troladora Vuela pania de Aviacion(VLRS) - 2025 Q3 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Total operating revenues for Q3 2025 were $784 million, a 4% decrease compared to Q3 2024 [24] - EBITDA reached $264 million with a margin of 33.6%, aligned with guidance [27] - Net profit was $6 million, translating to earnings per ADS of $0.05 [27] - Cash flow generated by operating activities in Q3 was $205 million, with total liquidity at $794 million [28] Business Line Data and Key Metrics Changes - Domestic load factor reached 89.8%, consistent with last year's levels, reflecting stable demand [6][14] - International load factor was at 77%, prioritizing yield over loads to optimize profitability [14] - Average ancillary revenue per passenger for Q3 was $56, consistently above $50 for eight consecutive quarters [15] Market Data and Key Metrics Changes - The recovery in cross-border demand is evident, with traffic improving month over month [6][15] - Booking trends in the US-Mexico transborder market show sustained improvement compared to last year [40][54] Company Strategy and Development Direction - The company is focused on maintaining a disciplined growth strategy, with a capacity growth outlook of approximately 7% for 2025 [7][23] - Volaris aims to enhance its ultra-low-cost carrier model by expanding ancillary products and optimizing distribution channels [11][21] - The company is adapting its fleet plan to ensure flexibility in response to demand trends [8][31] Management's Comments on Operating Environment and Future Outlook - Management noted that demand momentum is building, with a stable domestic demand and improved travel sentiment in cross-border markets [4][5] - The company expects to close 2025 and enter 2026 stronger and more efficient, with a focus on capturing opportunities and driving sustained profitability [12][36] Other Important Information - The company has a favorable position with an order book of 122 aircraft, with 84% being A320neo to A321neo models [31] - Volaris is leveraging technology to enhance customer service, with 79% of customer interactions now handled through digital channels [22] Q&A Session Summary Question: Can you elaborate on the stronger-than-normal seasonality in international markets and the inflection point in the US-Mexico transborder market? - Management indicated that since mid-August, sales in the US-Mexico transborder market have been above last year's levels, showing optimism for Q4 traffic evolution [40] Question: How many lease returns are expected next year, and how does that compare to this year? - Management expects 17 re-deliveries next year compared to 7 this year, emphasizing the importance of managing capacity in line with consumer demand [42] Question: What is the expected RASM uplift from new initiatives? - Management expects a positive year-over-year impact on RASM from new products starting in 2026, with specific targets to be communicated in future guidance [46] Question: How will the customer mix diversification impact costs? - Management assured that broadening the customer base will not significantly impact costs or complexity, maintaining a low-cost model [48] Question: What is the outlook for grounded aircraft and AOGs? - Management anticipates an average of 32-33 grounded aircraft next year, with a goal of no material impacts from AOGs by the end of 2027 [57][71] Question: What is the expected CapEx for 2026 compared to 2025? - Management indicated that CapEx for 2026 is expected to be higher than the $250 million planned for 2025 due to maintenance and re-delivery investments [61]