Negative Shareholders' EquityNegative equity and roughly $4B of debt create a persistent structural leverage problem that limits financial flexibility. This capital-structure weakness raises refinancing and covenant risk, constrains strategic optionality (fleet, network investments) and elevates the firm's vulnerability to revenue or cost shocks over the medium term.
Fuel & Currency SensitivityElevated jet fuel and a stronger peso have materially increased costs, compressing margins. Management expects phased fuel-cost recapture (50% Q2 → 100% Q4), but until pass-through and hedging fully work, earnings and cash flow remain exposed to commodity and FX swings, a structural margin risk for airlines.
Volatile Cash ConversionAlthough operating cash flow is positive, free-cash-flow conversion lags net income and has fluctuated materially. This inconsistent cash generation limits capacity to accelerate debt paydown, invest in growth or resume buybacks, leaving the company sensitive to capital spending timing and near-term margin pressure over the next several quarters.