Grupo Viva Aerobus Achieves A 42% Growth In Its Operating Income In The 2q2019

"The results obtained in this second quarter place us one step closer to the financial, operational and expansion objectives that we set for this year; which, in general terms, can be summarized in being the fastest growing airline in terms of passengers, expanding our route network and reaching solid levels of profitability", said Gian Carlo Nucci, CEO of Grupo Viva Aerobus.

Viva Aerobus maintained costs per available seat - kilometer, excluding fuel, at 0.32 cents, despite pressure on macroeconomic indicators. Thus, it was possible to offer a service characterized by reliability and competitive prices that encourage passenger traffic.

Therefore, the airline achieved a 24% growth in terms of passengers in 2Q2019 compared to 2Q2018, reaching more than 2.9 million customers with an average load factor of 90%, one of the highest worldwide. In this context, Viva broke its passenger record in June, exceeding, for the first time, the million travelers in a single month.

Because of this upward trend in passengers, the airline registered a significant increase in its total operating revenue by 32.2%, compared to 2Q2018, reaching 2,971 million pesos. This total was integrated in 51% by passenger revenue (1,523 million pesos) and in 49% by ancillary revenue (1,448 million pesos). In this regard, passenger revenue increased by 34.7% and ancillary revenue by 29.6% compared to the same period of the previous year. Viva Aerobus is an international benchmark in this scheme, since the significant share of ancillary revenue reflects passengers' freedom of choice to adapt each flight according to their needs. Thus, in addition to tailor-made flights, this strategy of cost segmentation ("Unbundling") allows the company dealing with macroeconomic variables that affect ticket prices for the direct benefit of travelers.

Moreover, this increase in consolidated revenue was also the result of the uninterrupted expansion of Viva Aerobus. "Along with a solid operation during the second quarter, we achieved overwhelming success in our expansion strategy. During this period, we started the operation of 9 regular routes, 2 seasonal routes and increased the number of flights on other routes," said Juan Carlos Zuazua, CEO of Viva Aerobus. At the end of the quarter, the airline totaled 111 routes to 45 destinations.

In line with this expansion in its route network, Viva increased its capacity, measured in avail-able seats - kilometers (ASKs), by 30.8%. This growth was supported by the integration of four new Airbus 320neo aircraft between May and June, which resulted in a total of 34 Airbus A320 aircraft with an average age of 3.9 years, being the youngest fleet in Mexico. Among the ad-vantages of having these airplanes with last generation engines is the reduction in annual fuel consumption by 16% per seat; also reducing the emission of greenhouse gases and acoustic footprint for environmental benefit.

Regarding its profitability, the net income of Viva Aerobus reached 63 million pesos, compar-ing positively with the same period of 2018, and with a net margin of 2.1%. For its part, the EBITDA (Profit Before Financing, Taxes, Depreciation, Amortization and Income) registered $ 1,020 million pesos, that is, an increase of 36.3% compared to 2Q2018, and with a margin of 34.3%. Both figures were strengthened by the exchange rate in the period, as well as by a dis-ciplined operational efficiency that allowed to reduce operating costs.

"We continue strengthening our strategy in a changing industry; aware of the challenges we face, but much more excited about the opportunities that lie ahead. We are confident in our ultra-low-cost business model that offers the most competitive prices in benefit of our clients, and gives investors certainty of long-term growth," said Gian Carlo Nucci, CEO of Grupo Viva Aerobus.