Volaris, Mexico’s top low-cost airline, faced major financial trouble this past quarter. The airline reported a net loss of $63 million as costs rose and revenue fell. Even though it flew more passengers, Volaris struggled to earn more money from each seat.
The airline’s revenue dropped 5% to $693 million. It failed to convert more capacity into higher income. Per-seat revenue fell 12%, which affected the total badly. Meanwhile, costs surged to $715 million. Fuel costs dropped, but other expenses climbed faster.
Non-fuel costs per seat rose 7%. This added pressure to margins. Volaris’ core profit (EBITDAR) fell 26% to $194 million. Profit margins also fell 8 percentage points. These numbers showed a rough quarter for the carrier.
Despite the loss, Volaris kept strong cash reserves. The airline held $788 million in cash and investments. That equals more than one-fourth of its yearly revenue. However, its debt increased as it borrowed more to handle the revenue hit.
Volaris now plans to cut costs and match seats with real demand. It expects travel demand to improve soon. The airline believes that quick moves and strict discipline can help it recover profits.
The aviation industry remains shaky. But Volaris shows signs of smart planning. It focuses on cost control and demand-based seat planning. If things go well, the airline may recover faster and stronger.
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