Diving Into Volaris & Viva Aerobus’ Financial Results

The two Mexican ultra-low-cost carriers, Volaris and Viva Aerobus, have released their 2023 third quarter financial results. The first remains the country’s top carrier with over 25 million passengers throughout the year but posted a $39 million net loss during the period, while the second has totaled 18.2 million passengers in the year so far and had a $56 million net income in the third quarter. Volaris’ results In the period between July and September 2023, Volaris had total operating revenues of $848 million, a 10% increase versus the same period last year. Enrique Beltranena, the airline’s President and Chief Executive Officer, said the performance showed resilience and resulted in revenue growth. Nonetheless, Volaris posted a $39 million net loss in the period. Throughout the year, Volaris has had a $104 million net loss. [caption id="attachment_78646" align="alignnone" width="580"] Photo: Daniel Martínez Garbuno.[/caption] Volaris has been impacted by Pratt & Whitney’s GTF engine issues and inspections. The airline explained, “We are actively addressing the global issue of engine inspections affecting multiple airlines and are working closely with Pratt & Whitney to obtain the necessary technical support and financial compensation for the affected engines.” Volaris said it has developed a mitigation plan to offset the impact partially. The company’s focus for 2024 will be to maximize unit revenues and margins while optimizing the network. In the third quarter, Volaris registered 8.7 million booked passengers, an increase of 7% versus the previous year. The company has had over 25 million passengers in 2023, and it is set to break last year’s record of 31 million passengers. Viva Aerobus results During the third quarter of 2023, Viva Aerobus had total operating revenue increases of 44.8% versus the same period last year. It obtained $571 million, reflecting higher unit revenues, healthy load factors, and capacity growth. The company registered fare and ancillary revenue growth. Ancillary revenue represented 44.4% of total revenues. During the quarter, Viva’s total passengers increased 25.6% to 6.9 million due to higher demand both in the domestic and international markets. Throughout the year, the company has had 18.2 million passengers, the third largest airline in Mexico behind Volaris and Grupo Aeromexico. The airline’s load factor has been 86.8% (88.1% in domestic travel and 80.6% in international travel). At the end of the third quarter, Viva Aerobus registered a $56 million net profit for the period. In the first three quarters of the year, the ultra-low-cost carrier had total operating revenue worth $1.37 billion, a 35.2% increase versus the previous year. The company had a net income worth 44.54 million so far in the year. Viva Aerobus closed the period with a cash flow in cash and cash equivalents of $758 million. Viva Aerobus was also impacted by Pratt & Whitney’s issues. The company expects the off-wing inspections to start in early 2024 and persist throughout 2025, putting further pressure on the aviation industry overall, including Viva’s operation. “Meanwhile, we seek to partially offset the impact in 2024 through new aircraft arrivals, some lease extensions, and short-term leases in a very tight leasing market.”

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