MEXICO CITY—(BUSINESS WIRE)—Volaris* (NYSE:VLRS and BMV:VOLAR), the ultra-low-cost airline serving Mexico, the United States and Central America, today announced its financial results for the second quarter 2015.

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

Second Quarter 2015 Highlights

Total operating revenues were Ps.4,099 million for the second quarter, an increase of 23.9% year over year.
Non-ticket revenues increased 48.3% for the second quarter year over year to Ps.977 million. Non-ticket revenue per passenger increased 23.2% to Ps.339 for the second quarter.
Total operating revenue per available seat mile (TRASM) rose to Ps.123.0 cents for the second quarter, an increase of 8.7% year over year.
Operating expenses per available seat mile (CASM) decreased 3.3% for the second quarter year over year to Ps.112.5 cents.
Adjusted EBITDAR for the second quarter was Ps.1,281 million, an increase of 115.3% year over year with an Adjusted EBITDAR margin of 31.2%, a margin expansion of 13.2 percentage points.
Operating income reached Ps.349 million with an operating margin of 8.5% for the second quarter, a year over year operating margin improvement of 11.4 percentage points.
Net income was Ps.351 million (Ps.0.35 per share / US$0.22 per ADS) with a net margin of 8.6% for the second quarter, a year over year net margin improvement of 10.9 percentage points.
During the second quarter the net increase of cash and cash equivalents was Ps.872 million mainly driven by cash flow from operating activities of Ps.947 million. Unrestricted cash and cash equivalents was Ps.4,028 million, representing 25.5% of the last twelve month total operating revenues.
Volaris´ CEO Enrique Beltranena commented: “During the second quarter we continued to see improving market dynamics driven by solid demand and growing customer acceptance of the Volaris ULCC model. We continue to drive our growth through an expanding international presence while maintaining cost discipline and executing our business plan that is focused on generating shareholder value.”

Improving Although Still Volatile Macroeconomic Environment

The Mexican macroeconomic environment:
GDP growth for the first quarter 2015 of 2.5% year over year.
Consumer confidence increased 1.2%, 1.4% and 4.1% year over year in April, May and June of 2015, respectively.
The Mexican General Economic Activity Indicator (IGAE) increased 1.5% year over year in May of 2015.
Exchange rate volatility: The Mexican peso depreciated 17.7% year over year against the US dollar, as the exchange rate devalued from an average of Ps.13.00 pesos per US dollar in the second quarter 2014 to Ps.15.31 pesos per US dollar during the second quarter 2015.
Lower fuel prices: The average economic fuel cost per gallon decreased 21.3% year over year in the second quarter 2015 to Ps.31.01 per gallon.
Air traffic volume increase: The Mexican DGAC reported an overall passenger volume growth for Mexican carriers of 13.6% from January to May 2015 year over year.
Focus on Non-Ticket Revenue Growth and Revenue Management Results in Unit Revenue Improvement

Unit revenue improvement and capacity management: TRASM and yield increased 8.7% and 1.7% for the second quarter year over year, respectively, as a result of a stable domestic and international fare environment. Domestic capacity grew 7.3%, reflecting increasing market demand and supporting yield recovery, while international capacity increased 34.6%.
Non-ticket revenues growth: Non-ticket revenues per passenger increased 23.2% year over year for the second quarter as the company refined the ancillary combos, implemented new commission based products in the booking flow and introduced new a la carte products. In addition, performance of the cobranded credit card improved.
New routes launch: In the second quarter, Volaris launched seven new routes (three domestic and four international).
Second Quarter Operating Revenues: Directed Growth while Managing Capacity for Profitability Delivers Solid Traffic and Revenue Results

Volaris booked 2.9 million passengers in the second quarter of 2015, a 20.4% year over year growth rate. Volaris traffic (measured in terms of revenue passenger miles, or RPMs) increased 15.8%. Volaris’ passenger market share among Mexican carriers was 23.4% in both domestic and international markets, the second largest share.

Volaris’ total operating revenues were Ps.4,099 million in the second quarter, an increase of 23.9% year over year. Non-ticket revenue and non-ticket revenue per passenger reached Ps.977 million and Ps.339, respectively.

Maintaining Cost Discipline: Fuel Savings Combined With Other Efficiencies Offset Exchange Rate Pressures

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

Despite these challenges, the CASM for the second quarter was Ps.112.5 cents, a 3.3% decrease compared to the second quarter 2014, mainly driven by lower fuel prices and efficiencies achieved in landing, take-off and navigation expenses and in salaries and benefits. On a US dollar basis, CASM in the second quarter decreased 19.1% compared to the same period in 2014.

Young and Fuel Efficient Fleet

As of June 30, 2015, the Company´s fleet was comprised of 53 aircraft (33 A320s, 18 A319s and 2 A321s), with an average age of 4.3 years. Volaris expects to end 2015 with 55 aircraft.

Strong Cash Flow Generation, Solid Balance Sheet and Good Liquidity

The net increase of cash and cash equivalents was Ps.872 million during the second quarter, mainly driven by the resources provided by operating activities of Ps.947 million.

As of June 30, 2015, Volaris had a record balance of Ps.4,028 million in unrestricted cash and cash equivalents, representing 25.5% of the last twelve month operating revenues. Volaris recorded negative net debt (or a positive net cash position) of Ps.2,570 million and total equity of Ps.5,214 million.

During the second quarter, Volaris incurred capital expenditures of Ps.281 million, which included pre-delivery payments for acquisition of aircraft of Ps.316 million and rotable spare parts, furniture and equipment and intangibles assets of Ps.127 million. These acquisitions were partially offset by reimbursments of aircraft pre-delivery payments of Ps.131 million, and proceeds from disposals of rotable spare parts, furniture and equipment of Ps.31 million.

Active in Fuel Risk Management

Volaris has continued to remain active in its fuel risk management program. Volaris hedged 44% of its second quarter fuel consumption at an average strike price of US $2.15 per gallon, which combined with the 56% unhedged consumption, resulted in a blended average economic fuel cost of US$1.99 per gallon for the quarter.