troladora Vuela pania de Aviacion(US:VLRS)2025-02-24 20:57Financial Data and Key Metrics Changes - In 2024, Volaris achieved a net profit of $126 million, with an EBIT margin of 13% and an EBITDAR margin of 36% [44][54] - Total operating revenues for the year were $3.1 billion, reflecting a 4% decrease despite flying 13% fewer ASMs [54] - The average economic fuel cost dropped by 20% to $2.51 per gallon, while CASM increased by 3% to $0.0804 [48][54] Business Line Data and Key Metrics Changes - Ancillary revenues accounted for over 50% of total revenues, with record ancillaries per passenger reaching $55, a 15% increase [13][25] - Domestic capacity decreased by 22% in 2024, while the Mexico to US segment grew by 16% [27][28] - The total load factor for the fourth quarter was 87.3%, down just 0.8 percentage points compared to the prior year [32] Market Data and Key Metrics Changes - Volaris experienced a 13% year-over-year reduction in ASMs, with a significant impact on domestic capacity [26][27] - The company optimized its network by shifting capacity from domestic to international markets, with 40% of capacity in the international market by the end of 2024 [28] - The company noted volatility in markets like Mexico to Central America but observed good yields following capacity rationalization [28] Company Strategy and Development Direction - Volaris aims to operate over 90% of its fleet with NEO technology by 2030, focusing on reducing fleet ownership costs [18] - The company is committed to maximizing return on investment while navigating supply chain challenges and maintaining operational reliability [18][22] - Volaris plans to enhance its ancillary strategy by bundling core offerings into a single affinity portfolio to drive greater penetration [35] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges from GTF engine inspections and geopolitical uncertainties affecting travel demand, particularly in the US-Mexico corridor [23][63] - The company expects EBITDAR margins for 2025 to be between 34% and 36%, with ASM growth of around 13% [64] - Management remains optimistic about the long-term growth potential of the low-cost carrier model in Mexico, emphasizing the importance of rational capacity deployment [71][72] Other Important Information - Volaris ended 2024 with a liquidity position of $954 million, representing 30% of total operating revenues [57] - The company has a well-structured debt profile, with total debt standing at $3.9 billion, primarily composed of lease liabilities [58] - The average age of the fleet is 6.4 years, with plans for continued modernization and fleet expansion [60] Q&A Session Summary Question: Impact of US to Mexico VFR traffic on RASM - Management noted a reduction in traffic willingness from both US and Mexican sides, influenced by geopolitical factors and currency devaluation [76][81] Question: Cash inflow from sale and leaseback transactions - The cash inflow from sale and leaseback transactions is around $3 million per aircraft, with a notable difference from previous years due to variable lease expenses [83][86] Question: Easter shift impact on RASM - The Easter season bookings look solid, but the TRASM decline in the first quarter is primarily driven by FX changes and the timing of Easter [89][92] Question: CASM expectations for 2025 - CASM is expected to remain similar to 2024 levels, notwithstanding the first quarter's numbers [94] Question: Aircraft on ground projections - The average number of aircraft on ground is expected to be around 30 for 2025, with updates provided quarterly [125] Question: Salary and lease cost growth - Salaries are stable due to FX impacts, while variable lease costs increased due to the addition of aircraft [128][129]