Equity Analysis /
Mexico

Volaris: Flash: Demand performance continues to stand out

  • In March total passengers’ growth 86.7% y/y (+39.4% vs same month of 2019)

  • We believe that strong demand will remain; but it will be necessary to continue tracking oil prices

  • We will be attentive to the 1Q22 results and any outlook that company´s may provide

Jose Itzamna Espitia Hernandez
Jose Itzamna Espitia Hernandez

Senior Equity Research Analyst, Infrastructure, Materials and Transportation

Marissa Garza Ostos
Marissa Garza Ostos

Head of Equity Research

Banorte
7 April 2022
Published by

Volaris recorded an annual increase of 86.7% y/y in total passenger traffic during March, transporting a total of 2.5 million, that represented a 39.4% rose vs. March 2019. The annual growth in international passengers was 115.0%, followed by domestic passengers which recorded 53.4%. The capacity, measured in terms of Available Seats Miles (ASMs), showed an increase of 61.2% y/y (+41.2% vs March 2019), while demand, measured in Revenue Passengers Miles (RPMs), registered an 60.4% y/y growth (+41.0% vs. same month of 2019) . Thus, the load factor decreased 0.4pp to 86.5%.

Positive implication: Volaris’ March figures showed a solid performance, which we see as positive considering current challenges. Even though we believe its leading position in Mexico’s aviation sector and strong demand that supports a favorable fares environment which should continue to drive growth, it will be necessary to continue monitoring oil prices that may generate stock volatility. In that sense, we must focus on the results and any perspective updates that the company may announce when it reports the 1Q22 next Wednesday, April 27, after the market closes.