Grupo Aeromexico Q4 Earnings Call Highlights
View original at finance.yahoo.comGrupo Aeromexico Q4 Earnings Call Highlights Grupo Aeromexico logo Grupo Aeromexico (NYSE:AERO) executives told investors the carrier finished 2025 with a strong fourth quarter, citing improving demand trends in the second half of the year, record profitability metrics, and continued progress on fleet and customer-expe…
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Peso strength can lift travel demand
80% confidencePlanning assumptions include an average exchange rate of about 18.3 pesos per U.S. dollar and fuel at roughly $69 per barrel, with an estimated crack spread around $25 per barrel
80% confidenceAeromexico plans to increase ASM capacity by 3% to 5% for full year 2026, with growth beginning in the second quarter due to a high first-quarter baseline
80% confidenceBoth Aeromexico and Delta sold their TechOps stakes, resulting in a $71 million profit recognized in the P&L
80% confidenceFull-year performance benefited from efficiency initiatives and improved fuel consumption per ASM, but these gains were offset by higher labor costs from collective bargaining renegotiations, higher depreciation tied to fleet growth, IPO-related expenses, and a stronger Mexican peso in the second half that increased peso-denominated costs
80% confidencePremium-led demand from corporate and high-income leisure travelers remained strong
80% confidenceAfter the COVID-19 crisis, Aeromexico and Delta transferred TechOps operations, management, employees, and licenses to a third party in 2022, and Aeromexico's ongoing income related primarily to leasing the facilities, which was not material
80% confidenceFinancial debt decreased by $63 million in the fourth quarter and by $156 million for the full year, ending 2025 with adjusted net debt to EBITDA of 1.8x
80% confidenceThe share of customers participating in Aeromexico's loyalty program reached a record 37% in the fourth quarter, up seven points year-over-year and up 13 points since the program's reacquisition and rebranding in 2023
80% confidencePremium unit revenue growth in the fourth quarter ran six points ahead of the main cabin year-over-year, driven by improvements in paid load factor and yields tied to investments in premium experience and progress in selling premium products
80% confidenceAs Aeromexico has grown its MAX fleet, it relies less on the Querétaro facility
80% confidenceFourth-quarter operating income was $303 million with a 21% margin, a record for a fourth quarter
80% confidencePressures were most pronounced in domestic border cities and the U.S. market, prompting the company to right-size capacity in affected geographies
80% confidencePremium revenue represented approximately 42% of total revenues, nearly 17 points above pre-pandemic levels
80% confidenceThe fourth quarter confirmed the recovery momentum that began in the prior quarter, as demand strengthened meaningfully in the back half of the year across both domestic and international markets
80% confidenceFourth-quarter revenue totaled $1.4 billion, up 3% year-over-year excluding extraordinary items
80% confidenceAeromexico ended the year with $1.0 billion in cash and cash equivalents; including a $200 million undrawn revolving facility, total liquidity was approximately $1.2 billion, or 23% of last-12-month revenues
80% confidenceImproved performance was attributed to higher load factors and stronger unit revenues, supported by network discipline and revenue management actions
80% confidenceFull-year 2025 passenger revenue declined 4.4% year-over-year and passenger unit revenue declined 4.9%, reflecting currency, economic, and geopolitical headwinds earlier in the year
80% confidenceThe fourth quarter produced record-breaking performance for passenger revenue and passenger unit revenue, which rose 4.3% and 6.2% year-over-year, respectively
80% confidenceFourth-quarter adjusted EBITDA reached $502 million with a 35% margin, the highest quarterly EBITDA on record
80% confidenceThe airline has flexibility to respond to potential changes at Mexico City Airport and possible industry consolidation in Mexico
80% confidenceThe U.S. DOT restriction is a slight negative to neutral for 2026 given Aeromexico's prior growth into the transborder market
80% confidenceConsensus estimates call for Mexican GDP growth of 1.2% to 1.5% in 2026
80% confidenceAeromexico transported approximately 25 million passengers in 2025 and ended the year with 165 operating aircraft, up 17 aircraft year-over-year
80% confidenceAeromexico plans to grow capacity by around 4% in 2026 with a disciplined approach focused on resilient markets and profitability
80% confidenceAeromexico reported total revenue of $5.4 billion in 2025, up 2% versus 2024 when excluding extraordinary non-recurring items
80% confidenceFull-year adjusted EBITDA of $1.7 billion and a 31% margin is the highest in company history
80% confidencePeso strength effect on demand historically shows up quickly in booking curves
80% confidenceOperating cash flow totaled $913 million in 2025
80% confidence