Oct 27, 2026 earnings call — Transborder growth and fleet right-sizing
Quarterly operating revenues surpassed $1 billion, up 32% year over year.
Revenue $1.0B (est $1.0B) · EPS $-0.23 (est $-0.64)
Key quotes
"Transborder revenues grew by more than 50% year over year supported by our expanding network stronger brand presence, attractive yields, and healthy capacity absorption contributing to stronger route level profitability."
"On the balance sheet, we expect lease liabilities to decline from approximately $3.2 billion to $2.8 billion by year end 2027."
"In a little over a year, Altitude has reached 2.3 million active members, Our focus now is to convert that scale into higher engagement travel frequency, spend, and customer lifetime value."
Analyst Q&A 7
Domestic vs international capacity split
Q (Michael Linenberg · Deutsche Bank): How should we think about next year's split between domestic and international capacity? Will the international push continue and drive most of the capacity growth?
A: The base case for 2027 is low single digit ASM growth driven mainly by aircraft returning to service and higher utilization rather than new deliveries. Domestic capacity is expected to decline slightly, low to mid single digits, and the balance of growth will be international. Management also said they will keep flexibility to adjust the plan as conditions evolve.
"If we look at the split between international and domestic, we are seeing a decline for the domestic market." — Holger Blankenstein
FX effect on margins and timing of growth
Q (Duane Pfennigwerth · Evercore): What is the P&L impact of a softer peso on revenue, yields, costs and margins? And did you mean the low single digit ASM growth comment for 2027 or for a quarter?
A: For every 5% peso depreciation versus the US dollar, EBITDA margin falls about 0.2 percentage points and EBIT margin falls about 0.9 percentage points. The low single digit ASM growth comment referred to the full year 2027 and the shape is expected to be similar across quarters. Management also emphasized flexibility to adjust capacity through the year based on fuel, FX and route profitability.
"For FX, for every 5% peso depreciation versus the US dollar, EBITDA margin decreases around 0.2 percentage points, while EBIT margin declined by around 0.9 percentage points." — Jaime Esteban Pous Fernandez (CFO)
Viva Aerobus merger timing and guidance drivers
Q (Rogerio Araujo · BofA): Can you update on the Viva Aerobus merger, timing for antitrust approval and integration start? Also, is the guidance pressure entirely fuel driven and how much is recapture?
A: Regulatory review is progressing; they have approvals from the DOJ and the Colombian Competition Authority and remain actively engaged with Mexico's National Antitrust Commission. Management said they cannot comment beyond what is publicly disclosed while the regulatory process is ongoing. They added that the guidance effect is driven by the higher Gulf Coast price and that revenue trends are similar to the third quarter while facing higher fuel prices.
"Beyond what we have publicly disclosed, there is nothing further we can comment on while the regulatory process is ongoing." — Enrique Javier Beltranena Mejicano (CEO)
Competition in transborder market
Q (Julia Orsi · JPMorgan): Do you see risk of more aggressive competition on the international/transborder market next year?
A: Years of network development and brand building give structurally robust yields and margins in the transborder market. Management expects their brand relevance and low cost/value proposition to keep them differentiated from U.S. legacy carriers, sees long-term growth potential and plans disciplined growth only where routes show clear economic contribution.
"We expect our brand relevance and the strength of our low cost advantage and value proposition to continue to set us apart from our competitors and U. S. Legacy airlines." — Holger Blankenstein
Mexico downgrade risk and aircraft-on-ground outlook
Q (Jens Spiess · Morgan Stanley): If Mexico were downgraded, would that imperil your US capacity shift? And how will aircraft on ground (AOG) progress through 2027?
A: Management said Mexican authorities are taking concrete actions to strengthen oversight and they are working with the government to prevent decategorization. The current run rate of capacity added this year will sustain next year's US growth in positive territory and they are evaluating more opportunities now that the Mexico City Metro Area is open. On AOG, the count should stay in the low twenties until summer 2027 and then resume falling to around 10 to 15 by year end, depending on shop timing.
"So, yes, the run rate of the capacity we added this year will sustain next year's US growth into a positive territory." — Holger Blankenstein
Fleet flexibility and CASM ex fuel outlook
Q (Filipe Ferreira Nielsen · Citi): How does your stated capacity flexibility map to the fleet plan? And how does that affect CASM ex fuel expectations to 2027?
A: They maintain flexibility: 3 aircraft are unencumbered and could be sold next year to reduce capacity, and there are 9 redeliveries available if they want to grow; they can grow or reduce capacity by 3%. Temporary cost pressures total around 0.4 to 0.45¢ of CASM ex fuel for this year and next, and management said those pressures will unwind after 2027 with CASM ex fuel normalizing into the 5¢ range during 2028.
"All those pressure will unwind after 2027, and we see our CASM ex fuel normalizing back into the 5¢ range during 2028." — Jaime Esteban Pous Fernandez (CFO)
Tax reform cost and beach demand trends
Q (Alberto Valerio · UBS): How does the new tax reform (1% revenue tax) affect Volaris next year? And do you see structural changes in demand for beach destinations?
A: They expect two main tax reform impacts: an incremental navigation cost of around $13 million for next year and a 17% increase in the nonimmigrant tax (DNR), which will be passed through to passengers. On demand, they are evolving the model to keep VFR and ULCC roots while attracting more multi-reason, higher-value customers through network changes and targeted marketing.
"The increase on the navigation cost by the Mexican authorities that amounts to around an incremental cost of $13 million for next year." — Jaime Esteban Pous Fernandez (CFO)