Equity Analysis /
Mexico

Volaris: Flash VOLAR: Passengers in April return to pre-pandemic levels

  • Volaris posted a strong 523.8% y/y rise in total passengers in April, +3.3% vs 2019, returning to pre-pandemic levels

  • International traffic fell 11.7% vs 2019. While domestic traffic showed a 6.7% rise vs 2019, from a consistent recovery

  • April's report confirms better demand prospects, and we will be incorporating an improved outlook into our estimates

Jose Itzamna Espitia Hernandez
Jose Itzamna Espitia Hernandez

Senior Equity Research Analyst, Infrastructure, Materials and Transportation

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Contributors
Marissa Garza Ostos
Eridani Ruibal Ortega
Banorte
6 May 2021
Published byBanorte

Volaris posted a strong 523.8% y/y increase (+3.3% vs 2019) in total passengers in April – carrying a total of 1.9 million–. This time, the international side showed a 952.0% y/y rise, albeit a drop of 11.7% vs 2019 − in the face of pandemic travel restrictions−. Meanwhile, domestic traffic rose 478.8% y/y, but when compared to 2019 this reflected a 6.7% increase, resulting from a consistent recovery in the domestic market. In this regard, capacity measured in terms of Available Seat Miles (ASMs) increased by 509.2% y/y and 7.3% vs 2019. Demand measured in Revenue Passenger Miles (RPMs) rose 474.4% y/y (+4.6% vs. 2019). This led the load factor to stand at 82.4% − a 5.0pp annual decline −.

Positive implication: April's passenger report confirms that demand prospects have improved, which goes hand in hand with the larger fleet that the airline plans to operate during the year and a gradual improvement in booking trends for spring and summer. In addition, the company will continue to adequately manage its liquidity level, which will allow it to further strengthen its position as a leader in the Mexican airline industry. As we commented in our 1Q21 report, we will be incorporating an improved outlook into our estimates and valuation.