A look at 1Q results in Latin America

Let’s take a look at 1Q results in Latin America. We will review the results of the top three Mexican carriers, Volaris, Viva Aerobus, Aeromexico, and Brazil’s GOL. Other airlines will publish their financial results in the next few weeks, and we will continue to address them. Viva Aerobus Viva Aerobus posted a US$30 million net loss during the quarter. Total operating revenues increased 104 percent to 5.3 billion MXN during the quarter compared to 2021, reflecting higher unit revenues per passenger, load factor recovery, and capacity growth. Operating expenses were 5.7 billion MXN, driven by a higher jet fuel consumption and an increase of 84 percent in jet fuel prices. The Mexican ultra-low-cost carrier handled 4.2 million passengers, with an 83.3 percent load factor. That’s 77 percent more passengers compared to the 2019 first quarter. Juan Carlos Zuazua, Chief Executive Officer, commented: “Our first-quarter performance reflects our relentless focus on maintaining a disciplined approach towards capacity, effective revenue management initiatives to respond to rapidly changing macroeconomic trends, and the flexibility of our ultra-low-cost business model.” Aeromexico During the quarter, Aeromexico had total revenue worth 12.9 billion MXN (about US$630 million). The airline posted a net loss of three billion pesos (US$146 million). Nonetheless, Aeromexico emerged from Chapter 11 the past quarter, the highlight for the company. Aeromexico carried 4.1 million passengers, still 18% below 2019 levels. The airline management said: “The industry continues recovering, getting steadily closer to pre-pandemic levels. During the quarter, Aeromexico ASKs (Available Seat-Kilometer) represented 80% of the same period of 2019, mainly driven by the full recovery of the domestic market and the sequential recovery in international markets.” Volaris The Mexican ultra-low-cost carrier Volaris began 2022 with a net loss of US$49 million due to the impact of the rising fuel prices and the low season in Mexico. Overall, Volaris had total operating revenues worth US$567 million, an 80% increase compared to 2021’s first quarter. Operating expenses were US$598 million. The airline carried 6.9 million passengers in the quarter. Volaris generated US$9 million in cash and closed the quarter with a liquidity of US$750 million, representing 31 percent of the last twelve months of operating revenue. Enrique Beltranena, President and Chief Executive Officer at Volaris, said: “2022 started with sharply rising fuels and a new surge in COVID cases. Strong demand trends remained, however, and we are observing less and less of a disruption in demand from new COVID cases and customers recognizing Volaris’ reliability.” GOL We left the best for last. GOL posted its best operational results since the beginning of the pandemic, with a 5.6 percent EBIT margin and 16.8 percent EBITDA margin. The airline’s net income totaled 2.6 billion reais (about US$527 million) due to a heavy increase in sales (60 percent in March compared to pre-pandemic levels, for example). GOL carried 6.7 million passengers during the quarter, which was equivalent to 73.4 percent of 2019 levels. Nonetheless, sales grew heavily due to the ongoing demand growth in the corporate segment. Beginning on March 27th, key changes have taken place in GOL’s network to support the robust recovery in the corporate segment. The Company increased the offer by 30 percent at Congonhas airport and 100% in Curitiba. The GOL hub in Salvador launched 10 new destinations: Belém, Cuiabá, Curitiba, Florianópolis, Goiânia, Palmas, Porto Alegre, Recife, São Luis and Campinas, representing a 33 percent growth in departures as compared to 1Q19. Celso Ferrer, GOL’s COO, said: “We strongly believe that this new network, carefully studied in recent months and being implemented as we speak, will position us to support ongoing demand growth – particularly in the corporate segment. Our single fleet is a unique competitive advantage, as it ensures us greater flexibility for rapid adjustments to our network.”

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