Core Insights - Controladora Vuela Compañía de Aviación, S.A.B. de C.V. (Volaris) reported a net loss of $63 million for Q2 2025, a significant decline compared to a net income of $10 million in Q2 2024, reflecting challenges in revenue generation and increased operating expenses [5][12][40]. Financial Performance - Total operating revenues for Q2 2025 were $693 million, down 4.5% from $726 million in Q2 2024, primarily due to lower unit revenues [4][8][42]. - Total operating expenses increased to $715 million, an 8.3% rise from $660 million in the previous year, driven by higher maintenance costs and lease expenses [4][10][42]. - EBITDAR for the quarter was $194 million, a decrease of 25.7% from $261 million in Q2 2024, with an EBITDAR margin of 27.9%, down 8.0 percentage points [4][12][32]. Operational Metrics - Available seat miles (ASMs) increased by 8.7% to 8.9 billion, while the load factor decreased to 82.4%, down 3.1 percentage points from 85.5% in the previous year [4][8][33]. - The number of booked passengers rose by 6.3% to 7.5 million, with domestic and international passengers increasing by 6.6% and 5.2%, respectively [8][33]. Cost Structure - The average economic fuel cost decreased by 14% to $2.46 per gallon, contributing to a slight decline in total operating expenses per available seat mile (CASM) to $8.05, down 0.3% [5][10][32]. - CASM excluding fuel increased by 6.7% to $5.69, reflecting ongoing cost control measures despite operational challenges [10][32]. Guidance and Outlook - The company reinstated its full-year guidance for EBITDAR margin, now expected to be in the range of 32% to 33% for 2025, despite external geopolitical challenges [3][17]. - For Q3 2025, Volaris anticipates ASM growth of approximately 6% and a TRASM of around $8.6 cents, indicating a cautious but optimistic outlook [17][18]. Balance Sheet and Liquidity - As of June 30, 2025, total cash, cash equivalents, and short-term investments amounted to $788 million, representing 26% of the last twelve months' total operating revenue [13][50]. - The net debt-to-LTM EBITDAR ratio stood at 2.9x, consistent with the previous quarter, indicating stable leverage despite the operational losses [14][50]. Fleet and Capacity - The fleet size increased to 149 aircraft, with the addition of four A320neo and one A321neo, reflecting a strategy to modernize and expand capacity [21][22]. - The average age of the fleet is 6.5 years, with 63% of the aircraft being New Engine Option (NEO) models, enhancing fuel efficiency and operational performance [21][22].