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Volaris' Comeback Continues With Stellar Q2 Earnings

TheMotleyFool

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Volaris' Comeback Continues With Stellar Q2 Earnings

After a stellar run of soaring profits and huge stock price gains in 2015 and 2016, Volaris (NYSE: VLRS) hit the skids beginning in late 2016. Over the following two years, a combination of rising fuel prices, depreciation of the Mexican peso, periodic overcapacity in the Mexican domestic and transborder air travel markets, and the U.S. crackdown on illegal immigration drove massive erosion of Volaris' profitability.

Indeed, Volaris' adjusted operating margin, which stood at 11.7% in 2016 and 13.8% in 2015, came in just below breakeven in 2017 and fell further into negative territory last year. Not surprisingly, this caused the stock to plunge, too.