• Total Revenue: $3.1 billion for 2024, nearly the same level as 2023.
• Net Profit: $126 million for the full year 2024.
• EBITDA Margin: 36% for the full year 2024.
• Operating Cash Flow: Over $300 million generated in 2024.
• Liquidity Position: $954 million at the end of 2024.
• ASM (Available Seat Miles): 13% decrease year-over-year in 2024.
• Passenger Count: 29.5 million passengers carried in 2024.
• Ancillary Revenue: Accounted for more than 50% of total revenues in 2024.
• Net Debt to EBITDA Ratio: Reduced to 2.6 times by the end of 2024.
• Fuel Cost: Average economic fuel cost dropped 20% to $2.51 per gallon in Q4 2024.
• Fleet Size: 142 aircraft at the end of 2024, up from 129 a year ago.
• Load Factor: 87.3% for Q4 2024.
• Non-Fare Revenue: 52% of top line in 2024.
• Fourth Quarter Revenue: $835 million, a 7% decline year-over-year.
• Fourth Quarter Net Income: $46 million profit.

• Warning! GuruFocus has detected 6 Warning Signs with VLRS.

Release Date: February 24, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Controladora Vuela Compania de Aviacion SAB de CV (NYSE:VLRS) achieved a full year EBA margin of 36% in 2024, demonstrating strong financial performance despite challenges.
• The company maintained a stable revenue stream with $3.1 billion in total revenue, nearly matching 2023 levels, despite a 13% reduction in available seat miles (ASMs).
• Ancillary revenues accounted for more than 50% of total revenues, reflecting successful diversification and integration of ancillary programs.
• Controladora Vuela Compania de Aviacion SAB de CV (NYSE:VLRS) achieved a net promoter score of 37.4%, significantly outperforming low-cost carriers in the United States.
• The company was recognized in the Dow Jones best-in-class indexes for the third consecutive year, highlighting its commitment to sustainability and operational excellence.

Negative Points

• The company faced significant challenges due to GTF engine inspections and aircraft groundings, affecting more than half of its fleet engines.
• There was a 13% system-wide capacity decrease in 2024, with domestic capacity declining by 22%.
• The company anticipates ongoing revisions to affect a significant portion of its fleet in 2025, 2026, and 2027, potentially impacting operations.
• Controladora Vuela Compania de Aviacion SAB de CV (NYSE:VLRS) experienced a 20% depreciation of the Mexican peso against the US dollar, impacting topline results.
• The company expects a one-time cost of approximately $100 million in 2025 due to redelivery accruals and related maintenance.

Q & A Highlights

Q: Can you elaborate on the impact of the US-Mexico border dynamics on your operations and revenue? A: Holger Blankenstein, Executive Vice President - Commercial Airline and Operations: Since the US elections, we've observed a reduction in traffic and willingness to travel in the US-Mexico transborder market, affecting both US and Mexican sides. However, high seasons like Christmas and Easter have shown robust bookings. The peso devaluation has also impacted leisure travel to the US, making it more expensive.

Q: How are the sale and leaseback transactions affecting your financials? A: Jaime Esteban Pous Fernandez, Chief Financial Officer: The sale and leaseback transactions for six aircraft resulted in a gain of approximately $13.6 million. This is standard for such transactions, with each aircraft contributing around $3 million. The main difference from last year is the variable lease expenses, which benefited from extensions to protect capacity.

Q: Can you quantify the impact of the Easter shift on your financials? A: Holger Blankenstein, Executive Vice President - Commercial Airline and Operations: The shift of Easter into April affects our first-quarter results, primarily due to the timing of travel demand. We expect a mid-single-digit decline in total revenue per available seat mile (TRASM) for the full year in US dollar terms.

Q: What is the outlook for aircraft on ground due to engine issues? A: Enrique Beltranena Mejicano, CEO: We expect to have an average of 30 aircraft on ground due to engine issues this year, similar to last year. The number may be higher in the first quarter, around 32, but we will update this quarterly as the situation evolves.

Q: How are you managing costs related to salaries and leases? A: Jaime Esteban Pous Fernandez, Chief Financial Officer: Salaries are impacted by the exchange rate, as they are paid in pesos. We also have revenue profit sharing obligations by law. Variable leases increased due to the addition of new aircraft.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.