Controladora Vuela Compañía de Aviación SAB de CV Q2 FY2024 earnings call

• Volaris achieved its highest Q2 EBITDAR despite fleet grounding due to accelerated engine inspections, having managed capacity reduction for nearly a year. • Mitigation plan to address groundings is on track, achieving guidance since last year's third quarter. • GTF updates: Confident to improve full-year ASM guidance to a year-over-year reduction of approximately -14% from previous -16% to 18%; Pratt & Whitney making progress on spare parts and MRO capacity; new facility in Asheville, NC started operations. • Commercial performance: TRASM up 12%, load factor 85.5%, ancillaries over 50% of revenues, on-time performance 85.6%, and new routes announced. • Financials: Total operating revenues $726 million, down 7%; CASM up 9%; EBIT $66 million, up 29%; EBITDAR $261 million, up 23%; net income $10 million.

Volaris recorded its highest absolute EBITDAR for the second quarter. In Q2 2024, TRASM was $0.0889, a 12% year-over-year increase. Load factor was 85.5% compared to 84.6% in Q2 2023. Despite a 17% lower capacity, total operating revenue contracted just 7% year-over-year. Ancillaries comprised more than 50% of total revenues, with ancillaries per passenger rising 15% year-over-year to $53. The domestic market had strong demand with load factors above 90%, and the US cross-border capacity addition bolstered unit revenue and profitability.

• Improved full-year ASM guidance to -14% year-over-year from previous -16% to 18%. • Third quarter 2024: Expect ASM reduction of approximately 14% year-over-year, TRASM of around $0.093, CASM ex-fuel of approximately $0.056, and EBITDAR margin of around 33%. • Full-year 2024: Expect ASM reduction of around 40% year-over-year; EBITDAR margin 32% to 34%; CapEx net of finance fleet predelivery payments $100 million.

• Continued impact of engine inspections with average turnaround time of 280-350 days; peak engine process in current quarter. • Industry supply chain disruptions and other uncertainties affecting operations and guidance.

Q: About industry capacity flex during peak demand A: Domestic capacity constrained, stable schedule with peak lines added, July trends encouraging Q: Full-year capacity reduction change A: Improvement due to better spare parts and materials, average turnaround time 280-350 days, expecting 32 engines back in second half Q: Engine supply and perpetual power agreements A: No immediate plans, focus on profitability, most additional engines are purchased, FHA agreement with Pratt helps Q: Tulum airport operations A: Guadalajara-Tulum service starts in fourth quarter, booking curves shaping up Q: 2025 capacity and grounded planes A: Peak in third quarter 2024, gradual return to service, not reaching 2023 capacity levels in 2025 Q: Revenue collection in dollars vs costs A: ~45% revenue in dollars, ~2/3 costs in dollars, gap narrowing Q: v.club growth A: ~15% of sales, focused on recurring revenue, v.club and v.pass programs Q: Maintenance line visibility A: Maintenance costs predictable, timing affecting quarters, expected CASM ~$0.055 full year