Gordon Tam, CFA
CFA, value, www.top10invest.com, long only

Volaris: ULCC Can Rely On Non-Ticket Sales To Make A Fortune

No doubt that 2013 was a tough year for Volaris (NYSE:VLRS). The share price got halved in the past year. Nevertheless, this creates a great entry point for any VLRS prospective investors to invest in a high growth stock with ample upside potential and defensive earning power.

Why VLRS share price declined

The sagging Mexico economic conditions that produced about 1% growth in 2013 drove VLRS to compete with Aeromexico by charging low airfares to maintain its load factor at around 80%. During 4Q 2013, VLRS's fares fell nearly 17%, and passenger yields fell almost 15%. In order to remain competitive, VLRS recorded a 7% fall in unit costs in 4Q 2013 and a 2% drop...

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