The Mexican ultra-low-cost carrier is back on track after a few challenging years.
News & Analysis: Controladora Vuela Compañia de Aviación
Shares of Volaris lost a third of their value in the span of two days following the company's ugly first-quarter earnings report. But its stellar cost structure and strong balance sheet give the company the tools to make a comeback.
This Mexican airline is seeing pressure from all sides.
Management is working hard to restore Volaris' profit margin, but it could take a year or more for the company to get back on track.
Shares of Volaris have plunged by 60% since peaking in early 2016. However, the company may be on the verge of a sustainable turnaround.
Volaris stock has rebounded along with the Mexican peso in the past few months. The Mexican budget carrier's results are likely to perk up in the second half of 2017, which could help the stock make further gains.
Hawaiian Holdings stock rose on Friday following yet another strong earnings report. Meanwhile, Volaris stock plunged after the company reported a big Q1 loss.
A first-bag fee on transborder flights will help Mexican budget airline Volaris produce more stable profits in the future.
Southwest Airlines, Alaska Air, and JetBlue Airways will get all of the slots they requested in Mexico City.
Volaris' earnings power has deteriorated significantly over the past year, but the budget airline may still be an attractive long-term investment opportunity.