Volaris Reports Third Quarter 2020 Results

Increased Capacity Drives Stronger Revenues and Lower CASM

Volaris (NYSE: VLRS and BMV: VOLAR), the ultra-low-cost airline serving Mexico, the United States and Central America, today announces its financial results for the third quarter 2020.

Third Quarter 2020 Highlights

During the third quarter 2020, Volaris continued to successfully navigate the uncertainties caused by the SARS-CoV-2 (COVID-19) pandemic. The Company has recovered much of the capacity resulting from COVID-19 as measured by available seat miles (ASMs), a result of its strong ultra-low-cost business model focused on the VFR (Visiting Friends and Relatives) and leisure segments in the domestic and US-transborder markets.

As the Company has been able to recover services and add new routes, management has remained focused on ensuring the well-being of its crews, personnel, and passengers. Volaris has carried more than 4.5 million passengers following its successful biosafety protocol implementation in April 2020. Volaris was recognized with the “Safe travels” stamp, by the World Travel and Tourism Council, as well as the certificates of biosecurity best practices by the governments of Yucatan and Mexico City.

The Company was able to ramp up service to 63% of prior year in July and expanded further to 79% of prior year in August. September is typically a low travel month so management cautiously increased capacity to 84% of prior year while focusing on increasing total revenue per available seat mile (TRASM). For the full period, Volaris operated 75% of ASMs compared to the same period in 2019. The domestic market led the capacity recovery, where Volaris operated 85% ASMs versus the same period in 2019. In the international market, Volaris operated 54% ASMs compared to the same period in 2019. Central American operations remained closed.

The main effects of the continuing recovery of demand and capacity at the end of the third quarter, are as follows:

  • Total operating revenues were Ps.4,724 million for the third quarter, a decrease of 50.3% year over year.
  • Total ancillary revenues were Ps.2,131 million for the third quarter, a decrease of 29.7% year over year. Total ancillary revenues per passenger for the third quarter reached Ps.614, an increase of 13.9% year over year. However, total ancillary revenues represented 45.1% of total operating revenues for the third quarter 2020, increasing 13.2 percentage points with respect to the same period of last year.
  • Total operating revenues per available seat mile (TRASM) were Ps.102.8 cents for the third quarter, a decrease of 31.6% year over year.
  • In the third quarter 2020, the Company recorded a one-time charge of Ps.746 million.
  • Operating expenses per available seat mile (CASM) were Ps.149.2 cents for the third quarter, an increase of 20.9% year over year; with an average economic fuel cost per gallon of Ps.40.2 for the third quarter, a decrease of 10.5% year over year. Excluding the one-time charge, CASM was Ps.133.5 cents.
  • Operating expenses per available seat mile excluding fuel, (CASM ex-fuel) were Ps.111.3 cents for the third quarter, an increase of 43.6% year over year; with an average exchange rate depreciation of the Mexican peso against the U.S. dollar of 13.9% year over year. Excluding the one-time charge, CASM ex-fuel was Ps.95.7 cents.
  • Operating loss was Ps.2,227 million for the third quarter, a significant decrease compared with the operating income of Ps.1,703 million for the same period of last year. Operating margin for the third quarter was negative 47.1%, a deterioration of 65.0 percentage points year over year. Excluding the one-time charge, operating loss was Ps.1,481 million, a negative operating margin of 31.4%.
  • Net loss was Ps.2,175 million (Ps.2.15 loss per share / U.S.$0.96 loss per ADS), a negative net margin of 46.0% for the third quarter. Excluding the one-time charge, net loss was Ps.1,429 million (Ps.1.41 loss per share / U.S.$0.63 loss per ADS), a negative net margin of 30.3%.
  • At the close of the third quarter, the Mexican peso appreciated 2.2% against the U.S. dollar (Ps.22.46 per U.S. dollar) with respect to the exchange rate at the close of the previous quarter (Ps.22.97 per U.S. dollar). The Company booked a net foreign exchange gain of Ps.186 million derived from our U.S. dollar net monetary liability position.
  • During the third quarter of 2020, the net cash flow used in operating activities was Ps.113 million. The net cash flow used in investing activities reached Ps.179 million. The net cash flow used in financing activities was Ps.1,357 million, which included Ps.1,724 million of aircraft rental payments. The negative net foreign exchange difference was Ps.163 million, thus leading to a net decrease of cash and cash equivalents in the third quarter of Ps.1,812 million. As of September 30, 2020, cash and cash equivalents were Ps.8,202 million.

Fuel Price reduction and Peso Depreciation

  • Fuel price reduction: The average economic fuel cost per gallon decreased 10.5% in the third quarter of 2020, year over year, reaching Ps.40.2 per gallon (U.S.$1.8).
  • Peso depreciation: The Mexican peso depreciated 13.9% against the U.S. dollar year over year, from an average exchange rate of Ps.19.42 per U.S. dollar in the third quarter of 2019 to Ps.22.11 per U.S. dollar during the third quarter of 2020. At the end of the third quarter of 2020, the Mexican peso (Ps.22.46 per U.S. dollar) depreciated 14.4% with respect to the exchange rate at the end of the same period of the last year (Ps.19.64 per U.S. dollar).

Passenger Traffic Contraction, Ancillary Revenue Reduction, and TRASM decrease

  • Passenger traffic contraction: Volaris had 3.4 million passengers booked in the third quarter of 2020, a decrease of 38.3% year over year. Volaris traffic (measured in terms of revenue passenger miles, or RPMs) decreased 35.2% year over year. System load factor during the third quarter decreased 11.7 percentage points year over year to a level of 73.4%.
  • Total ancillary revenue reduction: For the third quarter of 2020, total ancillary revenue decreased 29.7% year over year. However, total ancillary revenue per passenger in the third quarter of 2020 increased 13.9% year over year. The total ancillary revenue generation continues to grow with new and mature products, appealing to customers' needs, representing 45.1% of total operating revenue of the third quarter, an increase of 13.2 percentage points year over year.
  • TRASM decrease: For the third quarter of 2020, TRASM decreased 31.6% year over year. During the third quarter of 2020, the total capacity, measured by ASMs, decreased 24.9% year over year.

Total Unit Cost Increase and Peso Depreciation

  • CASM and CASM ex fuel in the third quarter of 2020 reached Ps.149.2 (U.S.$6.64 cents) and Ps.111.3 cents (U.S.$4.96), respectively. This represented an increase of 20.9% for CASM and an increase of 43.6% for CASM ex fuel, year over year; mainly driven by the capacity reduction as measured by available seat miles (ASMs), and the depreciation of the Mexican peso against the U.S. dollar by 13.9%. Excluding the one-time charge, CASM was Ps.133.5 cents and CASM ex-fuel was Ps.95.7 cents.

Young and Fuel-Efficient Fleet

  • During the third quarter of 2020, the Company returned one A320 aircraft and incorporated three new A320 NEO aircraft to its fleet. As of September 30, 2020, Volaris' fleet comprised 84 aircraft (7 A319s, 61 A320s and 16 A321s), with an average age of 5.4 years. At the end of the third quarter of 2020, Volaris' fleet had an average of 187 seats per aircraft 77% of our aircraft were sharklet-equipped, and 32% were NEOs.

Liquidity Preservation Plan with a Net Cash Flow Generated by Operating Activities

  • Since the COVID-19 pandemic started, the Company's main objective has been to preserve its liquidity position. Specifically, for the third quarter, our liquidity preservation plan brought $1.9 billion pesos in benefits; of which $406 million pesos were cost reductions.
  • During the third quarter of 2020, the net cash flow used in operating activities was Ps.113 million. The net cash flow used in investing activities was Ps.179 million. The net cash flow used in financing activities was Ps.1,357 million, which included Ps.1,724 million of aircraft rental payments. The negative net foreign exchange difference was Ps.163 million. As a result, there was a net decrease of cash and cash equivalents in the third quarter of Ps.1,812 million. As of September 30, 2020, cash and cash equivalents were Ps.8,202 million, representing 34.5% of last twelve months of the operating revenue. Volaris registered a negative net debt (or a positive net cash position) of Ps.2,387 million (excluding lease liability recognized under the IFRS16 adoption).

Non-Derivative Financial Instruments

  • During 2019, the Company established hedges on its U.S. dollar denominated revenues through a non-derivative financial instrument, using the lease liabilities denominated in U.S. dollar as a hedge instrument. This hedging relationship was designated as a cash flow hedge of forecasted revenues to mitigate the volatility of the foreign exchange variation arising from the revaluation of the lease liabilities. During the third quarter 2020, the impact of these hedges was Ps.171 million, which has been included as part of the total operating revenue.
  • Additionally, during 2019, the Company established hedges on a portion of its forecasted fuel expense, through a non-derivative financial instrument, using as a hedge instrument a portion of its U.S. dollar denominated monetary assets. This hedging relationship was designated as a cash flow hedge of forecasted fuel expense to mitigate the volatility of the foreign exchange variation arising from the revaluation of this portion of U.S. dollar denominated monetary asset. During the third quarter 2020, the impact of these hedges was Ps.154 million, which has been presented as part of the total fuel expense.
  • For the hedging relationships described, the effective portion of the hedging instrument's change in fair value is recognized in Other Comprehensive Income or OCI. The accounting records corresponding to the recycling of the OCI are made in accordance with IFRS 9. Under this Standard, the portion recorded in OCI is recognized in the results in the same period in which the expected hedging for cash flows affect the result of the period. As of September 30, 2020, OCI includes a negative foreign exchange effect of Ps.5,265 million. As of December 31, 2019, OCI includes a positive foreign exchange effect of Ps.14 million.

Controladora Vuela Compañía de Aviación, S.A.B. de C.V. and Subsidiaries

Financial and Operating Indicators

Unaudited

Three months ended September 30, 2020

Three months
ended September 30, 2020

Three months
ended September 30, 2019

Variance

(In Mexican pesos, except otherwise indicated)

(US Dollars)*

(%)

Total operating revenues (millions)

210

4,724

9,502

(50.3%)

Total operating expenses (millions)

310

6,951

7,799

(10.9%)

EBIT (millions)

(99)

(2,227)

1,703

NA

EBIT margin

(47.1%)

(47.1%)

17.9%

(65.0) pp

Depreciation and amortization

67

1,509

1,363

10.7%

Aircraft and engine variable lease expenses

24

537

226

>100%

Net (loss) income (millions)

(97)

(2,175)

713

NA

Net (loss) income margin

(46.0%)

(46.0%)

7.5%

(53.5) pp

(Loss) income per share:

Basic (pesos)

(0.10)

(2.15)

0.70

NA

Diluted (pesos)

(0.10)

(2.15)

0.70

NA

(Loss) income per ADS:

Basic (pesos)

(0.96)

(21.50)

7.05

NA

Diluted (pesos)

(0.96)

(21.50)

7.05

NA

Weighted average shares outstanding:

Basic

1,011,876,677

1,011,876,677

0.0%

Diluted

1,011,876,677

1,011,876,677

0.0%

Available seat miles (ASMs) (millions) (1)

4,763

6,341

(24.9%)

Domestic

3,685

4,328

(14.9%)

International

1,078

2,014

(46.5%)

Revenue passenger miles (RPMs) (millions) (1)

3,496

5,398

(35.2%)

Domestic

2,711

3,785

(28.4%)

International

785

1,613

(51.3%)

Load factor (2)

73.4%

85.1%

(11.7) pp

Domestic

73.6%

87.5%

(13.9) pp

International

72.8%

80.1%

(7.3) pp

Total operating revenue per ASM (TRASM) (cents) (1) (5)

4.6

102.8

150.3

(31.6%)

Total ancillary revenue per passenger (4) (5)

27.3

614

539

13.9%

Total operating revenue per passenger (5)

62.8

1,411

1,696

(16.8%)

Operating expenses per ASM (CASM) (cents) (1) (5)

6.64

149.2

123.4

20.9%

Operating expenses per ASM (CASM) (US cents) (1) (3) (5)

6.75

6.36

6.1%

CASM ex fuel (cents) (1) (5)

4.96

111.3

77.5

43.6%

CASM ex fuel (US cents) (1) (3) (5)

5.03

3.99

26.1%

Booked passengers (thousands) (1)

3,470

5,620

(38.3%)

Departures (1)

24,721

35,777

(30.9%)

Block hours (1)

62,678

90,323

(30.6%)

Fuel gallons consumed (millions)

44.9

64.9

(30.8%)

Average economic fuel cost per gallon (5)

1.8

40.2

44.9

(10.5%)

Aircraft at end of period

84

80

5.0%

Average aircraft utilization (block hours)

10.6

13.2

(19.8%)

Average exchange rate

22.11

19.42

13.9%

End of period exchange rate

22.46

19.64

14.4%

*Peso amounts were converted to U.S. dollars at end of period exchange rate for convenience purposes only.

(1) Includes schedule and charter. (3) Dollar amounts were converted at average exchange rate of each period.

(2) Includes schedule. (4) Includes “Other passenger revenues” and “Non-passenger revenues”.

(5) Excludes non-derivatives financial instruments.

Controladora Vuela Compañía de Aviación, S.A.B. de C.V. and Subsidiaries

Financial and Operating Indicators

Unaudited

Nine months

ended September 30, 2020

Nine months
ended September 30, 2020

Nine months ended

September 30, 2019

Variance

(In Mexican pesos, except otherwise indicated)

(US Dollars)*

(%)

Total operating revenues (millions)

627

14,074

25,023

(43.8%)

Total operating expenses (millions)

814

18,287

22,635

(19.2%)

EBIT (millions)

(188)

(4,213)

2,388

NA

EBIT margin

(29.9%)

(29.9%)

9.5%

(39.4) pp

Depreciation and amortization

196

4,402

3,990

10.3%

Aircraft and engine variable lease expenses

60

1,338

769

74.1%

Net (loss) income (millions)

(231)

(5,191)

1,352

NA

Net (loss) income margin

(36.9%)

(36.9%)

5.4%

(42.3) pp

(Loss) income per share:

Basic (pesos)

(0.23)

(5.13)

1.34

NA

Diluted (pesos)

(0.23)

(5.13)

1.34

NA

(Loss) income per ADS:

Basic (pesos)

(2.28)

(51.30)

13.36

NA

Diluted (pesos)

(2.28)

(51.30)

13.36

NA

Weighted average shares outstanding:

Basic

1,011,876,677

1,011,876,677

0.0%

Diluted

1,011,876,677

1,011,876,677

0.0%

Available seat miles (ASMs) (millions) (1)

12,295

18,199

(32.4%)

Domestic

9,140

12,549

(27.2%)

International

3,156

5,650

(44.2%)

Revenue passenger miles (RPMs) (millions) (1)

9,800

15,511

(36.8%)

Domestic

7,307

10,983

(33.5%)

International

2,493

4,528

(44.9%)

Load factor (2)

79.7%

85.3%

(5.6) pp

Domestic

79.9%

87.5%

(7.6) pp

International

79.0%

80.2%

(1.2) pp

Total operating revenue per ASM (TRASM) (cents) (1) (5)

5.2

116.4

137.7

(15.5%)

Total ancillary revenue per passenger (4) (5)

26.3

591

524

12.8%

Total operating revenue per passenger (5)

64.7

1,453

1,544

(5.9%)

Operating expenses per ASM (CASM) (cents) (1) (5)

6.7

151.4

124.6

21.5%

Operating expenses per ASM (CASM) (US cents) (1) (3) (5)

6.9

6.5

7.4%

CASM ex fuel (cents) (1) (5)

5.0

111.2

76.8

44.8%

CASM ex fuel (US cents) (1) (3) (5)

5.10

3.99

27.9%

Booked passengers (thousands) (1)

9,852

16,237

(39.3%)

Departures (1)

66,167

102,823

(35.6%)

Block hours (1)

168,789

260,858

(35.3%)

Fuel gallons consumed (millions)

119.9

186.6

(35.7%)

Average economic fuel cost per gallon (5)

1.8

41.2

46.6

(11.6%)

Aircraft at end of period

84

80

5.0%

Average aircraft utilization (block hours)

11.1

13.0

(14.7%)

Average exchange rate

21.79

19.26

13.1%

End of period exchange rate

22.46

19.64

14.4%

*Peso amounts were converted to U.S. dollars at end of period exchange rate for convenience purposes only.

(1) Includes schedule and charter. (3) Dollar amounts were converted at average exchange rate of each period.

(2) Includes schedule. (4) Includes “Other passenger revenues” and “Non-passenger revenues”.

(5) Excludes non-derivatives financial instruments.

Controladora Vuela Compañía de Aviación, S.A.B. de C.V. and Subsidiaries

Consolidated Statement of Operations

Unaudited

Three months ended September 30, 2020

Three months

ended

September 30,

2020

Three months

ended

September 30,

2019

Variance

(In millions of Mexican pesos)

(US Dollars) *

(%)

Operating revenues:

Passenger revenues

207

4,640

9,271

(50.0%)

Fare revenues

123

2,764

6,501

(57.5%)

Other passenger revenues

84

1,876

2,770

(32.3%)

Non-passenger revenues

11

255

260

(1.8%)

Other non-passenger revenues

9

206

208

(1.3%)

Cargo

2

49

51

(3.8%)

Non-derivatives financial instruments

(8)

(171)

(29)

>100%

Total operating revenues

210

4,724

9,502

(50.3%)

Other operating income

(12)

(267)

(141)

89.5%

Fuel expense, net (1)

73

1,648

2,884

(42.8%)

Depreciation of right of use assets

57

1,278

1,186

7.7%

Landing, take-off and navigation expenses

46

1,028

1,304

(21.2%)

Sales, marketing and distribution expenses

43

964

417

>100%

Salaries and benefits

39

865

909

(4.8%)

Aircraft and engine variable lease expenses

24

537

226

>100%

Maintenance expenses

14

315

406

(22.4%)

Other operating expenses

16

352

432

(18.4%)

Depreciation and amortization

10

231

177

30.8%

Operating expenses

310

6,951

7,799

(10.9%)

Operating (loss) income

(99)

(2,227)

1,703

NA

Finance income

1

17

79

(79.0%)

Finance cost (2)

(32)

(730)

(591)

23.5%

Exchange gain (loss), net

8

186

(173)

NA

Comprehensive financing result

(23)

(527)

(684)

(22.9%)

(Loss) income before income tax

(123)

(2,754)

1,019

NA

Income tax benefit (expense)

26

579

(306)

NA

Net (loss) income

(97)

(2,175)

713

NA

* Peso amounts were converted to U.S. dollars at end of period exchange rate for convenience purposes only.

(1) 3Q 2020 and 3Q 2019 figures include a benefit from non-derivatives financial instruments by an amount of Ps.153.5 million and Ps.26.4 million, respectively.

(2) During third quarter 2020, as a result of the capacity reduction due to COVID-19, the Company recorded the ineffective portion related to the derivative financial instruments by an amount of Ps.19.6 million, which is presented as part of the financial costs.

Controladora Vuela Compañía de Aviación, S.A.B. de C.V. and Subsidiaries

Consolidated Statement of Operations

Unaudited

Nine months ended September 30,

2020

Nine months

ended

September 30,

2020

Nine months

ended

September 30,

2019

Variance

(In millions of Mexican pesos)

(US Dollars) *

(%)

Operating revenues:

Passenger revenues

607

13,624

24,286

(43.9%)

Fare revenues

378

8,491

16,562

(48.7%)

Other passenger revenues

229

5,133

7,724

(33.5%)

Non-passenger revenues

31

688

778

(11.6%)

Other non-passenger revenues

25

555

613

(9.4%)

Cargo

6

132

165

(19.8%)

Non-derivatives financial instruments

(11)

(237)

(40)

>100%

Total operating revenues

627

14,074

25,023

(43.8%)

Other operating income

(25)

(568)

(264)

>100%

Fuel expense, net (1)

205

4,614

8,654

(46.7%)

Depreciation of right of use assets

167

3,752

3,522

6.5%

Landing, take-off and navigation expenses

131

2,943

3,725

(21.0%)

Salaries and benefits

110

2,470

2,648

(6.7%)

Sales, marketing and distribution expenses

67

1,506

1,038

45.0%

Aircraft and engine variable lease expenses

60

1,338

769

74.1%

Maintenance expenses

32

714

1,128

(36.7%)

Other operating expenses

39

869

948

(8.3%)

Depreciation and amortization

29

650

468

38.9%

Operating expenses

814

18,287

22,635

(19.2%)

Operating (loss) income

(188)

(4,213)

2,388

NA

Finance income

4

93

153

(39.0%)

Finance cost (2)

(112)

(2,523)

(1,594)

58.3%

Exchange (loss) gain, net

(19)

(419)

985

NA

Comprehensive financing result

(127)

(2,849)

(457)

>100%

(Loss) income before income tax

(314)

(7,062)

1,931

NA

Income tax benefit (expense)

83

1,872

(579)

NA

Net (loss) income

(231)

(5,191)

1,352

NA

* Peso amounts were converted to U.S. dollars at end of period exchange rate for convenience purposes only.

(1) 3Q YTD 2020 and 3Q YTD 2019 figures include a benefit from non-derivatives financial instruments by an amount of Ps.324.9 million and Ps.40.4 million, respectively.

(2) During third quarter 2020, as a result of the capacity reduction due to COVID-19, the Company recorded the ineffective portion related to the derivative financial instruments by an amount of Ps.448.6 million, which is presented as part of the financial costs.

Controladora Vuela Compañía de Aviación, S.A.B. de C.V. and Subsidiaries
Reconciliation of total ancillary revenue per passenger

The following table shows quarterly additional detail about the components of total ancillary revenue:

Unaudited

Three months ended September 30, 2020

(US Dollars)*

Three months ended September 30, 2020

Three months ended September 30, 2019

Variance

(%)

(In millions of Mexican pesos)

Other passenger revenues

84

1,876

2,770

(32.3%)

Non-passenger revenues

11

255

260

(1.8%)

Total ancillary revenues

95

2,131

3,030

(29.7%)

Booked passengers (thousands)

3,470

5,620

(38.3%)

Total ancillary revenue per passenger

27

614

539

13.9%

* Peso amounts were converted to U.S. dollars at end of period exchange rate for convenience purposes only.

The following table shows the September YTD additional detail about the components of total ancillary revenue:

Unaudited

Nine months ended September 30, 2020

(US Dollars)*

Nine months ended September 30, 2020

Nine months ended September 30, 2019

Variance

(%)

(In millions of Mexican pesos)

Other passenger revenues

229

5,133

7,724

(33.5%)

Non-passenger revenues

31

688

778

(11.6%)

Total ancillary revenues

259

5,820

8,502

(31.5%)

Booked passengers (thousands)

9,852

16,237

(39.3%)

Total ancillary revenue per passenger

26

591

524

12.8%

* Peso amounts were converted to U.S. dollars at end of period exchange rate for convenience purposes only

.

Controladora Vuela Compañía de Aviación, S.A.B. de C.V. and Subsidiaries

Consolidated Statement of Financial Position

(In millions of Mexican pesos)

September 30, 2020
Unaudited

September 30, 2020 Unaudited

December 31, 2019 Audited

(US Dollars)*

Assets

Cash and cash equivalents

365

8,202

7,980

Accounts receivable

108

2,416

2,320

Inventories

11

254

302

Prepaid expenses and other current assets

36

803

781

Financial instruments

1

134

Guarantee deposits

64

1,444

600

Total current assets

584

13,120

12,117

Rotable spare parts, furniture and equipment, net

334

7,498

7,385

Right of use assets

1,512

33,957

34,129

Intangible assets, net

7

167

167

Financial instruments

1

3

Deferred income taxes

160

3,596

1,543

Guarantee deposits

388

8,709

7,644

Other assets

5

106

166

Other long- term assets

12

278

141

Total non-current assets

2,418

54,311

51,178

Total assets

3,003

67,430

63,295

Liabilities

Unearned transportation revenue

293

6,572

3,680

Accounts payable

120

2,700

1,656

Accrued liabilities

105

2,359

2,532

Lease liabilities

334

7,498

4,721

Other taxes and fees payable

106

2,383

2,102

Income taxes payable

2

141

Financial instruments

19

429

Financial debt

104

2,328

2,086

Other liabilities

3

75

407

Total short-term liabilities

1,084

24,346

17,324

Financial debt

155

3,486

2,890

Accrued liabilities

3

70

91

Lease liabilities

1,875

42,096

35,797

Other liabilities

117

2,638

1,470

Employee benefits

2

46

38

Deferred income taxes

7

156

156

Total long-term liabilities

2,159

48,493

40,441

Total liabilities

3,243

72,839

57,765

Equity

Capital stock

132

2,974

2,974

Treasury shares

(9)

(198)

(170)

Contributions for future capital increases

Legal reserve

13

291

291

Additional paid-in capital

82

1,839

1,880

Retained (losses) earnings

(212)

(4,752)

438

Accumulated other comprehensive income (losses) (1)

(248)

(5,562)

116

Total equity

(241)

(5,409)

5,530

Total liabilities and equity

3,003

67,430

63,295

Total shares outstanding fully diluted

1,011,876,677

1,011,876,677

* Peso amounts were converted to U.S. dollars at end of period exchange rate for convenience purposes only.

(1) As of September 30, 2020 and as of December 31, 2019 the figures include a negative foreign exchange effect of Ps.5,265 million and a positive foreign exchange effect of Ps.14 million, respectively, related to non-derivatives financial instruments.

Controladora Vuela Compañía de Aviación, S.A.B. de C.V. and Subsidiaries

Consolidated Statement of Cash Flows – Cash Flow Data Summary

Unaudited

Three
months

ended
September 30, 2020

Three months

ended September 30, 2020

Three months ended September 30, 2019

(In millions of Mexican pesos)

(US Dollars)*

Net cash flow (used in) generated by operating activities

(5)

(113)

2,207

Net cash flow used in investing activities

(8)

(179)

(1,072)

Net cash flow used in financing activities**

(60)

(1,357)

(1,606)

Decrease in cash and cash equivalents

(73)

(1,649)

(470)

Net foreign exchange differences

(7)

(163)

156

Cash and cash equivalents at beginning of period

446

10,013

8,124

Cash and cash equivalents at end of period

365

8,202

7,810

* Peso amounts were converted to U.S. dollars at end of period exchange rate for convenience purposes only.

**Includes aircraft rental payments of Ps.1,724 million and Ps.1,657 million for the three months ended period September 30, 2020 and 2019, respectively.

Unaudited

Nine months

ended September 30, 2020

Nine months

ended September 30, 2020

Nine months ended September 30, 2019

(In millions of Mexican pesos)

(US Dollars)*

Net cash flow generated by operating activities

146

3,290

7,465

Net cash flow used in investing activities

(6)

(145)

(1,280)

Net cash flow used in financing activities**

(196)

(4,405)

(4,239)

(Decrease) increase in cash and cash equivalents

(56)

(1,260)

1,946

Net foreign exchange differences

66

1,482

453

Cash and cash equivalents at beginning of period

355

7,980

5,863

Cash and cash equivalents at end of period

365

8,202

7,810

* Peso amounts were converted to U.S. dollars at end of period exchange rate for convenience purposes only.

**Includes aircraft rental payments of Ps.4,350 million and Ps.4,787 million for the nine months ended period September 30, 2020 and 2019, respectively.

SOURCE Volaris