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- **Resilient performance**: Q3 2025 EBITDA margin of 33.6% vs. 32-33% full-year target, despite 7.7% TRASM decline
- **Demand recovery**: Cross-border bookings improving sequentially, with Q4 2025 traffic tracking above 2024 levels
- **Fleet flexibility**: 2026 ASM growth of 6-8% achievable through 17 aircraft redeliveries and 12 new deliveries
- **Cost discipline**: CASM ex-fuel maintained at $0.0548 despite 4.6% ASM growth
- **Growth catalysts**: New loyalty program, ancillary product expansion, and improved booking curves for 2026

**【CEO Summary Section】**
- Volaris reported Q3 2025 revenue of $784 million, down 4% YoY, driven by a 7.7% YoY decline in TRASM ($0.0865) due to macroeconomic headwinds. 
- Domestic load factor reached 89.8% (flat YoY) in a rationalized supply environment, while international load factor was 77% reflecting yield-focused capacity management.
- Reaffirmed full-year 2025 EBITDAR margin guidance of 32-33% and 7% ASM growth, with 2026 ASM growth targeted at 6-8% based on demand trends.
- Highlighted disciplined fleet management with 17 aircraft redeliveries in 2026 and plans to narrow productive/non-productive fleet gap.
- Launched new loyalty program (Altitude) and expanded ancillary revenue streams, with ancillary revenue per passenger at $56 (8th consecutive quarter above $50).

**【CFO Financial Commentary】**
- Q3 2025 financials: 
  - CASM ex-fuel: $0.0548 (flat YoY)
  - EBITDA: $264M (33.6% margin)
  - Net profit: $6M (EPS $0.05)
- Cash flow from operations: $205M
- 2025 CapEx: $250M (net of PDPs)
- Fleet plan: 122 aircraft on order (84% A321neos), with flexibility to adjust delivery schedule
- 2026 outlook: 8% YoY ASM growth, TRASM $0.093, CASM ex-fuel $0.0575, EBITDA margin 36%

**【Q&A Key Highlights】**
- **Cross-border demand recovery**: Q3 booking trends show sequential improvement, with August sales above 2024 levels
- **Fleet management**: 17 aircraft redeliveries in 2026 vs. 7 in 2025; targeting 25-27 AOGs by end-2026, with engine-related AOGs near zero by mid-2027
- **Ancillary growth**: New products (Premium Plus, NDC distribution) expected to contribute to TRASM in 2026
- **Cost control**: CASM ex-fuel guidance maintained despite 4.6% ASM growth below 6% target
- **Loyalty program**: Altitude enrollment ahead of expectations, with co-branded credit card integration planned for 2026

Controladora Vuela Compañía de Aviación, S.A.B. de C.V. (VLRS) Q3 2025 Earnings Call Transcript

- **Resilient Q2 Performance**: 28% EBITDAR margin, TRASM $0.078, ancillary revenue $54/passenger (50% of total revenue).
- **Guidance Update**: Full year EBITDA margin 32-33%, 2026 ASM growth mid-single digits with 3% flexibility.
- **Demand Recovery**: Cross-border traffic improving, summer bookings strong, 75% of travelers plan to fly within 6 months.
- **Cost Discipline**: CASM ex-fuel $0.0569, liquidity $788M (26% of LTM revenue), net debt/EBITDA 2.9x.
- **Strategic Initiatives**: Altitude loyalty program, unbundled airport fees, codeshare partnerships with Copa, Iberia, Hainan.

**【CEO Summary Section】**
- Volaris delivered Q2 2025 results ahead of guidance, achieving a 28% EBITDAR margin, near the top of the North American airline industry.
- TRASM of $0.078 exceeded forecasts, driven by tactical capacity adjustments and demand stimulation. Ancillary revenue per passenger reached $54, accounting for over 50% of total operating revenue.
- Domestic load factor recovered to 88% by quarter-end, while international load factor moderated at 75% as the company prioritized yield expansion.
- Full year EBITDA margin guidance updated to 32-33%, reflecting sequential improvement in the second half. 2026 ASM growth targeted at mid-single digits with 3% flexibility up/down.
- Sentiment surveys indicate 75% of travelers plan to fly within 6 months, despite near-term hesitancy linked to immigration rhetoric.

**【CFO Financial Commentary】**
- Q2 2025 total operating revenue: $693M (-5% YoY). CASM ex-fuel: $0.0569 (+7% YoY) due to lower-than-planned ASMs.
- EBITDAR: $194M (28% margin), above guidance. Net loss: $63M (-$0.55 per ADS).
- Full year 2025 guidance: ASM growth 7% YoY, EBITDAR margin 32-33%, CapEx $250M.
- Q3 2025 outlook: ASM +6% YoY, TRASM $0.086, CASM ex-fuel $0.055, EBITDAR margin 32-33%.
- Liquidity: $788M (26% of LTM revenue). Net debt/EBITDA: 2.9x, expected peak in Q3 before gradual improvement.

**【Q&A Key Highlights】**
- **Demand Trends**: Sequential improvement in Q2, with cross-border traffic poised to recover post-volatility. Summer bookings strong, driven by close-in bookings and VFR travel resumption.
- **Loyalty Program (Altitude)**: Launched to target non-VFR segments. 30% of bookings include membership products. No material financial impact in 2025; scaling focus.
- **Engine Availability**: 36 aircraft grounded in Q2, expected to remain stable. Fleet flexibility enables 3% ASM adjustments.
- **World Cup 2026**: Operates in 10 of 16 host cities. Monitoring demand for potential external lift.
- **Competitive Environment**: Industry rationalizing capacity, Volaris leading in cash-positive flying.
- **Fuel Hedging**: 40% of July/August consumption hedged at $2.15/gallon.


Controladora Vuela Compañía de Aviación, S.A.B. de C.V. (VLRS) Q2 2025 Earnings Conference Call Transcript

- **Capacity Moderation**: Full-year 2025 ASM growth target reduced to 8-9% to align with demand trends.
- **Ancillary Dominance**: Ancillary revenue >50% of total, resilient to fare pressure.
- **Operational Resilience**: 83.8% on-time performance and 39% Net Promoter Score highlight customer satisfaction.
- **Financial Flexibility**: $862M liquidity and 2.7x net debt/EBITDA ratio support navigating uncertainty.
- **Strategic Partnerships**: New codeshare with Copa Airlines expands Latin America connectivity.


**【CEO Opening Remarks】**
- Volaris delivered Q1 2025 results despite geopolitical volatility, with ASM growth of 6% YoY and load factor of 85.4%.
- Targeting full-year 2025 ASM growth of 8-9% (down from 13-15%), reflecting capacity moderation to align with demand trends.
- Emphasized ultra-low-cost carrier (ULCC) model, with ancillary revenue accounting for >50% of total revenue.
- On-time performance of 83.8% and Net Promoter Score of 39% highlight operational resilience.

**【CFO Financial Highlights】**
- Q1 2025 total operating revenue: $678M (-12% YoY) due to MXN depreciation and lower revenue per passenger.
- CASM ex-fuel: $0.54 (+5% YoY), CASM: $0.0788 (-3% YoY) driven by fuel cost decline.
- EBITDA loss of $10M (margin: -1.5%), EBITDA of $203M (-14% YoY) due to weaker MXN and one-time benefits in Q1 2024.
- Liquidity: $862M (28% of LTM operating revenue), net debt/EBITDA: 2.7x.

**【Operations & Network Adjustments】**
- Q1 TRASM: $0.078 (-17% YoY), impacted by fare stimulation and MXN depreciation.
- Ancillary revenue per passenger: $53 (6th consecutive quarter above $50 threshold).
- New codeshare with Copa Airlines to expand connectivity between Mexico and Latin America.
- Testing new leisure routes (e.g., Ontario- Los Cabos) with encouraging early results.
- Capacity adjustments concentrated in low-demand periods to optimize network efficiency.

**【Q&A Key Takeaways】**
- TRASM decline expected to stabilize in Q2, with sequential improvement in H2 2025.
- No plans for share buybacks; prioritizing cash preservation and debt reduction.
- Fuel costs higher in Tijuana and Guadalajara compared to Mexico City.
- Competitors also moderating capacity, supporting TRASM recovery.
- Fleet flexibility allows rapid response to demand changes, with 70% variable/semi-fixed costs.


Controladora Vuela Compañía de Aviación, S.A.B. de C.V. (VLRS) Q1 2025 Earnings Call Transcript

- **Resilient 2024 Performance**: 36% EBITDAR margin, $126M net profit, and 99.5% schedule reliability despite 30% fleet capacity reduction.
- **Ancillary Growth**: Ancillaries now 52% of revenue, with record $57/ passenger in Q4.
- **2025 Outlook**: 13% ASM growth, EBITDAR margin 34-36%, and CASM ex-fuel $0.055-0.056.
- **Challenges**: 15% RASM decline in Q1 2025 due to US-Mexico VFR weakness, FX, and Easter shift.
- **Fleet Modernization**: 90% NEO fleet by 2030, reducing ownership costs and improving unit economics.

**【CEO Summary Section】**
- 2024 was a remarkable year with net profit each quarter and a full-year EBITDAR margin of 36%, despite challenges from GTF engine inspections and aircraft groundings.
- Mitigation strategies included operational reliability, disciplined capacity growth, and focus on core markets. Ancillary revenues now account for over 50% of total revenue.
- Operational highlights: 99.5% scheduled reliability, 83% on-time performance, and a Net Promoter Score of 37.4%.
- Fleet modernization: 15 out of 144 aircraft delivered from Indigo orders, with 90% NEO fleet by 2030.
- 2025 capacity growth of 13%, below 2023 levels, with focus on return on investment and core market defense.

**【CFO Financial Commentary】**
- Full-year 2024: $126 million net profit, 13% EBIT margin, 36% EBITDAR margin, $300 million operating cash flow, and $954 million liquidity.
- CASM ex-fuel increased 17% to $0.0568 due to maintenance costs, but fuel costs dropped 20% to $2.51/gallon.
- 2025 guidance: EBITDAR margin 34-36%, ASM growth 13%, CASM ex-fuel $0.055-0.056, and $250 million CapEx.
- One-time $100 million cost for 2025 engine redelivery expenses.

**【Q&A Highlights】**
- **RASM Decline**: 15% YoY drop in Q1 2025 due to US-Mexico VFR traffic softness, FX weakness, and Easter shift. Cross-border demand cautious post-US elections.
- **CASM Outlook**: 2025 CASM ex-fuel expected to match 2024 levels, with Q1 CASM ex-fuel $0.055-0.056.
- **Aircraft on Ground**: Average 30 aircraft in 2025, similar to 2024, with ongoing Pratt & Whitney engine shop visits.
- **Capital Deployment**: Long-term focus on fleet modernization; buybacks/dividends limited by legal restrictions.
- **FX Impact**: 20% MXN depreciation affecting US travel affordability, but 50% revenue collection in USD mitigates risk.

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