troladora Vuela pania de Aviacion(VLRS) - 2025 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - In Q4 2025, total operating revenues reached $882 million, a 5.6% increase compared to the same quarter in 2024, driven by a recovery in cross-border travel and diversification of revenues [20][21] - The full-year total operating revenues for 2025 were $3 billion, reflecting a 3% decrease from 2024 [24] - EBITDA for Q4 was $328 million with a margin of 37.2%, while full-year EBITDA totaled $988 million, a 13% decrease with an EBITDA margin of 32.5% [24][25] - CASM (Cost per Available Seat Mile) was $0.0829, a 3.2% increase, while CASM ex-fuel was $0.0576, up 1.4% year-over-year [22] Business Line Data and Key Metrics Changes - Ancillary revenues comprised 56% of total operating revenues, indicating a strong performance in this area [4] - The international load factor reached 79% in Q4, up from 77.5% in the first nine months of the year, while the domestic load factor was 89.8% [5][12] Market Data and Key Metrics Changes - The cross-border market showed stable recovery, with improved travel sentiment and positive results from capacity deployment [5][12] - The company plans to allocate most of its incremental capacity to international markets, which now represent approximately 42% of total capacity [19] Company Strategy and Development Direction - The company aims to stimulate demand through its low-fare model, focusing on profitable growth and capital efficiency [6] - A proposed airline group with Viva is expected to enhance access to low-fare travel in domestic and cross-border markets while preserving brand identity [9][10] - The company anticipates a 7% ASM (Available Seat Mile) growth for 2026, with a focus on disciplined capacity deployment [6][31] Management's Comments on Operating Environment and Future Outlook - Management noted that the Mexican economy is showing signs of improvement, with better-than-expected inflation and recovery in consumption trends [6] - The company expects to see a reduction in grounded aircraft and improved fleet productivity as it moves into 2026 [30] Other Important Information - The company ended Q4 with a liquidity position of $774 million, representing 25.5% of the last twelve months' total operating revenues [26] - The average age of the fleet is 6.6 years, with 66% being fuel-efficient newer models [27] Q&A Session Summary Question: What were the key drivers behind the reported tax rate of 89% in the quarter? - The tax rate reflects the application of the actual tax rate for the year, with an effective tax rate of 11.8% for the full year [42][43] Question: How should the 7% capacity growth for 2026 be viewed in terms of domestic versus international mix? - The capacity growth will be skewed towards international markets, with domestic growth expected to be in the low to mid-single digits [45][46] Question: What does the flat fleet count through 2030 mean for multi-year capacity growth and potential CapEx? - The company expects to grow capacity by 7% over the next five years, with growth coming from unproductive fleet being put into service [49][50]