Mexican airlines review, Part 1: VivaAerobus faces tough conditions in 2014, postponing its IPO

Mexican low-cost carrier VivaAerobus began 2014 on a down note - cancelling a planned public offering valued at roughly USD226 million as it concluded market conditions were too dour and unpredictable to achieve an IPO successfully.

The cancellation occurred as VivaAerobus prepared for the first delivery of an Airbus A320. Its acceptance of the new jet marks a pivotal transition from older Boeing 737-300 narrowbodies to similar aircraft operated by its fellow low-cost rivals Interjet and Volaris.

VivaAerobus' decision to shutter accessing the public markets does leave some questions as to how it will finance the 52 Airbus jets it has on order as six of the aircraft are scheduled for delivery in 2014. On a broader scale, VivaAerobus remains the smallest carrier among the four largest Mexican airlines, three of which (including VivaAoerbus) define themselves as low-cost carriers. If the projected rebound in Mexico's economy fails to materialise during 2014, VivaAerobus' greater exposure to the domestic market could create challenges for the carrier's yet-to-be defined strategy for the future.