MEXICO · EARNINGS
Key Facts
- The company Volaris is a Mexican low-cost airline serving Mexico, the United States, Central and South America, and trades in New York as VLRS.
- What happened Third-quarter revenue rose 32% to US$1.04 billion, but the airline lost US$26 million.
- The cause Average fuel cost rose 57% to US$4.10 per gallon, and the airline expects lower profit margins this quarter.
- Why it matters The New York shares rose 8.5% on Tuesday 27 October to US$6.10.
- Power Index Mexico ranks 2nd of 14 in The Rio Times Latin America Power Index, with 71.4 points (October 2026 edition).
Volaris, the Mexican low-cost airline, crossed US$1 billion in quarterly revenue, yet still lost money as fuel and financing costs outweighed the growth. The airline reported on Monday 26 October 2026 a third-quarter net loss of US$26 million, a loss of 23 US cents per American depositary share (ADS), the form in which US investors hold the stock.
A year earlier Volaris had earned US$6 million. Total operating revenue rose 32.4% to US$1.04 billion, and CEO Enrique Beltranena called it a historic milestone.
Background on the company is in its Company Intelligence profile, and the planned merger with its rival Viva is covered in our merger report.
Strong Sales, Higher Fares
Revenue per available seat mile, the standard airline yardstick, rose 19.2% to 10.31 US cents, reaching double digits for the first time in the company’s history. The average base fare jumped 25.5% to US$55, and extras such as bags and seats brought in US$61 per passenger, up 8.4%.
Volaris booked 9.0 million passengers, up 14.3%, with Mexican domestic passengers up 13.7% and international passengers up 16.0%. Planes were 85.7% full, 1.3 percentage points more than a year earlier, on 11.1% more capacity.
Extras made up 52.8% of revenue. Sales from flights to and from the United States were US$392 million in the quarter, up from US$247 million a year earlier.
Why Fuel Turned a Profit Into a Loss
The average economic fuel cost rose 57.4% to US$4.10 per gallon, and total operating expenses climbed 40.2% to US$1.00 billion. Operating profit, known as EBIT, was US$34 million, half the US$68 million of a year earlier.
Cost per available seat mile excluding fuel rose 13.7% to 6.23 US cents, but came in below the company’s own guidance. EBITDAR, a cash-profit measure that adds back aircraft rent, was flat at US$263 million, while its margin fell 8.3 percentage points to 25.3%.
Financing costs added a US$75 million expense, against US$59 million a year earlier, and an income tax benefit of US$15 million softened the loss. For the first nine months, the net loss was US$225 million, compared with US$108 million in the same period of 2025.
Cash, Debt and the Fourth-Quarter Warning
Volaris held US$823 million in cash and short-term investments, 23% of its revenue over the past 12 months. Financial debt was US$598 million, down 14.9% from the end of 2025, and lease liabilities were US$3.20 billion.
For the fourth quarter, the airline expects capacity growth (seats flown) of about 4% and an EBITDAR margin of about 20%, against 37.2% a year earlier. It assumes a jet fuel price of US$4.40 per gallon and 18.70 pesos per US$.
For the full year it now expects an EBITDAR margin of about 21%, down from 32.5% in 2025, and capital spending of about US$350 million. The outlook includes compensation the company expects to receive for aircraft it expects to be grounded.
What Happens to the Viva Merger
Volaris and Grupo Viva Aerobus, another Mexican low-cost airline, announced on 18 December 2025 an agreement to form a new Mexican airline group under a holding company. Volaris shareholders approved it on 25 March 2026, but the deal is not complete and remains subject to closing conditions.
On 3 September 2026, shareholders approved changes to the company’s bylaws, its governing rules, that take effect only when the deal closes. The results filing says no accounting effect has been recognised.
What It Means for You
For US travellers, Volaris is a low-cost route to Mexico, and its US routes are growing fast. Higher fares, not just more seats, carried revenue this quarter, which is worth knowing before booking.
For holders of VLRS, the message is mixed: demand is strong, but fuel and a lower fourth-quarter margin keep profit thin. The ADS closed at US$6.10 on Tuesday 27 October 2026, up 8.5% from US$5.62 the day before.
What Is Not Known
The release does not say whether fares can stay this high once fuel prices fall. It expects the Viva merger to close in 2026, subject to regulatory approvals, but gives no exact date. The filing also gives no reason for the share jump on 27 October.
Frequently Asked Questions
How much did Volaris lose in the third quarter of 2026?
Volaris reported a net loss of US$26 million, or 23 US cents per ADS. A year earlier it earned US$6 million.
How much revenue did Volaris report?
Total operating revenue rose 32.4% to US$1.04 billion, with the quarterly total passing US$1 billion. Revenue per available seat mile rose 19.2% to 10.31 US cents.
Why did Volaris lose money despite higher sales?
The average fuel cost rose 57.4% to US$4.10 per gallon, and total operating expenses rose 40.2%. Operating profit fell to US$34 million from US$68 million.
What does Volaris expect for the fourth quarter?
It expects an EBITDAR margin of about 20% and capacity growth of about 4%. It assumes jet fuel at US$4.40 per gallon.
Sources: Volaris third-quarter 2026 results press release, Form 6-K Exhibit 99.1, Securities and Exchange Commission, 26 October 2026; New York Stock Exchange closing prices, 26 and 27 October 2026.
This article was produced by The Rio Times’ automated newsroom system. How we use AI · Report an error · Editorial responsibility: Matthias Camenzind, Editor-in-Chief
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