Volaris Reports First Quarter 2018 Results: Ancillary Revenue Expansion, Unit Cost Reduction and Cash Flow Generation

April 20, 2018

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 first quarter 2018.

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

First Quarter 2018 Highlights

  • Total operating revenues reached Ps.5,850 million for the first quarter, an increase of 2.7% year over year.
  • Total ancillary revenues were Ps.1,965 million for the first quarter, an increase of 17.4% year over year. The total ancillary revenues per passenger for the first quarter were Ps.461, increasing 9.1% year over year.
  • Total operating revenues per available seat mile (TRASM) were Ps.115.7 cents for the first quarter, a decrease of 7.7% year over year.
  • Operating expenses per available seat mile (CASM) were Ps.133.7 cents for the first quarter, a decrease of 5.4% year over year; with an average economic fuel cost per gallon of Ps. 40.1, increasing 8.0% year over year, and an average exchange rate of Ps.18.76, a year over year decrease of 8.0%. Operating expenses per available seat mile excluding fuel (CASM ex fuel) were Ps. 90.6 cents for the first quarter, a decrease of 9.1% year over year.
  • Net loss was Ps.1,118 million (Ps.1.11 per share / US$0.60 per ADS) for the first quarter, with a net loss margin of 19.1%.
  • Net cash flow provided by operating activities was Ps.1,093 million, in conjunction with cash flow used in investing activities of Ps.313 million, net cash flow provided by financing activities of Ps. 65 million, and a negative net foreign exchange differences of Ps.478 million, the net cash generation in the first quarter was Ps.366 million. As of March 31, 2018, cash and cash equivalents were Ps.7,317 million.

Volaris´ CEO Enrique Beltranena commented: “During the first quarter, we faced a challenging fare environment in the domestic market, influenced by a significant capacity increase in the industry. Having the lowest unit cost, is the most important competitive advantage in this environment; our ultra-low-cost model has produced lower unit cost year over year. Additionally, our ancillary revenue performance has been successful”.

Resilient Macroeconomics and Exchange Rate Appreciation Partially Offset Fuel Price Pressures

  • Resilient macroeconomics and domestic consumer demand: The macroeconomic indicators in Mexico during the quarter were stable, with same store sales1 increasing 4.1% year over year; remittances2 increased 7.2% year over year during first two months of the year; and the Mexican General Economic Activity Indicator (IGAE) 3 increasing 1.1% year over year in January of 2018.
  • Air traffic volume increase: The Mexican DGAC reported overall passenger volume growth for Mexican carriers of 10.2% year over year in January and February; domestic overall passenger volume increased 8.1%, while international overall passenger volume increased 17.1%.
  • Exchange rate volatility: The Mexican peso appreciated 8.0% year over year against the US dollar, from an average exchange rate of Ps.20.39 pesos per US dollar in the first quarter 2017 to Ps.18.76 pesos per US dollar during the first quarter 2018. At the end of the first quarter, the Mexican peso appreciated 7.1% with respect to the end of period exchange rate of the previous quarter. The Company booked a foreign exchange loss of Ps.691 million as a consequence of our US dollar net monetary asset position.
  • Higher fuel prices: The average economic fuel cost per gallon increased 8.0%, year over year, to Ps.40.1 per gallon (US$2.2) in the first quarter 2018, year over year.

Strengthened ULCC Model with Further Ancillary Revenue Expansion

  • Passenger traffic stimulation: Volaris booked 4.3 million passengers in the first quarter of 2018, up 7.5% year over year. Volaris traffic (measured in terms of fare revenue miles, or RPMs) increased 9.8% for the same period. System load factor during the quarter decreased 1.0 percentage points year over year to 82.2%.
  • Challenged fare environment: For the first quarter of 2018, yield decreased 12.1% with TRASM decreasing 7.7%, year over year. During the first quarter, in terms of ASMs, domestic capacity grew 11.9%, while international capacity increased 9.7%.
  • Total ancillary revenue growth: Total ancillary revenues and total ancillary revenues per passenger increased 17.4% and 9.1% year over year for the first quarter of 2018, respectively. The total ancillary revenues generation continues to grow with new and matured products, appealing to customers’ needs, representing now 34% of the total operating revenues.
  • New routes: In the first quarter 2018, Volaris began operations in three new international routes between: 1) Guatemala City, Guatemala and Los Angeles, California; 2) San Salvador, El Salvador and Los Angeles, California; and 3) San Salvador, El Salvador and Cancun, Quintana Roo.

Cost Control and Discipline, Despite Fuel Price Pressure

  • CASM and CASM ex fuel for first quarter 2018 were Ps. 133.7 (US$7.1 cents) and Ps.90.6 cents (US$4.8 cents), respectively. These represented decreases of 5.4% and 9.1%, respectively; mainly driven by tightening cost controls and average exchange rate appreciation of 8.0%. At the end of the first quarter, the Mexican peso also appreciated 7.1% with respect to the end of previous quarter, leading to a net exchange rate loss of Ps.691 million as result of our U.S. dollar net monetary asset position.

Young and Fuel-efficient Fleet

  • During the first quarter 2018, the Company did not incorporate any additional aircraft and one aircraft was redelivered in February. As of March 31, 2018, Volaris fleet was composed of 70 aircraft (11 A319s, 49 A320s and 10 A321s), with an average age of 4.8 years. At the end of the first quarter 2018, Volaris’ fleet had an average of 181 seats, 67% of which were in sharklet-equipped aircraft.
  • On April 17th, we received our first A321 neo, this aircraft with 230 seats will continue to enhance our network in Mexico City and will further reduce unit costs.

Solid Balance Sheet, Good Liquidity and Cash Flow Generation

  • Net cash flow provided by operating activities was Ps.1,093 million, in conjunction with cash flow used in investing activities of Ps.313 million, net cash flow provided by financing activities of Ps. 65 million, and a negative net foreign exchange differences of Ps.478 million, the net cash generation in the first quarter was Ps.366 million. As of March 31, 2018, cash and cash equivalents were Ps.7,317 million, representing now 29% of last twelve months operating revenues. As of December 31, 2017, unrestricted cash and cash equivalents were Ps.6,951 million. Volaris registered negative net debt (or a positive net cash position) of Ps.3,894 million and total equity of Ps.8,950 million.

Active in Risk Management

  • Volaris remains active in its fuel risk management program. Volaris utilized call options to hedge 63% of its first quarter 2018 fuel consumption, at an average strike price of US $1.63 per gallon, which combined with the 37% unhedged consumption, resulted in a blended average economic fuel cost of US$2.2 per gallon.

IFRS 15: Revenue from Contracts with Customers

  • During 1Q 2018, we adopted IFRS 15 “Revenue from Contracts with Customers” which replaces existing revenue recognition guidance, including IAS 18 “Revenue”. IFRS 15 establishes a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers.
  • The adoption of the IFRS 15 impacted the classification and timing of recognition of certain ancillary items such as bags, advanced seat selection, itinerary changes and other air travel-related fees, since they are deemed part of the single performance obligation of providing passenger transportation. These ancillary items are now recognized in passenger revenue (disclosed in the consolidated statement of operations including in this quarterly earnings release as “other passenger revenue”).
  • Non-passenger revenue primarily consists of revenue from the sale of other items such as rental cars, insurance, hotels and cargo. This change did not have a material impact on our income statement or balance sheet in any period presented.
  • This quarterly earnings release includes supplemental information for comparable basis, with recast amounts with the IFRS 15 adoption effects, and were derived from unaudited financial statements included in the quarterly reports on Form 6-K during the year ended December 31, 2017.

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

Conference Call/Webcast Details:

Presenters for the Company:

 

 

Date:

       

Mr. Enrique Beltranena, CEO

Mr. Fernando Suárez, EVP & CFO

 

Friday, April 20, 2018

   
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): 00-1-800-514-6145
Brazil dial in (toll free): 0800-891-6744
International dial in: +1-785-424-1726
Participant passcode: VOLARIS (8652747)
Webcast will be available at:

https://www.webcaster4.com/Webcast/Page/1174/25222

 

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 beginning operations in March 2006, Volaris has increased its routes from five to more than 167 and its fleet from four to 70 aircraft. Volaris offers more than 319 daily flight segments on routes that connect 40 cities in Mexico and 27 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 people and leisure travelers in Mexico and to select destinations in the United States and Central America. Volaris has received the ESR Award for Social Corporate Responsibility for eight 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 or beliefs concerning future events. When used in this release, the words "expects," "estimates," "plans," "anticipates," "indicates," "believes," "forecast," "guidance," "outlook," "may," "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. All forward-looking statements in this release are based upon information available to the Company on the date of this release. The Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise. 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.

   

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

Financial and Operating Indicators

                     
Unaudited

Three months
ended March 31,
2018

Three months
ended March 31,
2018

Three months
ended March 31,
2017
(Adjusted)

 

Variance

(In Mexican pesos, except otherwise indicated) (US Dollars)* (%)
Total operating revenues (millions) 319 5,850 5,699 2.7 %
Total operating expenses (millions) 368 6,757 6,428 5.1 %
EBIT (millions) (49 ) (906 ) (729 ) 24.3 %
EBIT margin (15.5 %) (15.5 %) (12.8 %) (2.7 ) pp
Depreciation and amortization 7 132 128 3.1 %
Aircraft and engine rent expense 87 1,596 1,699 (6.1 %)
Net loss (millions) (61 ) (1,118 ) (1,318 ) (15.2 %)
Net loss margin (19.1 %) (19.1 %) (23.1 %) 4.0 pp
Loss per share:
Basic (pesos) (0.06 ) (1.11 ) (1.30 ) (15.2 %)
Diluted (pesos) (0.06 ) (1.11 ) (1.30 ) (15.2 %)
Loss per ADS:
Basic (pesos) (0.60 ) (11.05 ) (13.02 ) (15.2 %)
Diluted (pesos) (0.60 ) (11.05 ) (13.02 ) (15.2 %)
Weighted average shares outstanding:
Basic - 1,011,876,677 1,011,876,677 0.0 %
Diluted     -         1,011,876,677         1,011,876,677         0.0 %
Available seat miles (ASMs) (millions) (1) - 5,055 4,547 11.2 %
Domestic - 3,446 3,080 11.9 %
International - 1,609 1,467 9.7 %
Revenue passenger miles (RPMs) (millions) (1) - 4,155 3,784 9.8 %
Domestic - 2,902 2,597 11.7 %
International - 1,253 1,186 5.6 %
Load factor (2) - 82.2 % 83.2 % (1.0 ) pp
Domestic - 84.2 % 84.3 % (0.1 ) pp
International     -         77.9 %       80.9 %       (3.0 ) pp
Total operating revenue per ASM (TRASM) (cents) 6.3 115.7 125.3 (7.7 %)
Fare revenue per ASM (RASM) (cents) 4.2 76.9 88.5 (13.2 %)
Fare revenue per RPM (Yield) (cents) 5.1 93.5 106.4 (12.1 %)
Average fare (2) 50 912 1,020 (10.6 %)
Average other passenger revenue 21 386 349 10.9 %
Average non-passenger revenue 4.1 74 74 1.1 %
Total ancillary revenue per passenger (4) 25.1 461 422 9.1 %
Operating expenses per ASM (CASM) (cents) 7.3 133.7 141.4 (5.4 %)
Operating expenses per ASM (CASM) (US cents) (3) - 7.1 6.9 2.7 %
CASM ex fuel (cents) 4.9 90.6 99.8 (9.1 %)
CASM ex fuel (US cents) (3)     -         4.8         4.9         (1.3 %)
Booked passengers (thousands) (1) - 4,263 3,964 7.5 %
Departures (1) - 28,188 26,754 5.4 %
Block hours (1) - 77,244 71,802 7.6 %
Fuel gallons consumed (millions) - 54.3 51.0 6.4 %
Average economic fuel cost per gallon 2.2 40.1 37.1 8.0 %
Aircraft at end of period - 70 68 2.9 %
Average aircraft utilization (block hours) - 13.2 12.4 6.1 %
Average exchange rate - 18.76 20.39 (8.0 %)
End of period exchange rate     -         18.34         18.81         (2.5 %)

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

(1) Includes schedule + charter

(2) Includes schedule

(3) Dollar amounts were converted at average exchange rate of each period

(4) Includes “other passenger revenues” and “non-passenger revenues”

 

   

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

Consolidated Statement of Operations

                     
Unaudited

Three months
ended March 31,
2018

Three months ended
March 31, 2018

Three months ended
March 31, 2017
(Adjusted)

Variance
(In millions of Mexican pesos) (US Dollars)* (%)
Operating revenues:
Passenger revenues 302 5,533 5,407 2.3 %
Fare revenues 212 3,886 4,025 (3.5 %)
Other passenger revenues 90 1,648 1,382 19.2 %
 
Non-passenger revenues 17 317 292 8.7 %
Cargo 3 49 41 18.2 %
Other non-passenger revenues 15 269 251 7.1 %
 
Total operating revenues 319 5,850 5,699 2.7 %
 
Other operating income - (1 ) (1 ) 38.1 %
Fuel 119 2,175 1,892 14.9 %
Aircraft and engine rent expense 87 1,596 1,699 (6.1 %)
Landing, take-off and navigation expenses 61 1,125 1,035 8.7 %
Salaries and benefits 41 746 696 7.3 %
Sales, marketing and distribution expenses 19 357 358 (0.1 %)
Maintenance expenses 19 351 351 (0.2 %)
Other operating expenses 15 274 269 1.9 %
Depreciation and amortization 7 132 128 3.1 %
Operating expenses 368 6,757 6,428 5.1 %
 
Operating loss (49 ) (906 ) (729 ) 24.3 %
 
Finance income 2 34 21 58.0 %
Finance cost (2 ) (34 ) (21 ) 62.7 %
Exchange loss, net (38 ) (691 ) (1,145 ) (39.6 %)
Comprehensive financing result (38 ) (691 ) (1,144 ) (39.6 %)
 
Loss before income tax (87 ) (1,597 ) (1,873 ) (14.7 %)
Income tax expense 26 479 556 (13.7 %)
Net loss (61 ) (1,118 ) (1,318 ) (15.2 %)
                               
*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
Reconciliation of total ancillary revenue per passenger

The adoption of the IFRS 15 impacted the classification and timing of recognition of certain ancillary items such as bags, advanced seat selection, itinerary changes and other air travel-related fees, since they are deemed part of the single performance obligation of providing passenger transportation. These ancillary items are now recognized in passenger revenue (disclosed below as “other passenger revenue”).

Non-passenger revenue primarily consists of revenue from the sale of other items such as rental cars, insurance, hotels and cargo. This change did not have a material impact on our income statement or balance sheet in any period presented.

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

Unaudited

(In millions of Mexican pesos)

   

Three months
ended March
31, 2018
(US Dollars)*

     

Three months
ended March
31, 2018

     

Three months
ended March

31, 2017
(Adjusted)

      Variance

(%)

   
 
 
Other passenger revenues 90 1,648 1,382 19.2 %
Non-passenger revenues 17 317 292 8.7 %
Total ancillary revenues 107 1,965 1,674 17.4 %
 
Booked passengers (thousands) 4,263 4,263 3,964 7.5 %
 
Total ancillary revenue per passenger 25.1 461 422 9.1 %

*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)

March 31, 2018
Unaudited

March 31, 2018
Unaudited

December 31, 2017
(Adjusted)

(US Dollars)*
Assets
Cash and cash equivalents 399 7,317 6,951
Accounts receivable 100 1,825 1,449
Inventories 17 305 295
Prepaid expenses and other current assets 41 755 768
Financial instruments 21 379 497
Guarantee deposits 64 1,176 1,353
Total current assets 641 11,757 11,313
Rotable spare parts, furniture and equipment, net 249 4,567 4,376
Intangible assets, net 9 173 190
Deferred income taxes 31 576 562
Guarantee deposits 307 5,627 6,098
Other assets 8 141 126
Total non-current assets 604 11,084 11,353
Total assets 1,245 22,841 22,666
Liabilities
Unearned transportation revenue 180 3,300 2,293
Accounts payable 59 1,076 1,118
Accrued liabilities 116 2,133 2,051
Other taxes and fees payable 114 2,089 1,245
Income taxes payable 8 139 111
Financial debt 139 2,542 2,404
Other liabilities 8 149 281
Total short-term liabilities 623 11,429 9,503
Financial debt 48 881 1,079
Accrued liabilities 10 183 200
Other liabilities 12 224 217
Employee benefits 1 20 19
Deferred income taxes 63 1,154 1,616
Total long-term liabilities 134 2,462 3,131
Total liabilities 757 13,891 12,635
Equity
Capital stock 162 2,974 2,974
Treasury shares (5 ) (85 ) (85 )
Contributions for future capital increases - - -
Legal reserve 16 291 291
Additional paid-in capital 99 1,807 1,805
Retained earnings 209 3,830 4,948
Accumulated other comprehensive losses 7 133 99
Total equity 488 8,950 10,031
Total liabilities and equity 1,245 22,841 22,666
 
Total shares outstanding fully diluted             1,011,876,677         1,011,876,677  
*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 Cash Flows – Cash Flow Data Summary

               
Unaudited

Three months
ended March 31,
2018

Three months
ended March 31,
2018

Three months
ended March 31,
2017
(Adjusted)

(In millions of Mexican pesos) (US Dollars)*
 
Net cash flow provided by operating activities 60 1,093 469
Net cash flow used in investing activities (17 ) (313 ) (342 )
Net cash flow provided by financing activities 4 65 174
Increase in cash and cash equivalents 46 844 300
Net foreign exchange differences (26 ) (478 ) (533 )
Cash and cash equivalents at beginning of period 379 6,951 7,071
Cash and cash equivalents at end of period     399         7,317         6,839  
 
*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

The following table shows adjusted balances after the adoption of IFRS 15, "Revenue from Contracts with Customers" on the quarterly statements of operations for each quarter of 2017. These recast amounts were derived from unaudited financial statements included in the quarterly reports on Form 6-K during the year ended December 31, 2017.

Unaudited

   

Three
months
ended March
31, 2017

     

Three months
ended June
30, 2017

     

Three months
ended
September
30, 2017

     

Three months
ended
December 31,
2017

     

Full Year 2017
Adjusted

   
(In millions of Mexican pesos)
Operating revenues:
Passenger revenues 5,407 5,699 6,286 6,258 23,649
Fare revenues 4,025 4,252 4,773 4,742 17,791
Other passenger revenues 1,382 1,448 1,513 1,516 5,858
 
Non-passenger revenues 292 294 286 267 1,139
Cargo 41 39 38 53 171
Other non-passenger revenues 251 256 248 214 968
 
Total operating revenues 5,699 5,994 6,571 6,524 24,788
 
Other operating income (1 ) (10 ) (8 ) (78 ) (97 )
Fuel 1,892 1,694 1,698 1,972 7,256
Aircraft and engine rent expense 1,699 1,378 1,384 1,612 6,073
Landing, take-off and navigation expenses 1,035 1,006 989 981 4,010
Salaries and benefits 696 717 695 715 2,824
Sales, marketing and distribution expenses 358 387 468 479 1,692
Maintenance expenses 351 362 324 396 1,433
Other operating expenses 269 271 249 300 1,088
Depreciation and amortization 128 139 150 131 549
Operating expenses 6,428 5,943 5,948 6,508 24,827
 
Operating (loss) income (729 ) 51 623 17 (39 )
 
Finance income 21 21 30 33 106
Finance cost (21 ) (22 ) (20 ) (24 ) (86 )
Exchange (loss) gain, net (1,145 ) (558 ) 125 784 (794 )
Comprehensive financing result (1,144 ) (559 ) 135 793 (774 )
 
(Loss) income before income tax (1,873 ) (508 ) 758 810 (813 )
Income tax benefit 556 0 (39 ) (356 ) 161
Net (loss) income (1,318 ) (508 ) 720 454 (652 )
 
(Loss) earnings per share:
Basic (pesos) (1.30 ) (0.50 ) 0.71 0.45 (0.64 )
Diluted (pesos) (1.30 ) (0.50 ) 0.71 0.45 (0.64 )
(Loss) earnings per ADS:
Basic (pesos) (13.02 ) (5.02 ) 7.11 4.49 (6.44 )
Diluted (pesos) (13.02 ) (5.02 ) 7.11 4.49 (6.44 )
 
 

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

The following table shows quarterly adjustments made due to the adoption of IFRS 15, "Revenue from Contracts with Customers" on the statements of operations for 2017.

Unaudited

(In millions of Mexican pesos)

   

Full Year 2017
as Reported

     

Three months
ended March 31,
2017

     

Three months
ended June 30,
2017

     

Three months
ended
September 30,
2017

     

Three months
ended
December 31,
2017

     

Full Year 2017
Adjusted

   
 
Operating revenues:
Passenger revenues 17,791 1,382 1,448 1,513 1,516 23,649
Fare revenues 17,791 - - - - 17,791
Other passenger revenues - 1,382 1,448 1,513 1,516 5,858
 
Non-passenger revenues 7,054 (1,339 ) (1,435 ) (1,524 ) (1,617 ) 1,139
Cargo 171 - - - - 171
Other non-passenger revenues 6,883 (1,339 ) (1,435 ) (1,524 ) (1,617 ) 968
 
Total operating revenues 24,845 43 12 (11 ) (101 ) 24,788
 
Other operating income (97 ) - - - - (97 )
Fuel 7,256 - - - - 7,256
Aircraft and engine rent expense 6,073 - - - - 6,073
Landing, take-off and navigation expenses 4,010 - - - - 4,010
Salaries and benefits 2,824 - - - - 2,824
Sales, marketing and distribution expenses 1,692 - - - - 1,692
Maintenance expenses 1,433 - - - - 1,433
Other operating expenses 1,088 - - - - 1,088
Depreciation and amortization 549 - - - - 549
Operating expenses 24,827 - - - - 24,827
 
Operating income (loss) 19 43 12 (11 ) (101 ) (39 )
 
Finance income 106 - - - - 106
Finance cost (86 ) - - - - (86 )
Exchange (loss), net (794 ) - - - - (794 )
Comprehensive financing result (774 ) - - - - (774 )
 
(Loss)income before income tax (756 ) 43 12 (11 ) (101 ) (813 )
Income tax benefit 161 - - - - 161
Net (loss) income (595 ) 43 12 (11 ) (101 ) (652 )
 
Basic (loss) earnings per share (0.59 ) 0.04 0.01 (0.01 ) (0.10 ) (0.64 )
Diluted (loss) earnings per share (0.59 ) 0.04 0.01 (0.01 ) (0.10 ) (0.64 )
 
 
 

Controladora Vuela Compañía de Aviación, S.A.B. de C.V. and Subsidiaries
Reconciliation of total ancillary revenue per passenger

The adoption of the IFRS 15 impacted the classification and timing of recognition of certain ancillary items such as bags, advanced seat selection, itinerary changes and other air travel-related fees, since they are deemed part of the single performance obligation of providing passenger transportation. These ancillary items are now recognized in passenger revenue (disclosed below as “other passenger revenue”).

Non-passenger revenue primarily consists of revenue from the sale of other items such as rental cars, insurance hotels and cargo. This change did not have a material impact on our income statement or balance sheet in any period presented.

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

Unaudited
(In millions of Mexican pesos)

   

Three months
ended March
31, 2017

     

Three months
ended June
30, 2017

     

Three months
ended
September 30,
2017

     

Three months
ended
December 31,
2017

     

Full Year 2017
Adjusted

   
 
 
Other passenger revenues 1,382 1,448 1,513 1,516 5,858
Non-passenger revenues 292 294 286 267 1,139
Total ancillary revenues 1,674 1,742 1,798 1,783 6,997
 
Booked passengers (thousands) 3,964 4,063 4,173 4,226 16,426
 
Total ancillary revenue per passenger 422 429 431 422 426
 

Total ancillary revenue per passenger (as reported) (*)

 

    411       426       434       446       429

(*) These recast amounts were derived from unaudited financial statements included in the quarterly reports on Form 6-K during the year ended December 31, 2017, under the called name “Non-ticket revenue per passenger”.

1 Source: Asociación Nacional de Tiendas de Autoservicio y Departamentales, A. C. (ANTAD)
2 Source: Banco de México (BANXICO)
3 Source: Instituto Nacional de Estadística y Geografía (INEGI)

Volaris
Investor Relations:
Andrés Pliego & Andrea González, +52 55 5261 6444
ir@volaris.com
or
Media:
Gabriela Fernández, +52 55 5246 0100
volaris@gcya.net

Source: Volaris