Volaris (VLRS.N) 2Q‘26 Results: Solid and In-line Earnings, Offset by Guidance Softness

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Volaris (VLRS.N) 2Q‘26 Results: Solid and In-line Earnings, Offset by Guidance Softness

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21 Jul 2026 20:22:07 ET │ 13 pages

Volaris (VLRS.N)

2Q'26 Results: Solid and In-line Earnings, Offset by Guidance Softness

CITI'S TAKE

Neutral / High Risk Net loss of -$127M was in line with Citi and consensus estimates. The

overall print looked mixed in our view, with in-line earnings offset by Price (21 Jul 26 16:00) US$7.98

weakness implied in guidance. 2Q results demonstrated the company's Target price US$8.80

resiliency to fuel spikes, with yields responding positively to capacity Expected share price return 10.3%

rationality and driving EBITDAR margins to close the quarter better than Expected dividend yield 0.0%

expected and above guidance. FCF generation was another positive Expected total return 10.3%

highlight, driving a stronger-than-expected BS. On the other hand,

Market Cap US$1,001M although the 3Q and FY26 guidance looked cautious on fuel and suggests

continued capacity rationality, the TRASM pass-through looked softer

than anticipated, potentially pressured by strong 3Q capacity growth.

Moreover, elevated ex-fuel costs seem to be enduring for longer than Filipe NielsenAC

expected on the back of low fleet utilization, pressuring EBITDAR margins +55-11-4009-5213

beyond the fuel price difference between Citi's and Volaris' expectations. filipe.nielsen@citi.com

We maintain Neutral/HR.

2Q26 results — Net loss of -US$127M (EPADS of -$1.11) compares to CitiE’s -

US$127M (-$1.11), Bloomberg consensus of -US$127M (-$1.11) and to -US$63M (-

$0.54) in 2Q’25. Revenue of $859M was slightly above CitiE’s $855M and

consensus of $841M, increasing +24% y-o-y. TRASM growth was supported by a

25% increase in average base fares, led by the strength of international markets.