troladora Vuela pania de Aviacion(VLRS)2024-10-24 01:57Financial Data and Key Metrics Changes - Total operating revenue for Q3 2024 was 126 million, an increase of over 100% compared to 37 million compared to a net loss of 0.32 [25] - The net debt-to-EBITDA ratio improved from 3.5 times in Q3 2023 to 2.7 times in Q3 2024, one of the lowest levels in the company's history [11][27] Business Line Data and Key Metrics Changes - Ancillary revenues as a percentage of total operating revenues increased from 34% in 2019 to 51% over the past 12 months [7] - Average load factor for Q3 2024 was 87.4%, a 1 percentage point increase year-over-year, with a domestic load factor of 90% and an international load factor of 83.4% [16] - Non-ticket revenue as a percentage of total revenue remained strong and stable at 50% [19] Market Data and Key Metrics Changes - Approximately 40% of total ASMs are currently in the international market, with plans to shift more capacity to the US-Mexico transborder market [18] - The company achieved a remarkable system schedule completion rate of 98.5% while controlling costs despite an aging fleet [8] Company Strategy and Development Direction - The company aims to prioritize profitability over market share, with structural flexibility allowing for capacity adjustments based on market conditions [13][56] - Volaris is focusing on expanding its offerings in the US-Mexico transborder market, leveraging its cost advantage over North American ULCCs and legacy airlines [18][21] - The company plans to maintain a balanced growth strategy between domestic and international routes [54] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate challenges, highlighting improved turnaround times and a solid outlook for engine redeliveries [12][51] - The new administration in Mexico is expected to maintain continuity in aviation policies, with a focus on promoting healthy sector development [37][40] - Booking trends remain strong, with expectations for total revenue for the full year 2024 to be close to 2023 levels despite a double-digit reduction in capacity [20] Other Important Information - The company has hedged approximately 30% of projected fuel consumption for the high season months of November 2024 through January 2025 at an average strike price of $2.25 per gallon [32] - The average age of the fleet is 6.3 years, with a total of 137 aircraft as of September 30, 2024 [29] Q&A Session Summary Question: Capacity outlook for the first quarter and first half of 2025 - Management expects growth in the mid-teens for the first half of 2025, subject to finalization [35][36] Question: Impact of recent FX depreciation on fares - The company aims to increase US dollar collections to 50% to mitigate FX impacts, with 90% of cash held in US dollars [39] Question: Profitability of international routes versus domestic - Growth is expected to be balanced between domestic and international routes, with higher ancillary revenues on international routes [54] Question: Timing expectations for Pratt & Whitney engine recalls - Significant progress has been made, with a reduction in overall wing-to-wing time for engine maintenance [51] Question: Future growth from international bus routes - The company already operates many niche routes that previously relied on bus travel, with opportunities for growth in these segments [43] Question: Other operating income expectations for 2025 - A slight decrease is expected due to fewer aircraft on average during the year [46] Question: Bookings and fares outlook for early 2025 - Solid bookings are anticipated into the fourth quarter, with a healthy fare environment expected to continue into early 2025 [48]