSE: VLRS and BMV: VOLAR), the ultra-low-cost airline serving Mexico and the United States, today announced its financial results for the first quarter 2015.

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

First Quarter 2015 Highlights

Total operating revenues were Ps.3,768 million for the first quarter, an increase of 35.8% year over year.
Non-ticket revenues increased 64.6% for the first quarter year over year. Non-ticket revenue per passenger increased 41.6%, reaching Ps.337 (US$22) for the first quarter.
Total operating revenue per available seat mile (TRASM) increased to Ps.123.8 cents for the first quarter, an increase of 22.4% year over year.
Operating expenses per available seat mile (CASM) decreased 5.5% for the first quarter year over year to Ps.112.5 cents (US$7.4 cents). CASM expressed in US cents decreased 18.4% for the first quarter year over year.
Adjusted EBITDAR for the first quarter was Ps.1,204 million, a Ps.1 billion increase year over year with an Adjusted EBITDAR margin of 32.0%, a margin increase of 26.1 percentage points.
EBIT reached Ps.346 million with an operating margin of 9.2% for the first quarter, a margin improvement of 26.8 percentage points.
Net income was Ps.306 million (Ps.0.30 per share / US$0.20 per ADS) with a net margin of 8.1% for the first quarter, a net margin improvement of 21.4 percentage points.
During the first quarter the net increase of cash and cash equivalents was Ps.862 million mainly driven by the resources provided by operating activities of Ps.949 million. Unrestricted cash and cash equivalents was Ps.3,156 million (US$208 million), representing 21% of the last twelve month total revenues.
Volaris´ CEO Enrique Beltranena commented: “Volaris’ strong performance for the first three months of 2015 are evidence of the hard work and excellent execution to improve financial performance following a very challenging year. We continue to diversify our network and strengthen our unbundled product strategy, increasing our international presence and growing non-ticket revenues while maintaining cost discipline. We are committed to continue building solid foundations towards a strong and profitable 2015”.

Improving Macroeconomic Environment

The Mexican macroeconomic environment:
GDP growth for the full year 2014 was 2.1%.
Consumer confidence increased 7.8%, 6.8% and 4.8% year over year in January, February and March of 2015, respectively.
The Mexican General Economic Activity Indicator (IGAE) increased 2.0% year over year in January of 2015.
Exchange rate volatility: The Mexican peso depreciated 12.8% year over year against the US dollar, as the exchange rate devalued from an average of Ps.13.23 pesos per US dollar in the first quarter of 2014 to Ps.14.93 pesos per US dollar during the first quarter of 2015.
Lower fuel prices: The average economic fuel cost per gallon decreased 27.1% year over year in the first quarter of 2015, reaching Ps.29.7 (US$1.96) per gallon.
Focus on Network Diversification and Revenue Management Results in Unit Revenue Improvement

Unit revenue improvement and capacity management: TRASM and yield increased 22.4% and 17.5% for the first quarter year over year, respectively, as a result of a recuperating domestic fare environment and solid international fare environment. Domestic capacity increased 4.0%, reflecting capacity discipline and supporting yield recovery, while international capacity increased 31.4%.
Non-ticket revenues growth: Non-ticket revenues per passenger increased 41.6% year over year for the first quarter as Volaris continues to observe a customer acceptance of its ancillary revenue strategy. This growth is mainly driven by improved ancillary bundles and revenue management of bag and seat fees, as well as new product offerings.
Air traffic volume increase: The Mexican DGAC reported an overall passenger increase for Mexican carriers of 9.2% for January and February 2015. Volaris’ market share among Mexican carriers increased to 23.9% in both domestic and international markets, the second largest share among them.
New routes launch: In the first quarter, Volaris opened five routes (four domestic and one international), focusing on its VFR customer base, both in the domestic and the Mexico-US cross-border market.
First Quarter Operating Revenues: Managing Capacity for Profitability Results in Solid Traffic and Revenue Indicators

Volaris booked 2.5 million passengers in the first quarter 2015, a 16.2% year over year growth rate. Volaris traffic (measured in terms of revenue passenger miles, or RPMs) increased 10.0%.

Volaris’ total operating revenues were Ps.3,768 million in the first quarter, an increase of 35.8% year over year. Non-ticket revenues and non-ticket revenue per passenger reached Ps.846 million and Ps.337 (US$22), respectively. Non-ticket revenues per passenger increased 41.6%.

Maintaining Cost Discipline: Fuel Savings Combined With Other Efficiencies

CASM for the first quarter 2015 was Ps.112.5 cents (US$7.4 cents), a 5.5% decrease compared to the first quarter of 2014, mainly driven by a lower fuel price per gallon and efficiencies achieved in landing, take-off and navigation expenses, salaries and benefits. On a US dollar basis, CASM in the first quarter decreased 18.4% compared to the same period in 2014.

In the first quarter, Volaris experienced pressures in US-dollar denominated costs such as aircraft rents, international airport costs, and maintenance expenses due to the exchange rate depreciation of the Mexican peso.

Young and Fuel Efficient Fleet

As of March 31, 2015, the Company´s fleet was comprised of 51 aircraft (33 A320s and 18 A319s), with an average age of 4.5 years. Volaris expects to end 2015 with 55 aircraft, including our first two A321s which will be entering the fleet during the second quarter of the year.

Positive Cash Flow Generation, Strong Balance Sheet and Good Liquidity

During the first quarter the net increase of cash and cash equivalents was Ps.862 million mainly driven by the resources provided by operating activities of Ps.949 million.

As of March 31, 2015, Volaris had a record balance of Ps.3,156 million in unrestricted cash and cash equivalents, representing 21% of the last twelve month operating revenues. Volaris recorded negative net debt (or a positive net cash position) of Ps.1,900 million and total equity reached Ps.4,806 million.

During the first quarter of 2015, Volaris incurred capital expenditures of Ps.50 million, which included acquisitions of rotable spare parts, furniture and equipment of Ps.61 million, partially offset by reimbursements of net pre-delivery payments of Ps.11 million.

Active in Fuel Risk Management

Volaris has continued to remain active in its fuel risk management program with a combination of financial instruments including Jet Fuel swaps and purchase of call options. In the first quarter Volaris hedged 29% of fuel consumption at an average price of US$2.53 per gallon, which combined with the 71% unhedged consumption, resulted in a blended average economic fuel cost of US$1.96 per gallon for the quarter.