Volaris Reports Second Quarter 2018 Results: Ancillary Revenue Expansion And Reduction Of Unit Cost Excluding Fuel

July 20, 2018

MEXICO CITY, July 20, 2018 /PRNewswire/ -- 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 2018.

Volaris Logo (PRNewsFoto/Volaris)

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

Second Quarter 2018 Highlights

  • Total operating revenues reached Ps.6,230 million for the second quarter, an increase of 3.9% year over year.
  • Total ancillary revenues were Ps.2,093 million for the second quarter, an increase of 20.1% year over year. The total ancillary revenues per passenger for the second quarter were Ps.466, increasing 8.7% year over year.
  • Total operating revenues per available seat mile (TRASM) were Ps.123.1 cents for the second quarter, a decrease of 4.7% year over year.
  • Operating expenses per available seat mile (CASM) were Ps.134.5 cents for the second quarter, an increase of 5.0% year over year; with an average economic fuel cost per gallon of Ps.45.3, increasing 41.2% year over year, and an average exchange rate of Ps.19.37, a year over year increase of 4.2%. Operating expenses per available seat mile excluding fuel (CASM ex fuel) were Ps. 86.2 cents for the second quarter, a decrease of 5.9% year over year.
  • Operating loss was Ps.575 million for the second quarter, with an operating margin of (9.2%), equal to a year over year operating margin decrease of 10.1 percentage points.
  • Net income was Ps.38 million (Ps.0.04 per share / US$0.02 per ADS) for the second quarter, with a net income margin of 0.6%, equal to a year over year net margin increase of 9.1 percentage points.
  • At the end of the second quarter, the Mexican peso depreciated 8.3% against the U.S. dollar with respect to the end of period exchange rate of the previous quarter. The Company booked a foreign exchange gain of Ps.653 million as a consequence of our U.S. dollar net monetary asset position.
  • Net cash flow used in operating activities was Ps.493 million, in conjunction with cash flow used in investing activities of Ps.348 million, net cash flow used in financing activities of Ps.204 million, and a positive net foreign exchange difference of Ps.499 million, the net cash decrease in the second quarter was Ps.546 million. As of June 30, 2018, cash and cash equivalents were Ps.6,771 million.

Stable Macroeconomics and Domestic Consumer Demand with Exchange Rate Depreciation and Fuel Price Pressures

  • Resilient macroeconomics and domestic consumer demand: The macroeconomic indicators in Mexico during the second quarter were stable, with same store sales1 increasing 4.5% year over year; remittances2 increased 18.9% year over year during April and May 2018; and the Mexican General Economic Activity Indicator (IGAE) 3 increasing 1.4% year over year in April of 2018.
  • Air traffic volume increase: The Mexican DGAC reported overall passenger volume growth for Mexican carriers of 9.9% year over year in April and May; domestic overall passenger volume increased 9.6%, while international overall passenger volume increased 11.0%.
  • Exchange rate volatility: The Mexican peso depreciated 4.2% year over year against the US dollar, from an average exchange rate of Ps.18.60 pesos per US dollar in the second quarter 2017 to Ps.19.37 pesos per US dollar during the second quarter 2018. At the end of the second quarter, the Mexican peso depreciated 8.3% with respect to the end of period exchange rate of the previous quarter. The Company booked a foreign exchange gain of Ps.653 million as a consequence of our US dollar net monetary asset position.
  • Higher fuel prices: The average economic fuel cost per gallon increased 41.2%, year over year, to Ps.45.3 per gallon (US$2.3) in the second quarter 2018, year over year.

Passenger Traffic Stimulation and Further Ancillary Revenue Expansion, Partially Offset Challenged Fare Environment

  • Passenger traffic stimulation: Volaris booked 4.5 million passengers in the second quarter of 2018, up 10.5% year over year. Volaris traffic (measured in terms of fare revenue miles, or RPMs) increased 9.2% for the same period. System load factor during the quarter increased 0.1 percentage points year over year to 85.8%.
  • Challenged fare environment: For the second quarter of 2018, yield decreased 10.9% with TRASM decreasing 4.7%, year over year. During the second quarter, in terms of ASMs, domestic capacity grew 14.0%, while international capacity decreased 0.5%, year over year.
  • Total ancillary revenue growth: Total ancillary revenues and total ancillary revenues per passenger increased 20.1% and 8.7% year over year for the second quarter of 2018, respectively. The total ancillary revenues generation continues to grow with new and matured products, appealing to customers' needs, representing 34% of the total operating revenues.
  • New routes: In the second quarter 2018, Volaris began operations in two new international routes between: a) San Jose, Costa Rica – San Salvador, El Salvador – New York City, New York; and b) San Jose, Costa Rica - San Salvador, El Salvador – Washington, D.C.

Cost Control and Discipline, Despite Fuel Price Pressure and Exchange Rate Depreciation

  • CASM and CASM ex fuel for the second quarter 2018 were Ps.134.5 (US$6.9 cents) and Ps.86.2 cents (US$4.4 cents), respectively. This represented an increase of 5.0% and decrease of 5.9%, respectively; mainly driven by increase in the average economic fuel cost per gallon by 41.2%, average exchange rate depreciation of 4.2% and tightening cost control discipline.

Young and Fuel-efficient Fleet

  • During the second quarter 2018, the Company incorporated three aircraft (two A321 neo and one A320 neo) to its fleet and three aircraft (A319) were redelivered during the second quarter. As of June 30, 2018, Volaris fleet was composed of 70 aircraft (8 A319s, 50 A320s and 12 A321s), with an average age of 4.5 years. At the end of the second quarter 2018, Volaris' fleet had an average of 184 seats, 70% of which were in sharklet-equipped aircraft.

Solid Balance Sheet and Good Liquidity

  • Net cash flow used in operating activities was Ps.493 million, in conjunction with cash flow used in investing activities of Ps.348 million, net cash flow used in financing activities of Ps.204 million, and a positive net foreign exchange differences of Ps.499 million, the net cash used in the second quarter was Ps.546 million. As of June 30, 2018, cash and cash equivalents were Ps.6,771 million, representing now 27% of last twelve months operating revenues. Volaris registered negative net debt (or a positive net cash position) of Ps.3,287 million and total equity of Ps.9,145 million.

Active in Risk Management

  • Volaris remains active in its fuel risk management program. Volaris used call options to hedge 65% of its second quarter 2018 fuel consumption, at an average strike price of US $1.74 per gallon, which combined with the 35% unhedged consumption, resulted in a blended average economic fuel cost of US$2.3 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 these 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, July 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/1174/26449

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 June 30,
2018

Three months
ended June 30, 2018

Three months
ended June 30, 2017

(Adjusted)

Variance

(In Mexican pesos, except otherwise indicated)

(US Dollars)*

(%)

Total operating revenues (millions)

314

6,230

5,994

3.9%

Total operating expenses (millions)

343

6,805

5,943

14.5%

EBIT (millions)

(29)

(575)

51

NA

EBIT margin

(9.2%)

(9.2%)

0.9%

(10.1) pp

Depreciation and amortization

6

124

139

(11.3%)

Aircraft and engine rent expense

76

1,504

1,378

9.2%

Net income (loss) (millions)

2

38

(508)

NA

Net income (loss) margin

0.6%

0.6%

(8.5%)

9.1 pp

Income (loss) per share:





Basic (pesos)

0.00

0.04

(0.50)

NA

Diluted (pesos)

0.00

0.04

(0.50)

NA

Income (loss) per ADS:





Basic (pesos)

0.02

0.38

(5.02)

NA

Diluted (pesos)

0.02

0.38

(5.02)

NA

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)

-

5,060

4,639

9.1%

     Domestic

-

3,488

3,059

14.0%

     International

-

1,572

1,580

(0.5%)

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

-

4,337

3,973

9.2%

     Domestic

-

3,095

2,715

14.0%

     International

-

1,242

1,257

(1.2%)

Load factor (2)

-

85.8%

85.7%

0.1 pp

     Domestic

-

88.7%

88.8%

(0.1) pp

     International

-

79.1%

79.5%

(0.4) pp

Total operating revenue per ASM (TRASM) (cents)

6.2

123.1

129.2

(4.7%)

Fare revenue per ASM (RASM) (cents)

4.1

81.7

91.7

(10.8%)

Fare revenue per RPM (Yield) (cents)

4.8

95.4

107.0

(10.9%)

Average fare (2)

46

923

1,051

(12.2%)

Average other passenger revenue

20

399

356

12.0%

Average non-passenger revenue

3.4

67

72

(7.4%)

Total ancillary revenue per passenger (4)

23.5

466

429

8.7%

Operating expenses per ASM (CASM) (cents)

6.8

134.5

128.1

5.0%

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

-

6.9

6.9

0.8%

CASM ex fuel (cents)

4.3

86.2

91.6

(5.9%)

CASM ex fuel (US cents) (3)

-

4.4

4.9

(9.7%)

Booked passengers (thousands) (1)

-

4,491

4,063

10.5%

Departures (1)

-

28,497

26,429

7.8%

Block hours (1)

-

77,263

72,035

7.3%

Fuel gallons consumed (millions)

-

54.0

52.8

2.2%

Average economic fuel cost per gallon

2.3

45.3

32.1

41.2%

Aircraft at end of period

-

70

66

6.1%

Average aircraft utilization (block hours)

-

13.2

12.8

3.6%

Average exchange rate

-

19.37

18.60

4.2%

End of period exchange rate

-

19.86

17.90

11.0%

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

(1) Includes schedule + 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"

 

 

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

Financial and Operating Indicators


Unaudited

Six months ended
June 30, 2018

Six months
ended June 30, 2018

Six months
ended June 30, 2017

(Adjusted)

Variance

(In Mexican pesos, except otherwise indicated)

(US Dollars)*

(%)

Total operating revenues (millions)

608

12,080

11,692

3.3%

Total operating expenses (millions)

683

13,562

12,371

9.6%

EBIT (millions)

(75)

(1,481)

(678)

>100%

EBIT margin

(12.3%)

(12.3%)

(5.8%)

(6.5) pp

Depreciation and amortization

13

256

268

(4.4%)

Aircraft and engine rent expense

156

3,100

3,077

0.8%

Net loss (millions)

(54)

(1,080)

(1,826)

(40.8%)

Net loss margin

(8.9%)

(8.9%)

(15.6%)

6.7 pp

Loss per share:





Basic (pesos)

(0.05)

(1.07)

(1.80)

(40.8%)

Diluted (pesos)

(0.05)

(1.07)

(1.80)

(40.8%)

Loss per ADS:





Basic (pesos)

(0.54)

(10.67)

(18.04)

(40.8%)

Diluted (pesos)

(0.54)

(10.67)

(18.04)

(40.8%)

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)

-

10,115

9,186

10.1%

     Domestic

-

6,935

6,139

13.0%

     International

-

3,180

3,047

4.4%

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

-

8,491

7,756

9.5%

     Domestic

-

5,996

5,313

12.9%

     International

-

2,495

2,443

2.1%

Load factor (2)

-

84.0%

84.5%

(0.5) pp

     Domestic

-

86.5%

86.5%

0.0 pp

     International

-

78.5%

80.2%

(1.7) pp

Total operating revenue per ASM (TRASM) (cents)

6.0

119.4

127.3

(6.2%)

Fare revenue per ASM (RASM) (cents)

4.0

79.3

90.1

(12.0%)

Fare revenue per RPM (Yield) (cents)

4.8

94.5

106.7

(11.5%)

Average fare (2)

46

918

1,036

(11.4%)

Average other passenger revenue

20

393

352

11.5%

Average non-passenger revenue

3.6

71

73

(3.2%)

Total ancillary revenue per passenger (4)

23.3

464

426

8.9%

Operating expenses per ASM (CASM) (cents)

6.7

134.1

134.7

(0.4%)

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

-

7.0

6.9

1.7%

CASM ex fuel (cents)

4.5

88.4

95.6

(7.6%)

CASM ex fuel (US cents) (3)

-

4.6

4.9

(5.5%)

Booked passengers (thousands) (1)

-

8,754

8,028

9.0%

Departures (1)

-

56,685

53,183

6.6%

Block hours (1)

-

154,507

143,837

7.4%

Fuel gallons consumed (millions)

-

108.2

103.8

4.3%

Average economic fuel cost per gallon

2.1

42.7

34.6

23.5%

Aircraft at end of period

-

70

66

6.1%

Average aircraft utilization (block hours)

-

13.2

12.7

4.4%

Average exchange rate

-

19.07

19.49

(2.2%)

End of period exchange rate

-

19.86

17.90

11.0%

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

(1) Includes schedule + 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"

 

 

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

Consolidated Statement of Operations


Unaudited

Three months
ended June 30,
2018

Three months ended
June 30, 2018

Three months ended
June 30, 2017

(Adjusted)

Variance

(In millions of Mexican pesos)

(US Dollars)*

(%)

Operating revenues:





Passenger revenues

298

5,929

5,699

4.0%

   Fare revenues

208

4,137

4,252

(2.7%)

   Other passenger revenues

90

1,792

1,448

23.8%






Non-passenger revenues

15

301

294

2.4%

   Cargo

3

53

39

37.1%

   Other non-passenger revenues

13

249

256

(2.9%)






Total operating revenues

314

6,230

5,994

3.9%






Other operating income

(12)

(231)

(10)

>100%

Fuel

123

2,445

1,694

44.3%

Aircraft and engine rent expense

76

1,504

1,378

9.2%

Landing, take-off and navigation expenses

58

1,150

1,006

14.4%

Salaries and benefits

38

750

717

4.5%

Sales, marketing and distribution expenses

19

382

387

(1.3%)

Maintenance expenses

19

381

362

5.2%

Other operating expenses

15

301

271

11.2%

Depreciation and amortization

6

124

139

(11.3%)

Operating expenses

343

6,805

5,943

14.5%






Operating (loss) income

(29)

(575)

51

NA






Finance income

2

37

21

73.4%

Finance cost

(2)

(31)

(22)

41.6%

Exchange gain (loss), net

33

653

(558)

NA

Comprehensive financing result

33

660

(559)

NA






Income (loss) before income tax

4

85

(508)

NA

Income tax expense

(2)

(47)

-

NA

Net income (loss)

2

38

(508)

NA






*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 Operations


Unaudited

Six months ended
June 30, 2018

Six months ended
June 30, 2018

Six months ended
June 30, 2017

(Adjusted)

Variance

(In millions of Mexican pesos)

(US Dollars)*

(%)

Operating revenues:





Passenger revenues

577

11,462

11,106

3.2%

   Fare revenues

404

8,022

8,277

(3.1%)

   Other passenger revenues

173

3,440

2,830

21.6%






Non-passenger revenues

31

619

586

5.5%

   Cargo

5

101

80

27.3%

   Other non-passenger revenues

26

517

507

2.1%






Total operating revenues

608

12,080

11,692

3.3%






Other operating income

(12)

(232)

(11)

>100%

Fuel

233

4,620

3,586

28.8%

Aircraft and engine rent expense

156

3,100

3,077

0.8%

Landing, take-off and navigation expenses

115

2,275

2,040

11.5%

Salaries and benefits

75

1,496

1,413

5.9%

Sales, marketing and distribution expenses

37

739

744

(0.7%)

Maintenance expenses

37

732

713

2.6%

Other operating expenses

29

575

540

6.6%

Depreciation and amortization

13

256

268

(4.4%)

Operating expenses

683

13,562

12,371

9.6%






Operating loss

(75)

(1,481)

(678)

>100%






Finance income

4

71

43

65.7%

Finance cost

(3)

(65)

(43)

51.8%

Exchange loss, net

(2)

(38)

(1,703)

(97.8%)

Comprehensive financing result

(2)

(31)

(1,703)

(98.2%)






Loss before income tax

(76)

(1,513)

(2,381)

(36.5%)

Income tax benefit

22

433

556

(22.1%)

Net loss

(54)

(1,080)

(1,826)

(40.8%)






*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

Three months
ended June 30,
2018

(US Dollars)*

Three months
ended June 30,
2018

Three months
ended June 30,
2017

(Adjusted)

Variance

(%)

(In millions of Mexican pesos)






Other passenger revenues

90

1,792

1,448

23.8%

Non-passenger revenues

15

301

294

2.4%

Total ancillary revenues

105

2,093

1,742

20.1%






Booked passengers (thousands)

4,491

4,491

4,063

10.5%






Total ancillary revenue per passenger

23.5

466

429

8.7%






*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)

June 30, 2018
Unaudited

June 30, 2018
Unaudited

December 31, 2017
(Adjusted)

(US Dollars)*

Assets




Cash and cash equivalents

341

6,771

6,951

Accounts receivable

82

1,633

1,449

Inventories

16

316

295

Prepaid expenses and other current assets

40

793

768

Financial instruments

26

524

497

Guarantee deposits

63

1,261

1,353

Total current assets

569

11,299

11,313

Rotable spare parts, furniture and equipment, net

254

5,046

4,376

Intangible assets, net

8

168

190

Deferred income taxes

29

573

562

Guarantee deposits

305

6,051

6,098

Other assets

7

140

126

Total non-current assets

603

11,978

11,353

Total assets

1,172

23,277

22,666

Liabilities




Unearned transportation revenue

172

3,419

2,293

Accounts payable

64

1,271

1,118

Accrued liabilities

114

2,263

2,051

Other taxes and fees payable

87

1,731

1,245

Income taxes payable

7

141

111

Financial debt

130

2,577

2,404

Other liabilities

5

105

281

Total short-term liabilities

579

11,506

9,503

Financial debt

46

908

1,079

Accrued liabilities

8

159

200

Other liabilities

14

273

217

Employee benefits

1

21

19

Deferred income taxes

64

1,265

1,616

Total long-term liabilities

132

2,626

3,131

Total liabilities

711

14,132

12,635

Equity




Capital stock

150

2,974

2,974

Treasury shares

(4)

(85)

(85)

Contributions for future capital increases

-

-

-

Legal reserve

15

291

291

Additional paid-in capital

91

1,809

1,805

Retained earnings

195

3,868

4,948

Accumulated other comprehensive losses

14

287

99

Total equity

460

9,145

10,031

Total liabilities and equity

1,172

23,277

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 June 30, 2018

Three months
ended June 30,
2018

Three months
ended June 30,
2017

(Adjusted)

(In millions of Mexican pesos)

(US Dollars)*





Net cash flow used in operating activities

(25)

(493)

(215)

Net cash flow used in investing activities

(18)

(348)

(502)

Net cash flow (used in) provided by financing activities

(10)

(204)

91

Decrease in cash and cash equivalents

(53)

(1,045)

(625)

Net foreign exchange differences

25

499

(232)

Cash and cash equivalents at beginning of period

368

7,317

6,839

Cash and cash equivalents at end of period

341

6,771

5,981

*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

Six months

ended June 30, 2018

Six months
ended June 30,
2018

Six months
ended June 30,
2017

(Adjusted)

(In millions of Mexican pesos)

(US Dollars)*





Net cash flow provided by operating activities

30

599

254

Net cash flow used in investing activities

(33)

(661)

(844)

Net cash flow (used in) provided by financing activities

(7)

(139)

265

Decrease in cash and cash equivalents

(10)

(201)

(325)

Net foreign exchange differences

1

21

(765)

Cash and cash equivalents at beginning of period

350

6,951

7,071

Cash and cash equivalents at end of period

341

6,771

5,981

*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

-

(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

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

(In millions of Mexican pesos)

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

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)







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)

 

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SOURCE Volaris