Volaris exceeds $1 billion in revenue despite posting a net loss of $26 million
Key Facts
Volaris reported operating revenue of $1,038 million in the third quarter of 2026, up 32.4% from the same period last year, but incurred a net loss of $26 million after posting a profit of $6 million a year earlier. The company said in its earnings release that quarterly revenue exceeded the $1 billion mark for the first time, driven by growth in ancillary revenue and strong ticket prices. On the earnings call held on October 27, the chief executive said strong demand absorbed added capacity as the cross-border network expanded and aircraft productivity improved. The results thus reflected broader activity and higher revenue alongside a decline in net profitability. The company’s shares, traded under the ticker VLRS, closed at $5.62 on October 26.
Diluted loss per American depositary share was $0.23, compared with earnings of $0.05 per share in the third quarter of 2025. On the operating side, booked passengers rose 14.3% to 8.977 million from 7.855 million a year earlier, while the load factor increased to 85.7% from 84.4%. These indicators show an increase in passenger numbers and better utilization of available seats, alongside growth in operating revenue. However, the swing to a net loss highlights the gap between the expansion in business volume and the period’s bottom-line result. The official release did not provide a comparison with analyst estimates.
The chief executive said EBITDAR margin was 25.3% for the quarter, exceeding the company’s guidance of 22%. This came despite the average jet fuel price reaching $3.67 per gallon, above the guidance assumption of $3.50. In the cross-border travel market between the United States and Mexico, revenue rose 53% year over year, and management said pricing fully offset the annual increase in fuel costs in that business. The chief executive added that directing additional flights to a market with stronger demand and pricing supported recovery of that increase. He said quarterly revenue exceeded $1 billion for the first time, driven by growth in ancillary revenue and strong prices.
Fleet availability improved compared with the start of the year, with an average of about 21 aircraft grounded because of GTF engine issues during the third quarter, down from 36 in the first quarter and 41 at the start of 2026. Management said the company rescheduled all seven Airbus deliveries planned for 2027, as well as 11 deliveries planned for 2028, to 2032, as part of aligning the fleet with engine availability and demand. On liquidity, Volaris ended September with $823 million in cash and cash equivalents and short-term investments, roughly stable quarter over quarter. Net debt to last-twelve-month EBITDAR was 3.3 times, unchanged from the previous quarter. The company also secured a $300 million revolving credit facility from a group of eight banks; the facility was fully undrawn at quarter-end.
For the fourth quarter of 2026, Volaris expects capacity growth of about 4% year over year and an EBITDAR margin of around 20%, with an average jet fuel price of about $4.40 per gallon. Management expects domestic capacity to decline by mid-single-digit percentages during the shoulder season, while international capacity grows at a high double-digit rate. For 2027, the company is targeting low-single-digit overall growth. The chief executive also said the proposed merger with Viva Aerobus remains under review by Mexico’s antitrust authority, with no final completion date announced. He said the company continues to engage with the authority and cannot comment on further details beyond what it has publicly announced.