Controladora Vuela Compañía de Aviación SAB de CV Q3 FY2025 earnings call

• Volaris demonstrated agility and discipline, with demand momentum building as expected. Domestic supply rationalization created a healthier balance between capacity and demand. International cross-border demand was recovering, with holiday bookings ahead of last year. - Ancillary revenue per passenger reached $56 in the third quarter, marking the eighth consecutive quarter above $50. The affinity portfolio, including v.club and co-branded credit cards, continued to grow. - Fleet plan adjustments: 2025 capacity growth outlook 7%, EBITDAR margin 32%-33%; 2026 ASM growth targeted 6%-8% with flexibility. - Guadalajara example: Market expanded with increased connectivity, handling a larger passenger base with diverse travel motivations.

In the domestic market, the load factor reached 89.8%, with stable demand under a rational supply environment. The international market saw a recovery in cross-border demand, with a 77% load factor. Ancillaries now consistently account for over half of total revenue.

• Full-year 2025: Capacity growth ~7%, EBITDAR margin 32%-33%, CapEx net of predelivery payments ~$250 million. - Fourth quarter 2025: ASM growth ~8%, TRASM ~$0.093, CASM ex-fuel ~$0.0575, EBITDA margin ~36%. - 2026: ASM growth targeted 6%-8% with flexibility based on demand trends.

• Engine inspections and related disruptions, including Pratt & Whitney AOG situation. - Geopolitical disruptions affecting cross-border travel. - Uncertainties in political and economic environments impacting network and profitability.

Q: You mentioned international is tracking stronger than normal seasonality and an inflection point in U.S. transborder. Elaborate?

A: Since mid-August, U.S.-Mexico transborder sales are above last year's level. Fourth quarter booking trends show sustained improvement.

Q: Number of lease returns expected next year and net of lease return expense and Pratt reimbursement?

A: Next year budgeting 17 redeliveries vs 7 this year. Focus on narrowing gap between productive and nonproductive fleet while aligning with customer demand.

Q: Potential RASM uplift over coming years as initiatives ramp?

A: Expect positive year-over-year impact on TRASM in 2026 from commercial initiatives, with specific targets communicated as adoption scales.

Q: Growth trends in other markets besides Guadalajara?

A: Bus fare customer base growing rapidly, over 10 million first-time flyers developed, making a dramatic difference vs mature markets.

Q: Improved travel sentiment in cross-border market and demand in other Central American markets to U.S.?

A: Economic uncertainty improving and migration policy focus reducing apprehensions. Travel sentiment improving as people want to visit friends and family.

Q: Groundings peak in early next year and year-end expectation?

A: By year-end 2026, average AOGs expected around 25-27; no material impact by end of 2027.

Q: Potential ASM growth adjustment if demand better or weaker?

A: By around 2 percentage points either up or down.

Q: Competition in 2026 and rational supply?

A: Domestic market budgeting low to mid-single-digit growth; competitors following capacity rationalization, supporting healthier fare environment.