- CAPA Analysis
- Schedule Analysis
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- US Route Data
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- IATA Code
- ICAO Code
- Corporate Address
- Aeropuerto de Monterrey, Terminal C, Zona de carga
Carretera Miguel Alemán Km. 24
Apodaca, Nuevo León, México
- Main hub
- Monterrey Escobedo International Airport
- Business model
- Low Cost Carrier
- Domestic | International
VivaAerobus launched its first services in Nov-2006. The Mexican low-cost carrier operates from its main base at Monterrey Escobedo International Airport providing primarily domestic services to Mexican Tier I cities and leisure destinations. The carrier also operates to other smaller regional centres. VivaAerobus provides a single international service to Houston George Bush Intercontinental Airport, in the US. The carrier was formed as a result of a strategic alliance between Grupo IAMSA, one of Mexico’s leading bus transportation providers and Irelandia, the investment vehicle of the Ryan family, founders of Ryanair. Irelandia has also been involved in starting sister carrier, VivaColumbia. Similar to other Mexican carriers such as Interjet (delaying plans) and Volaris (floated Sept-2013), VivaAerobus intends to enter into an IPO to aid its expansion strategy but has pushed back plans to at least 2015 because of volatile market conditions. The airline currently utilises a mix of both Boeing 737 and Airbus A320 aircraft and is currently undergoing a transition to an all-A320 fleet, expected to be complete by 2016.
Location of VivaAerobus main hub (Monterrey Escobedo International Airport)
LCCs will continue to evolve into hybrids of the original core model. CAPA and OAG consider VivaAerobus fits the LCC profile and it is included in our reporting on this basis. Please note: when reporting for an airline is changed from or to LCC the historical data is not affected and it can lead to a distortion in the current reported data. Contact us if you have any queries.
239 total articles
44 total articles
Mexican low-cost airline VivaAerobus is making a US transborder push in 2H2014 after flirting with the market during the past few years with various routes that were ultimately culled.
Presently VivaAerobus operates a single transborder route, offering flights from its base in Monterrey to Houston Intercontinental. Its decision to re-launch some transborder flights and enter into new US markets is likely driven by its introduction of more fuel efficient Airbus A320s during 2014, and challenges faced by all Mexico’s domestic airlines in recovering pricing traction as a result of tenuous economic conditions in the country.
Armed with newer aircraft and a knowledge of transborder market dynamics, VivaAerobus has a reasonable chance of success on its new routes. But in some of the markets it faces familiar competitors that are also looking to improve their fortunes by exploiting opportunities for better margins from transborder service.
Aeromexico recorded a sharp drop in profits in 2Q2014 as market conditions in Mexico became unfavourable. An economic slowdown has coincided with rapid capacity expansion by Aeromexico and the overall Mexican market, putting pressure on yields.
Aeromexico’s capacity was up by 17% in 2Q2014, driven by a 27% spike in international ASKs. The group has adjusted domestic capacity, which was up by less than 3% in 2Q2014, but competitors continued to pursue aggressive domestic expansion.
Despite the relatively disappointing results Aeromexico has been consistently profitable over the past four years and boasts the highest margins in the Mexican airline industry. Challenging market conditions are likely to persist over the short term but the group’s medium to long term outlook is relatively bright. Following its recent market share gains Aeromexico should be in prime position to benefit as the Mexico economy improves and competition becomes more rational.
Colombia’s aviation market appears relatively stable despite the steady growth of the country’s low-cost airline VivaColombia through the establishment of a base in Bogota during 2014 in its quest to attain a 20% market share within Colombia.
For the first three months of 2014, VivaColombia’s domestic market share grew to approximately 10% from 8% the year prior. The country’s other domestic airlines also kept their respective shares at essentially the same levels year-on-year, which shows that the supply and demand balance is fairly rational.
The number of Colombia’s international passengers also grew at a solid clip, reflecting the country’s overall stability, decent economic prospects and a growing middle class that remains attractive to all airlines serving Colombia.
Southwest officially became an international airline in early Jul-2014, when it transitioned service operated by its AirTran Airways subsidiary to its own brand. The acquisition of AirTran in 2010 allowed Southwest to take a low-risk approach to introducing its own branded flights to international destinations.
For years prior to acquiring AirTran, Southwest often talked about its aim to eventually extend its domestic network beyond the US borders. Purchasing AirTran allowed Southwest a low-cost and low-risk way to fully study and understand the nuances of operating to Mexico and the Caribbean before assuming the routes under its own brand - which is obviously sacred to the company.
Even as the expansion into international markets is a key pillar of Southwest’s long-term strategy, the reality is markets outside the US will only comprise a small portion of Southwest’s capacity in the near-to-medium term. But as Southwest grows internationally it may find itself facing increasing competition from Spirit and JetBlue, raising interesting questions about Southwest’s longer-term pricing traction and revenue performance on some international routes.
A difficult market climate is persisting in Mexico’s aviation business, creating challenges for the country’s airlines in gaining pricing traction – a problem that plagued carriers throughout much of 2013 and continues in 2014.
Slow economic growth in Mexico was one factor contributing to a 1Q2014 loss by ultra low-cost carrier Volaris, which also continued to face pressure in some of its markets from capacity increases by its major competitor Aeromexico.
Similar to sentiments Volaris has expressed in the past, the carrier believes there is potential for improvements in Mexico’s economy. But the airline is also taking steps to mitigate Mexico’s economic weakness to improve its fortunes.
Mexico’s largest, and sole global, carrier Grupo Aeromexico appears to be executing a dual strategy in 2014, split between retaining its commanding presence in the domestic market while leveraging its international networks and partnership roster to ensure it can weather the country’s economic uncertainty.
Two of the carrier’s major milestones in 2014 are the introduction of the Boeing 787 widebody and overhauling its operations in Mexico City through expanding connecting banks and eliminating small jets from its largest hub.
As the competitive dynamics in Mexico’s domestic space continue to shake out, Aeromexico is pressing forward to build a strong foundation to withstand increasing pressure on routes within Mexico.