Volaris Reports Second Quarter 2020 Results: Robust Liquidity Preservation Plan with Minimal Cash Burn, End Cash Balance of Ps.10 Billion

MEXICO CITY, July 27, 2020 /PRNewswire/ — Volaris* (NYSE: VLRS and BMV: VOLAR), the ultra-low-cost airline serving Mexico, the United…

MEXICO CITY, July 27, 2020 /PRNewswire/ — Volaris* (NYSE: VLRS and BMV: VOLAR), the ultra-low-cost airline serving Mexico, the United States and Central America, today announces its financial results for the second quarter 2020.

The following financial information, unless otherwise indicated, is presented in accordance with the International Financial Reporting Standards (IFRS).

Second Quarter 2020 Highlights

During the second quarter 2020, the Company carefully managed its capacity, measured by available seat miles (ASMs), in response to the decline in demand for air travel due to the virus SARS-CoV-2 (COVID-19).

In April, 2020 the Company announced that pursuant to a decree published in the Official Gazette of the Federation, the Government of the United Mexican States, acting through the General Health Council (Consejo de Salubridad General (“GHC”)) declared a health emergency due to force majeure, as a result of the disease pandemic caused by the COVID-19, which would be in effect until new notification (the “Declaration of Emergency”).

The Declaration of Emergency and the health security measures announced by the GHC, such as the suspension of non-essential activities in the public, private and social sector, as well as the call to the population to comply with stay at home, impacted the demand for passenger air transportation.

The second quarter of 2020 was characterized by three very different months: in April and May, the fall in demand required significant capacity cuts. In April, Volaris operated 18% ASMs vs the same period in 2019 and in May this fell still further to 12%. This trend was reversed in June, when Volaris operated 41% ASMs compared to those operated in the same period in 2019. This was a ramp-up of more than 234% compared to May 2020, taking advantage of the early signs of recovery particularly in the domestic market and the ramp-up was significantly faster than our domestic competitors. The domestic market held up better than the international markets and Central America remained closed altogether.

For the ramp-up in June and further into the third quarter, Volaris has taken a breadth over depth approach to network recovery, focusing on marginal contribution of flights. By end of June 2020 service re-started in 49% of domestic routes and 22% of US markets, albeit both at a lower frequency vs. 2019.

The main effects of the reductions and the gradual recovery of demand and capacity at the end of the second quarter, are described as follows:

  • Total operating revenues were Ps.1,526 million for the second quarter, a decrease of 81.7% year over year.
  • Total ancillary revenues were Ps.711 million for the second quarter, a decrease of 75.5% year over year. Total ancillary revenues per passenger for the second quarter reached Ps.644, an increase of 25.2% year over year. Total ancillary revenues represented 46.6% of total operating revenues for the second quarter 2020, increasing 11.7 percentage points with respect to the same period of last year.
  • Total operating revenues per available seat mile (TRASM) were Ps.108.9 cents for the second quarter, a decrease of 19.7% year over year.
  • Operating expenses per available seat mile (CASM) were Ps.274.4 cents for the second quarter, an increase of more than 100% year over year; with an average economic fuel cost per gallon of Ps.43.8 for the second quarter, a decrease of 10.4% year over year.
  • Operating expenses per available seat mile excluding fuel, (CASM ex fuel) reached Ps.234.3 cents for the second quarter, an increase of more than 100% year over year; with an average exchange rate depreciation of the Mexican peso against the U.S. dollar of 22.2% year over year.
  • Operating loss was Ps.2,347 million for the second quarter, a significant decrease compared with the operating income of Ps.659 million for the same period of last year. Operating margin for the second quarter was (153.8%), a deterioration of (161.7) percentage points year over year.
  • Net loss was Ps.1,644 million (Ps.1.62 loss per share / U.S.$0.71 loss per ADS), giving a negative net margin of (107.7%) for the second quarter.
  • At the close of the second quarter, the Mexican peso appreciated 2.3% against the U.S. dollar (Ps.22.97 per U.S. dollar) with respect to the exchange rate at the close of the previous quarter (Ps.23.51 per U.S. dollar). The Company booked a net foreign exchange gain of Ps.1,109 million derived from our U.S. dollar net monetary liability position.
  • During the second quarter of 2020, the net cash flow generated by operating activities was Ps.584 million. The net cash flow generated by investing activities reached Ps.71 million. The net cash flow used in financing activities was Ps.1,179 million, which included Ps.806 million of aircraft rental payments. The negative net foreign exchange difference was Ps.120 million, thus leading to a net decrease of cash and cash equivalents in the second quarter of Ps.644 million. As of June 30, 2020, cash and cash equivalents were Ps.10,013 million.

Fuel Price reduction and Peso Depreciation

  • Fuel price reduction: The average economic fuel cost per gallon decreased 10.4% in the second quarter of 2020, year over year, reaching Ps.43.8 per gallon (U.S.$1.9).
  • Peso depreciation: The Mexican peso depreciated 22.2% against the U.S. dollar year over year, from an average exchange rate of Ps.19.12 per U.S. dollar in the second quarter of 2019 to Ps.23.37 per U.S. dollar during the second quarter of 2020. At the end of the second quarter of 2020, the Mexican peso (Ps.22.97 per U.S. dollar) depreciated 19.8% with respect to the exchange rate at the end of the same period of the last year (Ps.19.17 per U.S. dollar).

Passenger Traffic Contraction, Ancillary Revenue Expansion, and TRASM decrease

  • Passenger traffic contraction: Volaris had 1.1 million passengers booked in the second quarter of 2020, a decrease of 80.5% year over year. Volaris traffic (measured in terms of revenue passenger miles, or RPMs) decreased 78.8% year over year. System load factor during the second quarter decreased 8.1 percentage points year over year to a level of 79.2%.
  • Total ancillary revenue reduction: For the second quarter of 2020, total ancillary revenue decreased 75.5% year over year. Total ancillary revenue per passenger in the second quarter of 2020 increased 25.2% year over year. The total ancillary revenue generation continues to grow with new and mature products, appealing to customers’ needs, representing 46.6% of total operating revenue of the second quarter, an increase of 11.7 percentage points year over year.
  • TRASM decrease: For the second quarter of 2020, TRASM decreased 19.7% year over year. During the second quarter of 2020, the total capacity, in terms of ASMs, decreased 76.6% year over year.

Total Unit Cost Raise and Peso depreciation 

  • CASM and CASM ex fuel in the second quarter of 2020 reached Ps.274.4 (U.S.$11.94 cents) and Ps.234.3 cents (U.S.$10.20), respectively. This represented an increase of more than 100% for CASM and CASM ex fuel, year over year; mainly driven by the capacity reduction as measured by available seat miles (ASMs), and the average exchange rate depreciation of the Mexican peso against the U.S. dollar of 22.2%.

Young and Fuel-Efficient Consumption Fleet

  • During the second quarter of 2020, the Company returned one A319 aircraft and incorporated one A320 NEO aircraft to its fleet. As of June 30, 2020, Volaris’ fleet comprised 82 aircraft (7 A319s, 59 A320s and 16 A321s), with an average age of 5.4 years. At the end of the second quarter of 2020, Volaris’ fleet had an average of 187 seats per aircraft, 76% of our aircraft were sharklet-equipped, and 29% were NEO.

Liquidity Preservation Plan with a Net Cash Flow Generated by Operating Activities

  • Since the COVID-19 contingency started, the Company´s main objective has been to preserve the liquidity position. The Company implemented a “liquidity preservation plan” which achieved a total of $6.1 billion pesos or $266 million in US dollar terms through payment deferrals and cost reductions for 2020. Around $1.6 billion pesos ($61 million dollars) were deferred to 2021. Specifically, for the second quarter, our liquidity preservation plan brought $2.2 billion pesos in benefits; of which $357 million pesos were cost avoidance.
  • During the second quarter of 2020, the net cash flow generated by operating activities was Ps.584 million. The net cash flow generated by investing activities reached Ps.71 million. The net cash flow used in financing activities was Ps.1,179 million, which included Ps.806 million of aircraft rental payments. The negative net foreign exchange difference was Ps.120 million, thus having a net decrease of cash and cash equivalents in the second quarter of Ps.644 million. As of June 30, 2020, cash and cash equivalents were Ps.10,013 million, representing 35.0% of last twelve months of the operating revenue. Volaris registered a negative net debt (or a positive net cash position) of Ps.4,568 million (excluding lease liability recognized under the IFRS16 adoption).

Non derivatives financial instruments

  • During 2019, the Company established hedges on its U.S. dollar denominated revenues through a non-derivative financial instrument, using the lease liabilities denominated in U.S. dollar as a hedge instrument. This hedging relationship was designated as a cash flow hedge of forecasted revenues to mitigate the volatility of the foreign exchange variation arising from the revaluation of the lease liabilities. During the second quarter 2020, the impact of these hedges was Ps.39 million, which has been presented as part of the total operating revenue.
  • Additionally, during 2019, the Company established hedges on a portion of its forecasted fuel expense, through a non-derivative financial instrument, using as a hedge instrument a portion of its U.S. dollar denominated monetary assets. This hedging relationship was designated as a cash flow hedge of forecasted fuel expense to mitigate the volatility of the foreign exchange variation arising from the revaluation of this portion of U.S. dollar denominated monetary asset. During the second quarter 2020, the impact of these hedges was Ps.71 million, which has been presented as part of the total fuel expense.
  • For the hedging relationships described, the effective portion of the hedging instrument’s change in fair value is recognized in Other Comprehensive Income or OCI. The accounting records corresponding to the recycling of the OCI are made in accordance with IFRS 9. Under this Standard, the portion recorded in OCI is recognized in the results in the same period in which the expected hedging for cash flows affect the result of the period. As of June 30, 2020, OCI includes a negative foreign exchange effect of Ps.5,847 million. As of December 31, 2019, OCI includes a positive foreign exchange effect of Ps.14 million.

Investors are urged to carefully read the Company’s periodic reports filed with or provided to the Securities and Exchange Commission, for additional information regarding the Company.

Conference Call/Webcast Details:

Presenters for the Company:

 

 

Mr. Enrique Beltranena, President & CEO

Mr. Holger Blankenstein, Airline  Commercial and Operation EVP

Mr. Jaime Pous,  Senior Vice President Chief Legal Officer and Corporate Affairs and Interim CFO

Date:

Monday, July 27, 2020

Time:

10:00 am U.S. EDT (9:00 am Mexico City Time)

United States dial in (toll free):

1-877-830-2576

Mexico dial in (toll free):

001-800-514-6145

Brazil dial in (toll free):

0800-891-6744

International dial in:

+ 1-785-424-1726

Participant passcode:

VOLARIS

Webcast will be available at:

https://services.choruscall.com/links/vlrs200727iiu07GYo.html

About Volaris:

*Controladora Vuela Compañía de Aviación, S.A.B. de C.V. (“Volaris” or the “Company”) (NYSE: VLRS and BMV: VOLAR), is an ultra-low-cost carrier, with point-to-point operations, serving Mexico, the United States and Central America. Volaris offers low base fares to build its market, providing quality service and extensive customer choice. Since the beginning of operations in March 2006, Volaris has increased its routes from five to more than 96 and its fleet from four to 82 aircraft. Volaris offers more than 229 daily flight segments on routes that connect 39 cities in Mexico and 15 cities in the United States and Central America with the youngest fleet in Mexico. Volaris targets passengers who are visiting friends and relatives, cost-conscious business and leisure travelers in Mexico, the United States and Central America. Volaris has received the ESR Award for Social Corporate Responsibility for eleven consecutive years. For more information, please visit: www.volaris.com.

Forward-looking Statements:

Statements in this release contain various forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which represent the Company’s expectations, beliefs or projections concerning future events and financial trends affecting the financial condition of our business. When used in this release, the words “expects,” “intends,” “estimates,” “predicts,” “plans,” “anticipates,” “indicates,” “believes,” “forecast,” “guidance,” “potential,” “outlook,” “may,” “continue,” “will,” “should,” “seeks,” “targets” and similar expressions are intended to identify forward-looking statements. Similarly, statements that describe the Company’s objectives, plans or goals, or actions the Company may take in the future, are forward-looking statements. Forward-looking statements include, without limitation, statements regarding the Company’s intentions and expectations regarding the delivery schedule of aircraft on order, announced new service routes and customer savings programs. Forward-looking statements should not be read as a guarantee or assurance of future performance or results and will not necessarily be accurate indications of the times at, or by, which such performance or results will be achieved.  Forward-looking statements are based on information available at the time those statements are made and/or management’s good faith belief as of that time with respect to future events and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements. Forward-looking statements are subject to a number of factors that could cause the Company’s actual results to differ materially from the Company’s expectations, including the competitive environment in the airline industry; the Company’s ability to keep costs low; changes in fuel costs; the impact of worldwide economic conditions on customer travel behavior; the Company’s ability to generate non-ticket revenues; and government regulation. Additional information concerning these, and other factors is contained in the Company’s Securities and Exchange Commission filings. All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements set forth above.  Forward-looking statements speak only as of the date of this release.  You should not put undue reliance on any forward-looking statements.  We assume no obligation to update forward-looking statements to reflect actual results, changes in assumptions or changes in other factors affecting forward-looking information, except to the extent required by applicable law.  If we update one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect to those or other forward-looking statements.

 

 


Controladora Vuela Compañía de Aviación, S.A.B. de C.V. and Subsidiaries

Financial and Operating Indicators






Unaudited

 

Three months ended

June 30, 2020

Three months ended June 30, 2020

 

Three months ended June 30, 2019

Variance

(In Mexican pesos, except otherwise indicated)

(US Dollars)*

(%)

Total operating revenues (millions)

66

1,526

8,329

(81.7%)

Total operating expenses (millions)

169

3,873

7,670

(49.5%)

EBIT (millions)

(102)

(2,347)

659

NA

EBIT margin

(153.8%)

(153.8%)

7.9%

(161.7) pp

Depreciation and amortization

63

1,451

1,335

8.7%

Aircraft and engine variable lease expenses

19

426

316

34.9%

Net (loss) income (millions)

(72)

(1,644)

119

NA

Net (loss) income margin

(107.7%)

(107.7%)

1.4%

(109.1) pp

(Loss) income per share:





Basic (pesos)

(0.07)

(1.62)

0.12

NA

Diluted (pesos)

(0.07)

(1.62)

0.12

NA

(Loss) income per ADS:





Basic (pesos)

(0.71)

(16.24)

1.18

NA

Diluted (pesos)

(0.71)

(16.24)

1.18

NA

Weighted average shares outstanding:





Basic

1,011,876,677

1,011,876,677

0.0%

Diluted

1,011,876,677

1,011,876,677

0.0%

Available seat miles (ASMs) (millions) (1)

1,437

6,154

(76.6%)

     Domestic

1,202

4,250

(71.7%)

     International

235

1,904

(87.7%)

Revenue passenger miles (RPMs) (millions) (1)

1,138

5,370

(78.8%)

     Domestic

936

3,812

(75.4%)

     International

202

1,558

(87.0%)

Load factor (2) 

79.2%

87.3%

(8.1) pp

     Domestic

77.8%

89.7%

(11.9) pp

     International

86.3%

81.9%

4.4 pp

Total operating revenue per ASM (TRASM) (cents) (1) (5)  

4.7

108.9

135.5

(19.7%)

Total ancillary revenue per passenger (4) (5)

28.0

644

514

25.2%

Total operating revenue per passenger (5)

61.7

1,417

1,475

(4.0%)

Operating expenses per ASM (CASM) (cents) (1) (5)

11.94

274.4

124.9

>100%

Operating expenses per ASM (CASM) (US cents) (3) (5)

11.74

6.53

79.9%

CASM ex fuel (cents) (1) (5) 

10.20

234.3

74.5

>100%

CASM ex fuel (US cents) (3) (5)

10.03

3.89

>100%

Booked passengers (thousands) (1)

1,105

5,654

(80.5%)

Departures (1)

7,785

34,848

(77.7%)

Block hours (1)

19,472

87,686

(77.8%)

Fuel gallons consumed (millions)

13.1

63.4

(79.3%)

Average economic fuel cost per gallon (5)

1.9

43.8

48.9

(10.4%)

Aircraft at end of period

82

78

5.1%

Average aircraft utilization (block hours)

7.7

13.1

(41.1%)

Average exchange rate

23.37

19.12

22.2%

End of period exchange rate

22.97

19.17

19.8%

*Peso amounts were converted to U.S. dollars at end of period exchange rate for convenience purposes only.

(1) Includes schedule and charter.                                                                    (3) Dollar amounts were converted at average exchange rate of each period.

(2) Includes schedule.                                                                                       (4) Includes “Other passenger revenues” and “Non-passenger revenues”.

(5) Excludes non-derivatives financial instruments.

 

 


Controladora Vuela Compañía de Aviación, S.A.B. de C.V. and Subsidiaries

Financial and Operating Indicators


Unaudited

 

Six months ended

June 30, 2020

Six months ended

June 30, 2020

 

Six months ended

June 30, 2019

Variance

(In Mexican pesos, except otherwise indicated)

(US Dollars)*

(%)

Total operating revenues (millions)

407

9,350

15,522

(39.8%)

Total operating expenses (millions)

496

11,389

14,836

(23.2%)

EBIT (millions)

(89)

(2,039)

685

NA

EBIT margin

(21.8%)

(21.8%)

4.4%

(26.2) pp

Depreciation and amortization

126

2,893

2,627

10.1%

Aircraft and engine variable lease expenses

35

801

543

47.5%

Net (loss) income (millions)

(137)

(3,137)

639

NA

Net (loss) income margin

(33.5%)

(33.5%)

4.1%

(37.6) pp

(Loss) income per share:





Basic (pesos)

(0.13)

(3.10)

0.63

NA

Diluted (pesos)

(0.13)

(3.10)

0.63

NA

(Loss) income per ADS:





Basic (pesos)

(1.35)

(31.00)

6.31

NA

Diluted (pesos)

(1.35)

(31.00)

6.31

NA

Weighted average shares outstanding:





Basic

1,011,876,677

1,011,876,677

0.0%

Diluted

1,011,876,677

1,011,876,677

0.0%

Available seat miles (ASMs) (millions) (1)

7,533

11,858

(36.5%)

     Domestic

5,455

8,221

(33.6%)

     International

2,078

3,637

(42.9%)

Revenue passenger miles (RPMs) (millions) (1)

6,304

10,114

(37.7%)

     Domestic

4,596

7,198

(36.2%)

     International

1,708

2,916

(41.4%)

Load factor (2) 

83.7%

85.3%

(1.6) pp

     Domestic

84.2%

87.6%

(3.4) pp

     International

82.2%

80.3%

1.9 pp

Total operating revenue per ASM (TRASM) (cents) (1) (5)  

5.4

125.0

131.0

(4.6%)

Total ancillary revenue per passenger (4) (5)

25.2

578

515

12.2%

Total operating revenue per passenger (5)

64.2

1,475

1,463

0.8%

Operating expenses per ASM (CASM) (cents) (1) (5)

6.7

152.8

125.2

22.0%

Operating expenses per ASM (CASM) (US cents) (3) (5)

7.1

6.5

8.2%

CASM ex fuel (cents) (1) (5) 

4.8

111.1

76.5

45.3%

CASM ex fuel (US cents) (3) (5)

5.14

3.99

28.9%

Booked passengers (thousands) (1)

6,382

10,617

(39.9%)

Departures (1)

41,446

67,046

(38.2%)

Block hours (1)

106,110

170,534

(37.8%)

Fuel gallons consumed (millions)

75.0

121.7

(38.3%)

Average economic fuel cost per gallon (5)

1.8

41.8

47.5

(12.0%)

Aircraft at end of period

82

78

5.1%

Average aircraft utilization (block hours)

11.4

12.9

(11.6%)

Average exchange rate

21.62

19.17

12.8%

End of period exchange rate

22.97

19.17

19.8%

*Peso amounts were converted to U.S. dollars at end of period exchange rate for convenience purposes only.

(1) Includes schedule and charter.                                                                    (3) Dollar amounts were converted at average exchange rate of each period.

(2) Includes schedule.                                                                                       (4) Includes “Other passenger revenues” and “Non-passenger revenues”.

(5) Excludes non-derivatives financial instruments.

 

 


Controladora Vuela Compañía de Aviación, S.A.B. de C.V. and Subsidiaries

Consolidated Statement of Operations


Unaudited

 

Three months ended

June 30, 2020

Three months ended

June 30, 2020

 

Three months ended

June 30, 2019

Variance

(In millions of Mexican pesos)

(US Dollars) *

(%)

Operating revenues:





Passenger revenues

63

1,436

8,038

(82.1%)

 Fare revenues

37

854

5,431

(84.3%)

 Other passenger revenues

25

582

2,607

(77.7%)






Non-passenger revenues

6

129

302

(57.3%)

 Other non-passenger revenues

4

102

250

(59.1%)

 Cargo

1

27

52

(48.3%)






 Non-derivatives financial instruments

(2)

(39)

(11)

>100%






Total operating revenues

66

1,526

8,329

(81.7%)






Other operating income

(8)

(180)

(123)

46.1%

Depreciation of right of use assets

54

1,240

1,180

5.1%

Salaries and benefits

29

665

887

(25.0%)

Fuel expense, net (1)

22

505

3,087

(83.6%)

Landing, take-off and navigation expenses

19

438

1,188

(63.2%)

Aircraft and engine variable lease expenses

19

426

316

34.9%

Sales, marketing and distribution expenses

8

179

350

(48.8%)

Maintenance expenses

7

166

369

(55.2%)

Other operating expenses

10

224

260

(14.0%)

Depreciation and amortization

9

210

155

35.9%

Operating expenses

169

3,873

7,670

(49.5%)






Operating (loss) income

(102)

(2,347)

659

NA






Finance income

1

27

54

(49.9%)

Finance cost (2)

(50)

(1,137)

(520)

>100%

Exchange gain, net

48

1,109

3

>100%

Comprehensive financing result

(1)

(462)

(99.7%)






(Loss) income before income tax

(102)

(2,348)

197

NA

Income tax benefit (expense)

31

704

(78)

NA

Net (loss) income

(72)

(1,644)

119

NA






* Peso amounts were converted to U.S. dollars at end of period exchange rate for convenience purposes only.

(1) 2Q 2020 and 2Q 2019 figures include a benefit from non-derivatives financial instruments by an amount of Ps.70.5 million and Ps.13.7 million, respectively.

(2) During second quarter 2020, as a result of the capacity reduction due to COVID-19, the Company recorded the ineffective portion related to the derivative financial instruments by an amount of Ps.429 million, which is presented as part of the financial costs.

 

 


Controladora Vuela Compañía de Aviación, S.A.B. de C.V. and Subsidiaries

Consolidated Statement of Operations


Unaudited

 

Six months ended

June 30,
2020

Six months ended

June 30, 2020

 

Six months ended

June 30, 2019

Variance

(%)

(In millions of Mexican pesos)

(US Dollars) *

Operating revenues:





Passenger revenues

391

8,984

15,015

(40.2%)

 Fare revenues

249

5,727

10,061

(43.1%)

 Other passenger revenues

142

3,257

4,954

(34.3%)






Non-passenger revenues

19

433

518

(16.5%)

 Other non-passenger revenues

15

350

404

(13.5%)

 Cargo

4

83

114

(27.0%)






 Non-derivatives financial instruments

(3)

(66)

(11)

>100%






Total operating revenues

407

9,350

15,522

(39.8%)






Other operating income

(13)

(301)

(123)

>100%

Fuel expense, net (1)

131

3,018

5,770

(47.7%)

Depreciation of right of use assets

108

2,474

2,336

5.9%

Landing, take-off and navigation expenses

83

1,915

2,420

(20.9%)

Salaries and benefits

70

1,605

1,739

(7.7%)

Aircraft and engine variable lease expenses

35

801

543

47.5%

Sales, marketing and distribution expenses

24

542

621

(12.7%)

Maintenance expenses

17

399

723

(44.7%)

Other operating expenses

23

517

516

0.2%

Depreciation and amortization

18

419

291

43.9%

Operating expenses

496

11,389

14,836

(23.2%)






Operating (loss) income

(89)

(2,039)

685

NA






Finance income

3

76

92

(17.1%)

Finance cost (2)

(78)

(1,794)

(1,023)

75.4%

Exchange (loss) gain, net

(32)

(725)

1,157

NA

Comprehensive financing result

(106)

(2,442)

227

NA






(Loss) income before income tax

(195)

(4,481)

912

NA

Income tax benefit (expense)

59

1,344

(274)

NA

Net (loss) income

(137)

(3,137)

639

NA






* Peso amounts were converted to U.S. dollars at end of period exchange rate for convenience purposes only.

(1) 2Q YTD 2020 and 2Q YTD 2019 figures include a benefit from non-derivatives financial instruments by an amount of Ps.118.7 million and Ps.13.9 million, respectively.

(2) During second quarter 2020, as a result of the capacity reduction due to COVID-19, the Company recorded the ineffective portion related to the derivative financial instruments by an amount of Ps.429 million, which is presented as part of the financial costs.

 

 


Controladora Vuela Compañía de Aviación, S.A.B. de C.V. and Subsidiaries

Reconciliation of total ancillary revenue per passenger


The following table shows quarterly additional detail about the components of total ancillary revenue:


Unaudited

Three months ended

June 30, 2020

(US Dollars)*

Three months ended

June 30, 2020

 

Three months ended

June 30, 2019

Variance

(%)

(In millions of Mexican pesos)






Other passenger revenues

25

582

2,607

(77.7%)

Non-passenger revenues

6

129

302

(57.3%)

Total ancillary revenues

31

711

2,909

(75.5%)






Booked passengers (thousands)

1,105

5,654

(80.5%)






Total ancillary revenue per passenger

28

644

514

25.2%






* Peso amounts were converted to U.S. dollars at end of period exchange rate for convenience purposes only.

 

 


The following table shows the first one half of the year additional detail about the components of total ancillary revenue:


Unaudited

Six months ended

June 30, 2020

(US Dollars)*

Six months ended

June 30, 2020

 

Six months ended

June 30, 2019

Variance

(%)

(In millions of Mexican pesos)






Other passenger revenues

142

3,257

4,954

(34.3%)

Non-passenger revenues

19

433

518

(16.5%)

Total ancillary revenues

161

3,689

5,472

(32.6%)






Booked passengers (thousands)

6,382

10,617

(39.9%)






Total ancillary revenue per passenger

25.2

578

515

12.2%






* Peso amounts were converted to U.S. dollars at end of period exchange rate for convenience purposes only.

 

 


Controladora Vuela Compañía de Aviación, S.A.B. de C.V. and Subsidiaries

Consolidated Statement of Financial Position


(In millions of Mexican pesos)

June 30, 2020

Unaudited

June 30, 2020 Unaudited

December 31, 2019

Audited

(US Dollars)*

Assets




Cash and cash equivalents

436

10,013

7,980

Accounts receivable

119

2,743

2,320

Inventories

12

278

302

Prepaid expenses and other current assets

45

1,045

781

Financial instruments

1

28

134

Guarantee deposits

62

1,416

600

Total current assets

676

15,522

12,117

Rotable spare parts, furniture and equipment, net

306

7,021

7,385

Right of use assets

1,428

32,799

34,129

Intangible assets, net

7

167

167

Financial instruments

2

3

Deferred income taxes

139

3,194

1,543

Guarantee deposits

381

8,759

7,644

Other assets

5

120

166

Other long- term assets

9

199

141

Total non-current assets

2,275

52,261

51,178

Total assets

2,951

67,783

63,295

Liabilities




Unearned transportation revenue

254

5,832

3,680

Accounts payable

160

3,678

1,656

Accrued liabilities

77

1,759

2,532

Lease liabilities

298

6,844

4,721

Other taxes and fees payable

99

2,267

2,102

Income taxes payable

2

141

Financial instruments

38

869

Financial debt

155

3,569

2,086

Other liabilities

13

304

407

Total short-term liabilities

1,094

25,124

17,324

Financial instruments

Financial debt

82

1,876

2,890

Accrued liabilities

3

72

91

Lease liabilities

1,842

42,307

35,797

Other liabilities

103

2,371

1,470

Employee benefits

2

45

38

Deferred income taxes

7

156

156

Total long-term liabilities

2,038

46,827

40,441

Total liabilities

3,132

71,951

57,765

Equity




Capital stock

129

2,974

2,974

Treasury shares

(8)

(176)

(170)

Contributions for future capital increases

Legal reserve

13

291

291

Additional paid-in capital

81

1,851

1,880

Retained (losses) earnings

(117)

(2,698)

438

Accumulated other comprehensive income (losses) (1)

(279)

(6,409)

116

Total equity

(181)

(4,167)

5,530

Total liabilities and equity

2,951

67,783

63,295





Total shares outstanding fully diluted


1,011,876,677

1,011,876,677

* Peso amounts were converted to U.S. dollars at end of period exchange rate for convenience purposes only.

(1) As of June 30, 2020 and as of December 31, 2019 the figures include a negative foreign exchange effect of Ps.5,847 million and a positive foreign exchange effect of Ps.14 million, respectively, related to non-derivatives financial instruments.

                              

 

 


Controladora Vuela Compañía de Aviación, S.A.B. de C.V. and Subsidiaries

Consolidated Statement of Cash Flows – Cash Flow Data Summary


Unaudited

 

Three months ended

June 30, 2020

Three months ended

June 30, 2020

 

Three months ended

June 30, 2019

(In millions of Mexican pesos)

(US Dollars)*





Net cash flow generated by operating activities

25

584

1,527

Net cash flow generated by investing activities

3

71

171

Net cash flow used in financing activities**

(51)

          (1,179) 

(571)

(Decrease) increase in cash and cash equivalents

(23)

(524)

1,127

Net foreign exchange differences

(5)

(120)

(74)

Cash and cash equivalents at beginning of period

464

10,658

7,071

Cash and cash equivalents at end of period

436

10,013

8,124





* Peso amounts were converted to U.S. dollars at end of period exchange rate for convenience purposes only.

**Includes aircraft rental payments of Ps.806 million and Ps.1,582 million for the three months ended period June 30, 2020 and 2019, respectively.

 

 


Unaudited

 

Six months ended

June 30, 2020

Six months ended

June 30, 2020

 

Six months ended

June 30, 2019

(In millions of Mexican pesos)

(US Dollars)*





Net cash flow generated by operating activities

148

3,403

5,257

Net cash flow generated by (used in) investing activities

1

34

(208)

Net cash flow used in financing activities**

(133)

          (3,048) 

(2,633)

Increase in cash and cash equivalents

17

389

2,416

Net foreign exchange differences

72

1,645

(155)

Cash and cash equivalents at beginning of period

347

7,980

5,863

Cash and cash equivalents at end of period

436

10,013

8,124





* Peso amounts were converted to U.S. dollars at end of period exchange rate for convenience purposes only.

**Includes aircraft rental payments of Ps.2,626 million and Ps.3,130 million for the six months ended period June 30, 2020 and 2019, respectively.

 

 

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SOURCE Volaris