- CAPA Analysis
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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
- Airline Group
- Part of Grupo Viva
VivaAerobus launched its first services in Nov-2006. The Mexican low-cost carrier operates from its main base at Monterrey Escobedo International Airport providing domestic services to Mexican Tier I cities and leisure destinations as well as to the US. The carrier also operates to other smaller regional centres. VivaAerobus 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, with both carriers forming part of multinational airline group; Grupo Viva. The airline currently utilises a mix of both Boeing 737 and Airbus A320 aircraft and is undergoing 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.
261 total articles
VivaAerobus to start service from Mexico to Dallas/Fort Worth International Airport in March of 2015
VivaAerobus says 'difficult' to predict impact on fares from US-Mexico ASA, but will see improvement
48 total articles
Grupo Aeromexico is embarking on 2015 with several initiatives under way to strengthen its network to ensure it maintains its stature as Mexico’s leading airline. The company is rebanking its strategic hub at Mexico City while resuming limited operations at nearby Toluca to alleviate some operating constraints at Mexico City Juarez.
Aeromexico is also in the midst of building up its hub at Monterrey and touting a new shuttle product from Mexico City to the country’s busiest business markets. At the same time, the airline is expanding its international footprint with new destinations in Latin America as well as new North American markets.
The network optimisation occurs as Mexico’s economic performance measured by GDP growth looks to improve year-on-year in 2015. Some of the challenges Aeromexico faced in 2014 are lingering into 2015, including pricing traction in Mexico’s domestic market. But Aeromexico seems to be taking the necessary steps to blunt the weakness that still may be present in Mexico’s domestic aviation market through efforts to maximise the vast connectivity it can offer compared with its rivals.
A newly revised air services agreement between Mexico and the US that eases limits on the number of airlines allowed to operate on routes between the two countries is a welcome development for airlines operating in both regions. But it is particularly interesting for Mexico’s airlines given that their penetration in the transborder space still pales in comparison to US airlines operating between the two countries.
The new pact does not take effect until Jan-2016, which means that the lifting of restrictions is some way in the future. But in the meantime Mexico’s airlines still have ample opportunity under the existing agreement, and are no doubt evaluating new opportunities created by the new air services arrangement.
Mexico and the US struck the new accord as all of Mexico’s airlines are making a transborder push to diversify from the domestic market, which has been weaker the last couple of years due to Mexico’s sluggish economy. Key to the execution of the expansion is ensuring demand is robust enough in transborder markets in order to maintain favourable yields on those routes.
Armed with approval to introduce service from Houston Intercontinental to three markets in Mexico, Spirit Airlines has the potential to create a new layer of competitive dynamics in the market as Southwest prepares to add international flights from a new terminal at Houston Hobby in late 2015.
Spirit has not formally announced the launch of new international flights from Houston Intercontinental; but its moves to secure authority for service to Mexico show that it aims to position itself as a formidable competitor to Southwest and legacy airlines alike.
Spirit’s work to gain approval for the new service to Mexico is within the framework of a bilateral that limits the number of airlines on specific routes, so Spirit may be attempting to secure a place in key leisure markets as Southwest plots its international strategy from Houston.
Mexican airlines Aeromexico and Volaris are sticking to their proclaimed strategies of deploying most of their capacity into international markets as the Mexican economy slowly rebounds from a sluggish 2013. Through the first eight months of 2014 each airline increased their international capacity and traffic significantly, betting that yields are stronger in international markets.
The competitive overlap between Aeromexico and Volaris on each airline’s top US transborder markets is not overwhelming, and Volaris has previously stated that it is targeting routes with a higher percentage of visiting, friends and relatives (VFR) travellers.
Aeromexico’s and Volaris’ rival VivaAerobus is also making a new transborder push during 2014, upping competition with Aeromexico and Interjet on some of its international services. It is tough to determine if the push is creating oversupply; but the international growth indicates Mexico’s airlines are attempting to counter weaker yields on the country’s domestic routes.
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.