In 2021, the Mexican low-cost carrier Volaris increased its operating revenues by 30%, showing incredible resilience, as Volaris emerged strongly from the COVID-19 pandemic. Moreover, Volaris finished last year with a net income worth MXN$2,121 billion (over US$103 million).
Volaris’ increase of its operating revenues
Last year was, arguably, the best of Volaris’ history. The airline had record traffic numbers as it carried over 24.4 million passengers, increasing by 11% of its pre-pandemic traffic stats, despite the COVID-19 pandemic still impacting the aviation and tourism industry worldwide.
Volaris posted record numbers in almost every metric for its full-year 2021 financial and operations highlights. Take a look at these stats:
- Volaris recorded MXN$44,662 billion in total operating revenue (about US$2.1 billion), a 29% increase compared to 2019.
- The airline’s TRASM was 161 Mexican cents, a 13% increase compared to 2019.
- Capacity measured in ASMs increased by 15%.
- Load factor, though, fell 1.2 pp from 85.9 to 84.7%.
- Net income for Volaris was MXN$2,121 billion (over US$103 million), a 20% decrease compared to 2019.
- Volaris’ EBIT margin increased by 5.5 pp to 18.1%. Similarly, EBITDAR Margin increased by 5.9% to 36.7%.
Enrique Beltranena, Volaris’ CEO, said,
“In 2021, despite the demand uncertainty associated with COVID-19, we were able to report a strong performance. This highlights our teams’ ability to manage and adapt to changing market dynamics. Going forward, we will continue to focus on executing our growth strategy. This centers upon catering to the travel demands of a large, growing middle class in Mexico, focusing on longer-haul bus substitution and growth in our international markets. Our resilient ultra-low-cost business model positions us well for success in these markets.”
Ancillary revenues, the recipe for success
Last year, Volaris’ average fare was MXN$1,125 (approximately US$55), a decrease of 2% compared to the pre-pandemic levels.
Nonetheless, Volaris operating revenues keep soaring due to a 45% increase in ancillary revenues per passenger. On average, each passenger spent MXN$810 (nearly US$40) on additional services, such as first baggage, seat selection, and more flexibility. By the end of the year, ancillary revenue represented 42% of Volaris’ total operating revenue, compared to 33% in the same period of 2019.
What to expect in 2022?
This year, Volaris expects to continue with its growth strategy. Moreover, unless there’s a new disruption related to the COVID-19 crisis or other macroeconomics impacts, Volaris expects to grow capacity in the mid-twenties compared to 2021, which would be an incredible number.
Volaris expects total operating revenues to be in the range of US$2.6 to US$2.8 billion.
In terms of fleet, Volaris closed the year with 101 aircraft (six A319, 79 A320s, and 16 A321s) with an average age of 5.4 years. During the year, Volaris signed a new purchase order with Airbus for 39 A321neo aircraft, which will arrive in the second half of the decade.
In 2022, Volaris plans to end the year with approximately 115 aircraft. The Mexican low-cost carrier is looking to have a 100% Airbus A320neo and A321neo fleet by 2028.
Daniel Martínez Garbuno is a Mexican journalist. He has specialized in the air industry working mainly for A21, a Mexican media outlet focused entirely on the aviation world. He has also published on other sites like Simple Flying, Roads & Kingdoms, Proceso, El Economista, Buzos de la Noticia, Contenido, and Notimex.