Volaris

Volaris and VivaAerobus continue their rapid climb to grab market share in Mexico

Mexican low-cost carriers Volaris and VivaAerobus are continuing to build up domestic market share during 2013 as Interjet appears to be holding its own on routes within Mexico while it awaits delivery of its first 93-seat Sukhoi Superjet 100 during 2H2013, when it plans to make a push into markets that are too thin for its current fleet of 150-seat Airbus A320 aircraft.

Volaris and VivaAerobus should continue to grow their share of the Mexican domestic market during 2013 as both carriers have stated an intent to exploit opportunities within Mexico, reflected by plans for each airline to make a push from Cancun to target Mexican travellers with increasing discretionary income.

Aeromexico plans more capacity growth in 2013 as delayed 787s are deployed to Europe and New York

Aeromexico saw its profits drop for the second consecutive year in 2012 as it was only able to grow passenger traffic by 3% despite double-digit growth for the overall Mexican market. But Mexico’s only surviving legacy airline group remains in the black and its outlook remains relatively bright given its strong position in the Mexican market and the resurgence of the country’s economy.

Grupo Aeromexico is planning to grow capacity (ASKs) by a further 6% in 2013, matching the 6% capacity increase from 2012. But the group is targeting higher RPK growth and load factors, which it hopes will allow it to regain the share of the domestic market it lost in 2012.

Internationally, Aeromexico is planning to grow capacity by up-gauging routes, including replacing 767-200s with new 787-8s to London and Paris. Aeromexico also plans to deploy its first batch of 787s to New York, which it currently only serves with 737s. Aeromexico now expects it will receive three 787-8s in 4Q2013, representing a delay of about three months due to the current grounding of the global 787 fleet.

Mexico returns to double-digit domestic growth in 2012, boosting outlook for Aeromexico and LCCs

Mexico’s domestic market recorded double-digit growth in 2012 for the first time in five years and only the second time this century. The Mexican aviation industry has reached its healthiest point since deregulation led to the launch of five low-cost carriers seven years ago. The market now features a strong legacy airline group and three LCCs which are seeking to cash in on their relatively strong positions by holding initial public offerings.

Mexican carriers flew 28.1 million domestic and 5.9 million international passengers in 2012, according to newly released statistics from Mexico’s DGAC. Domestically the market grew by 10% while the much smaller international market grew by 23%. Foreign carriers serving Mexico recorded much more modest growth of 3%, but still dominate Mexico’s international market with 21.2 million passengers carried in 2012.

Mexico’s LCC Volaris plans more rapid domestic expansion in 2013

Mexico’s Volaris is planning another year of rapid expansion as the low-cost carrier sees further opportunities in the Mexican domestic market. The airline also expects to further expand during 2013 in the US, where it now has a network of 10 destinations, but for the second consecutive year faster capacity growth will be pursued domestically.

Volaris, which serves 27 destinations in Mexico, is now the third largest carrier in Mexico’s domestic market on a seat capacity basis but the largest on an ASK basis. Volaris expanded its fleet by seven aircraft in 2012, ending the year with 41 A320 family aircraft.

The airline expects to end 2013 with at least 44 aircraft but could end up with up to 48 aircraft if it decides to postpone the phase out of A319s.

United ends 2012 as world's biggest airline, Emirates third. Turkish and Lion Air the biggest movers

United Airlines, following its merger with Continental, has ended 2012 as the world's biggest airline measured by available seat kilometres for the current week, ahead of second placed Delta, whose capacity fell 0.3% year on year, according to Innovata. Fast growing Dubai-based carrier Emirates is the world's third biggest airline by this measure, and could be in second place by the end of 2013 if the past year's growth rates are maintained.

Southwest Airlines remains easily the largest LCC, while Lion Air and Jetstar have each climbed the LCC top 10, to sixth and seventh places respectively, overtaking Westjet. Atlanta Airport (just) remains the world's largest, ahead of Beijing Capital Airport, in terms of seat throughput for the week, but this ranking seems certain to reverse in 2013.

The biggest movers in the overall World Top 50 list include Turkish Airlines, which jumped seven places to rank 15th globally, while Indonesian carrier Lion Air vaulted eight places to enter the global Top 40 for the first time. Iberia and India's Jet Airways fell four and seven places in the 2012 rankings, respectively.

Global Airline Alliances collectively grew capacity at higher than the world rate, with SkyTeam expanding fastest of the three majors, although Star Alliance remains easily the largest.

Aeromexico predicts a rise in domestic market share as rivals continue to grow

Mexico’s largest carrier Aeromexico predicts a rebound in its domestic market share during 4Q2012 after watching its rivals grow in the market during the last year as they worked to seize on opportunities created by Mexicana ceasing operations in Aug-2010. Aeromexico’s management during the last three months of 2012 plans to focus more on building load factor instead of yield strength, which company executives believe will shore up its standing in the domestic market after the summer high season that was tilted more heavily towards leisure traffic. The carrier is also planning a trans-Atlantic push as it works towards the launch of new service to London Heathrow and forging a partnership with a Middle Eastern carrier to funnel traffic through its new European destination.

Aeromexico’s focus on improving yields was reflected in the nearly 7% growth the carrier recorded in that metric during 3Q2012, which helped to drive the carrier’s unit revenue growth up 3.6% year-over-year. While the yield strength reflects Aeromexico’s ability to garner favourable pricing, its 6% rise in capacity year-over-year in 3Q2012 outpaced the 2% traffic growth, driving the airline’s load factors down by 3.7ppt in 3Q2012 to 77%.