After five quarters of consecutive losses due to the impact of the COVID-19 pandemic, Volaris registered a net income of US$78 million between April and June 2021. The company is back in the black and had its first profit since 2019’s last quarter. Moreover, it had an all-time high daily cash generation and is excited about the near future. Let’s investigate further.
Looking at Volaris’ results
Volaris is currently the leading operator in Mexico. In the first six months of 2021, the airline has carried 10.4 million passengers, a 1.3% decrease compared to 2019’s first half. Basically, Volaris is back to its pre-pandemic levels and ready to grow.
During 2021’s second quarter, Volaris generated total operating revenue of USD$581 million, which led to a net income of US$78 million. This is the first time any Mexican carrier generates a profit since the start of the COVID-19 pandemic worldwide. Viva Aerobus hasn’t published its financial results but may very well have also been profitable.
Moreover, Volaris delivered cash generation of US$1.2 million per day, which is a record for the company. Jaime Pous, Volaris Chief Financial Officer, said Volaris expects to increase daily cash generation to US$1.3 million in the third quarter. He added,
“Historically, the third-quarter generally consumes cash. So cash generation of this magnitude is exciting for the company.”
Volaris’ fleet plans
During 2021’s second quarter, Volaris incorporated five new A320neo aircraft into its fleet. As of June 30, 2021, Volaris had 92 aircraft. It included six A319, 70 A320s, and 16 A321s. Two years ago, the Mexican low-cost carrier had 78 planes.
Volaris offered an average of 188 seats per aircraft, 80% are sharklet-equipped, and 39 have the new engine option, said the airline.
In addition, Volaris flew over 38,000 segments to more than 70 different stations in Mexico, the US, Costa Rica, Guatemala, and El Salvador.
In the next 18 months, Volaris will receive 25 A320neo family aircraft. It plans to end 2021 with a fleet of 101 units and 2022 with 113. By the end of 2022, 54% of its whole fleet will be off the A320neo family aircraft.
Volaris will deploy these aircraft on Mexican hubs like Mexico City, Tijuana, and Guadalajara. But it also plans to send a few planes to its bases in Costa Rica and El Salvador.
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Costa Rica, El Salvador and Colombia
While Mexico remains in Category 2 with the Federal Aviation Administration in the US, Volaris will deploy its new capacity elsewhere.
That’s why Volaris’ management is working towards obtaining its Air Operator Certificate in El Salvador. Volaris will launch a new low-cost carrier in this country and benefit from the lack of similar competitors in the region. The new airline will launch operations in 2021’s last quarter. Enrique Beltranena, Volaris CEO, explained more about the plans in Central America,
“We have a franchise in Costa Rica called Volaris Costa Rica, which currently operates two aircraft in routes to Mexico and the US; we are planning to add one additional aircraft there, in the latter part of this year, to come back to pre COVID levels. In addition, we are starting Volaris El Salvador in the fourth quarter of this year. So we will have the ability or the traffic rights to connect El Salvador more directly with the US without the use of fifth freedoms through Salvador, which will give us new avenues of growth in Central America.”
Finally, Volaris plans to launch its new flights to Colombia later in the year. The low-cost carrier will be the third Mexican operator to fly to Bogota, following Aeromexico and Viva Aerobus. Volaris will connect Mexico City and Cancun with the Colombian city.
What do you think of Volaris’ second-quarter results? Let us know in the comments.