Grupo Aeromexico NYSE: AERO reported record second-quarter revenue despite elevated jet fuel prices and a temporary domestic demand slowdown tied to World Cup travel patterns, executives said on the company’s second-quarter 2026 earnings call.
Chief Executive Officer Andrés Conesa said the quarter unfolded “largely as we anticipated,” with healthy demand in April and May and softer domestic trends in June as corporate and leisure travel patterns shifted around Mexico’s national team matches. Even with that disruption, Conesa said Aeroméxico delivered record revenue for both June and the full second quarter.
“Revenue performance was strong, with traffic growing 10.5% year-over-year during the quarter, a period that also saw the two best sales weeks in our company’s history,” Conesa said.
Chief Financial Officer Ricardo Sánchez Baker said total available seat miles increased 1.9% year-over-year, in line with company guidance. Total revenue reached approximately $1.5 billion in the second quarter, up 30% from a year earlier, while total revenue per available seat mile rose 10.5% and passenger revenue per available seat mile increased 10%.
Fuel Costs Pressured Margins, but Aeroméxico Stayed Within Guidance
Aeroméxico said high and volatile fuel prices were the main headwind during the quarter. Sánchez Baker said total operating costs increased 30%, primarily due to fuel. The company faced a fuel price headwind of approximately MXN 220 million compared with 2025, including roughly MXN 30 million of additional pressure versus assumptions included in its April guidance.
The company had previously expected to recover at least 50% of the incremental fuel burden through pricing and revenue management. Sánchez Baker said Aeroméxico exceeded that target, achieving a 76% fuel cost recapture rate in the quarter.
Adjusted EBITDAR totaled MXN 260 million, representing an 18% margin, while operating income reached MXN 68 million, resulting in a 5% operating margin. Both metrics were within the guidance range management provided in April. Conesa said that adjusted for the incremental fuel pressure above the company’s forecast, EBIT margins would have been at the top of the guidance range.
Excluding fuel, operating expenses rose 13%, reflecting the stronger Mexican peso, wage and salary inflation and higher depreciation associated with fleet growth in 2025, Sánchez Baker said.
World Cup Impact Was Temporary, Management Says
During the question-and-answer session, Evercore ISI analyst Duane Pfennigwerth asked management to quantify the World Cup’s impact on June demand. Conesa said Aeroméxico estimated the domestic revenue loss in June at approximately MXN 24 million, excluding positive effects from charter flights.
The airline operated charter flights connecting Mexico and the United States to transport several national soccer teams during the World Cup. Conesa described the overall World Cup impact on June revenue as “slightly negative,” but said demand patterns changed quickly afterward.
“We see a very strong recovery of corporate traffic and leisure traffic in the domestic market already for July, and very solid numbers for August and September,” Conesa said. “We believe it was a strictly temporary effect.”
Conesa also said the airline adjusted its network in advance of expected weaker corporate traffic in June, particularly around dates when Mexico’s national team played, allowing it to avoid some unprofitable flying.
Premium Revenue, Loyalty and New Routes Support Growth
Aeroméxico’s premium revenue mix reached 43% in the second quarter, up one percentage point from a year earlier and 17 percentage points compared with 2019. Conesa said that was the highest level in the company’s history and reflected continued strength in its premium offering.
He said customers did not “trade down” within the fare structure despite fare increases tied to higher fuel costs, which management viewed as evidence of resilient demand for premium products.
The company also highlighted customer experience and loyalty initiatives. Conesa said Aeromexico Rewards reached record participation, with 39% of passengers participating in the program during the quarter, up seven percentage points year-over-year. Aeroméxico also launched a new Inbursa co-branded credit card program during the quarter.
In response to a question from Morgan Stanley analyst Jen Spice, Conesa said the Inbursa credit card rollout was proceeding according to plan and that the company’s guidance reflected the transition from its prior credit card arrangement. He said half of cardholders who had received the new card so far had not previously held a co-branded Aeroméxico card.
Aeroméxico also launched two long-haul routes during the quarter: Mexico City to Barcelona and Monterrey to Paris. Conesa said both were off to a strong start. He added that the company plans to increase service to Seoul from five to seven weekly frequencies as additional wide-body aircraft become available.
Liquidity Remained Stable as Airline Reduced Debt
Sánchez Baker said Aeroméxico ended the second quarter with more than MXN 1 billion in cash and total liquidity above MXN 1.2 billion, including fully undrawn MXN 200 million revolving credit facilities.
The company generated approximately MXN 362 million in operating cash flow during the quarter, reduced financial debt by about MXN 70 million and ended the period with adjusted net debt below the year-earlier level.
Management said cash flow generation remained strong in the first half of the year despite approximately MXN 250 million of additional fuel cost expenses. In response to webcast questions, Sánchez Baker said Aeroméxico expects net cash flow from operating activities for the year to be between MXN 800 million and MXN 1 billion, with free cash flow close to MXN 100 million. He said annual capital expenditures are expected to be around MXN 450 million, including about MXN 300 million of maintenance CapEx.
Company Issues Second-Half and Full-Year Outlook
Looking ahead, Aeroméxico said it expects higher EBITDA and EBIT in both the third and fourth quarters compared with the same periods in 2025. For the full year, the company projects an operating margin in the low double-digit range.
For the third quarter, Sánchez Baker said Aeroméxico expects revenue between MXN 1.59 billion and MXN 1.62 billion, an adjusted EBITDAR margin in the mid-to-high 20s and an operating margin in the mid-teens.
For the fourth quarter, the airline expects capacity to increase approximately 6.5% to 8% year-over-year, supported by higher aircraft utilization and expanded operations at Mexico City International Airport after authorities approved an increase in hourly operations from 44 to 46 beginning with the next IATA season. Management said Aeroméxico expects to receive about 10 additional slot pairs as its share of the increase.
For full-year 2026, Aeroméxico expects ASM growth of 2% to 3%, total revenue growth of 13% to 14% versus 2025, an adjusted EBITDAR margin of 20.5% to 26.5% and an operating margin of 11% to 13%.
Conesa said international demand remains strong across Europe, the United States, Central America and South America. He also said the airline is prepared to adjust capacity if fuel prices remain volatile and demand does not support higher flying levels.
“We remain committed to managing capacity with discipline, investing in customer experience, and generating premium revenues,” Conesa said.
About Grupo Aeromexico NYSE: AERO
Grupo Aeroméxico is the parent company of Aeroméxico, Mexico’s long-established flag carrier and commercial airline group. The company operates scheduled passenger and cargo services, with a network that connects domestic destinations across Mexico and international markets in the Americas, Europe and Asia. Grupo Aeroméxico’s operations include mainline services as well as regional flying through its regional affiliates, airport ground-handling and cargo divisions that support its commercial network.
The carrier deploys a mix of narrow-body and wide-body aircraft to serve short-, medium- and long-haul routes, using single-aisle jets for domestic and regional markets and wide-body equipment for transcontinental services.
This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.
Before you consider Grupo Aeromexico, you'll want to hear this.
MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Grupo Aeromexico wasn't on the list.
While Grupo Aeromexico currently has a Moderate Buy rating among analysts, top-rated analysts believe these five stocks are better buys.
View The Five Stocks Here
Tesla, Nvidia, and Google helped shape the last era of market growth, but the next wave could come from a new group of companies. Inside this report, you’ll find 7 stocks that could play a major role in the next tech-driven market boom.
Get This Free Report
