MEXICO CITY, Oct. 22, 2014 /PRNewswire/ -- Volaris* (NYSE: VLRS and BMV: VOLAR), the ultra-low-cost airline serving Mexico and the United States, today announced its financial results for the third quarter 2014.

Third Quarter 2014 Highlights Performance in a Recovering Fare Environment with Capacity Discipline

The following financial information, unless otherwise indicated, is presented in accordance with International Financial Reporting Standards (IFRS). Unless otherwise stated, all comparisons with prior periods refer to the third quarter of 2013.

• Total operating revenues were Ps.3,995 million for the third quarter, an increase of 7% as compared to last year as a result of record non-ticket revenue per passenger.
• Non-ticket revenues increased 48% as compared to last year, reaching Ps.742 million. Non-ticket revenue per passenger increased 44%, reaching Ps.281 (US$21), continuing with product unbundling and customer acceptance.
• Total operating revenue per available seat mile (TRASM) increased to Ps.127.6 cents (US$9.5 cents), a 1% increase as compared to last year.
• Operating expenses per available seat mile (CASM) increased 2% as compared to last year, reaching Ps.116.0 cents (US$8.6cents). CASM expressed in US cents decreased 2% for the quarter year over year.
• Adjusted EBITDAR was Ps.1,085 million, a 7% increase year over year with an Adjusted EBITDAR margin of 27.2%.
• Net income reached Ps.347 million, a 37% increase year over year and net margin of 9%, a net margin improvement of 2 percentage points. (Ps.0.34 per share / US$0.26 per ADS).

Volaris CEO Enrique Beltranena commented: "After navigating difficult challenges in the last twelve months, we are reporting net profits and net margin expansion, along with improved financial and operating results. We continued managing capacity for profitability in a disciplined way. While the Mexican economy has been gradually regaining growth, and the Mexican air travel market has seen slight improvements in the peak travel season, our financial and operating results begin to demonstrate recovered performance and the long term value creation potential of our business model. Third quarter highlights include expanding net margins, on the back of record non-ticket revenue per passenger, and continued cost control discipline. We have experienced tailwinds in fuel costs with the recent drop in oil prices and we would expect this benefit for our ULCC model to continue in the short term."

Improving Macroeconomic Environment with the challenge of Hurricane Odile

• The Mexican macroeconomic environment:
  • GDP growth estimates for the full year are 2.5%, according to the September 2014 Mexican Central Bank survey.
  • Consumer confidence decreased 2.4% year over year in September of 2014.
  • The Mexican General Economic Activity Indicator (IGAE) increased 2.5% in July of 2014 compared to the same period in 2013.
• Exchange rate factors: The Mexican peso depreciated 2% year over year against the US dollar, as the exchange rate devalued from an average of Ps.12.91 pesos per US dollar in the third quarter of 2013 to Ps.13.11 pesos per US dollar during the third quarter of 2014.
• Lower fuel prices: The average economic fuel cost per gallon decreased 1% year over year in the third quarter of 2014.
• Hurricane Odile: In September 2014, as a result of adverse weather conditions and airport shutdowns in connection with Hurricane "Odile", Volaris canceled 40 flights to San Jose del Cabo and La Paz, representing 0.5% of the total capacity for the month. Volaris worked in coordination with the federal, state, and local authorities to assist people who were stranded, transporting more than 7,000 passengers on 96 humanitarian aid flights.

Volaris ULCC Model Performs Well in a Recovering Market Environment

• Unit revenue improvement: Year over year TRASM increased 1%, with signs of yield stabilization.
• Focused on international growth and domestic capacity discipline: Domestic market capacity grew only 3%, reflecting capacity discipline and supporting yield recovery, while international market capacity increased 18%, responding to a stronger fare environment.
• Non-ticket revenues growth: Non-ticket revenues excluding cargo per passenger increased 58% year over year. Our non-ticket revenues strategy continued to advance as we expanded the ancillary services selection, introduced revenue management techniques on some services and our customers gained a deeper understanding and appreciation of the unbundled service offerings.
• Air traffic volume increase: The DGAC (Direccion General de Aeronautica Civil) reported an overall passenger increase for Mexican carriers of 9.5% for the first eight months of 2014 and Volaris market share among Mexican carriers remained at 23.2% in both domestic and international markets, the second largest among them.
• New routes and operations launch: During the third quarter, Volaris opened nine new point-to-point routes (seven domestic and two international), focusing on our VFR customer base both in the domestic and the Mexico-US market, and improving our presence in Monterrey.

Third Quarter Operating Revenues: Key Revenue Metrics Demonstrate Signs of Recovery as Non-Ticket Revenues Expand

Volaris booked 2.6 million passengers in the third quarter 2014. This equates to a 3% growth rate in the third quarter 2014 as compared to the third quarter 2013.

Volaris traffic (measured in terms of revenue passenger miles, or RPMs) increased 2% in the third quarter 2014 year over year.

For the third quarter 2014, Volaris' total operating revenues were Ps.3,995 million, an increase of 7% year over year. Average fare decreased 2% year over year in the third quarter 2014.

During the third quarter 2014, our non-ticket revenues and non-ticket revenue per passenger reached Ps.742 million and Ps.281 (US$21), respectively. Non-ticket revenues excluding cargo per passenger increased 58% in the third quarter year over year.

Passenger revenue per available seat mile (RASM) was 5% lower compared to the third quarter 2013, and total operating revenue per available seat mile (TRASM) was 1% higher, as a result of an improving fare environment and stronger non-ticket revenues.

Rigorous Cost Discipline: Capacity Discipline and Exchange Rate Impact Unit Costs

CASM for the third quarter 2014 was Ps.116.0 cents (US$8.6 cents), a 2% increase compared to the third quarter of 2013, driven by a higher average exchange rate during the quarter and lower capacity growth reflecting capacity discipline. On a US dollar basis, our CASM decreased 2% compared to the same period in 2013.

Young and Fuel Efficient Fleet: Increasing Cost Efficiency

As of September 30, 2014, the Company's fleet was comprised of 48 aircraft (29 A320s and 19 A319s), with an average age of 4.3 years. We expect to end the year with 50 aircraft.

Strong Balance Sheet and Good Liquidity

As of September 30, 2014, Volaris had Ps.1,814 million in unrestricted cash and cash equivalents. The Company recorded negative net debt (or a positive net cash position) of Ps. 922 million and total equity was Ps.3,847 million.

During the third quarter 2014, Volaris incurred capital expenditures of Ps.370 million, which included pre-delivery payments for future deliveries of aircraft net of refunds of Ps.152 million and acquisitions of rotable spare parts, furniture and equipment of Ps.218 million.

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

Conference Call/Webcast Details:
Volaris will conduct a conference call to discuss these results on October 23, 2014, at 2:30 p.m. ET. A live audio webcast of the conference call will be available to the public on a listen-only basis at http://ir.volaris.com  

About Volaris:
Controladora Vuela Compania de Aviacion, S.A.B. de C.V. ("Volaris" or the "Company") (NYSE: VLRS and BMV: VOLAR), is an ultra-low-cost carrier (ULCC), with point-to-point operations, serving Mexico and the United States. Volaris offers low base fares to build its market, providing quality service and extensive customer choice. Since beginning operations in March 2006, Volaris has increased its routes from five to more than 130 and its fleet from four to 50 aircraft. Volaris offers more than 220 daily flight segments on routes that connect 36 cities in Mexico and 17 cities in the United States with the youngest aircraft fleet in Mexico. Volaris targets passengers who are visiting friends and relatives, cost-conscious business people and leisure travelers in Mexico and to select destinations in the United States. Volaris has received the ESR Award for Social Corporate Responsibility for five 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 or beliefs concerning future events. When used in this release, the words "expects," "estimates," "plans," "anticipates," "indicates," "believes," "forecast," "guidance," "outlook," "may," "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. All forward-looking statements in this release are based upon information available to the Company on the date of this release. The Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise. 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.

Investor Relations Contact:
Andres Pliego / Investor Relations / ir@volaris.com / +52-55-5261-6444 
Media Contact:
Cynthia Llanos / cllanos@gcya.net / +52-1-55-4577-0803

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SOURCE Volaris