ControladoraVuelaCompañía de Aviación, S.A.B. de C.V. (VLRS) stock prices were up by 6.06% some time after market trading commenced on July 16th, 2021, bringing the price per share up to USD$23.28 early on in the trading day.
Expansion of VLRS’ Fleet
The second quarter of fiscal 2021 saw the company announce the incorporation of 5 new A320neo aircrafts to its existing fleet, which consisted of 92 aircrafts as of June 30th, 2021. The 6 A319s, 70 A320s, and 16 A321s have an average age of 5.4 years and an average of 188 seats per aircraft. 80% of the company’s aircrafts are sharklet-equipped, with 39% of the fleet boasting New Engine Option (NEO) models.
Fleet Breakdown
Over the next 18 months, the company anticipates incorporating 25 A320neo family aircrafts to its fleet, with the company hoping to end the fiscal 2021 year with 101 aircrafts and the year 2022 with 113 aircrafts. The company forecasts the percentage of A320neo family aircraft of its fleet to be in line with the company’s strategy for sustainability, coming in at 54% by the end of 2022.
Promising Financials
The second quarter of 2021 saw the company generate cash flow in the amount of USD$104.40 million, with the company reported a solid liquidity position of USD$532 million as of June 30th, 2021, representing 44% of the operating revenue generated over the previous 12 months. The net cash flow generated by operating activities came in at roughly USD$256.30 million, with cash outflows coming out to USD$39.10 million in investing activities and USD$149.09 million in financing activities.
Volatility of Exchange Rate
The comprehensive financing result for the quarter was down 2%, largely driven by a foreign exchange gain of almost USD$226 million. This was despite a 24% increase in the financial cost associated with the expansion of VLRS’ fleet. With the Mexican peso having depreciated by 5% against the U.S dollar, the exchange rate was up to Ps.20.05 per US dollar for Q2 2021, up from Q2 2020 having reported Ps.19.12. The end of the second quarter of 2021 ended with the Mexican peso appreciating 4% as compared to the exchange rate from the prior quarter.
Future Outlook for VLRS
Armed with the impressive expansion of its fleet of aircrafts, the company is keen to leverage its financial success to continue extrapolating its trajectory of success. VLRS is hopeful that the mitigation of the effects of the coronavirus and the return of the global economy to post-pandemic levels will further boost its growth to unprecedented levels.
