Slowing demand and a challenging fare environment have pushed Mexican low-cost carrier Volaris into the red in the second quarter, even as the airline says it is seeing a turnaround in the Mexican economy.
The carrier posted losses of Ps95 million ($7 million) before interest and taxes, reversing from the Ps102 million operating profit it reported in the same quarter in 2013.
Operating revenues for the quarter grew 9% to Ps3.31 billion while operating expenses grew 16% to Ps3.4 billion.
The airline reported a net loss of Ps75 million, compared with a net profit of Ps173 million a year ago.
Despite the losses, the carrier says its second quarter performance was an improvement compared to the first quarter. "In the second quarter of 2014, fare and demand environment showed early signs of stabilisation and then gradual recovery from the challenging fourth quarter 2013 and first quarter 2014," says Volaris chief executive Enrique Beltranena.
Volaris' passenger revenue per available seat mile fell 10.7% to 7 cents, while cost per available seat mile excluding fuel declined 1.5% to 5.4 cents.
Traffic grew 13.6% during the quarter, slower than the 15.1% growth in capacity. The airline's average load factor declined 1.1 percentage point to 81.6%.