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- IATA Code
- ICAO Code
- Corporate Address
- Concesionara Vuela Comania de Aviación, SA de CV
Av. Prolongación Paséo de la Reforma 490, piso 1
- Main hub
- Mexico City Toluca Airport
- Business model
- Low Cost Carrier
- Domestic | International
- Association Membership
Volaris is a Mexican low-cost carrier with its main bases at Lic. Adolfo López Mateos International Airport in Toluca, and General Abelardo L. Rodríguez International Airport in Tijuana. The airline is the third largest airline in Mexico, after Mexican majors Aeromexico and Mexicana. The airline was established in 2003 when investment funds Discovery Americas I and Columbia Equity Partners formed a strategic alliance with central American airline TACA. Volaris operates 34 domestic routes to 21 cities in Mexico and three in the United States.
Location of Volaris main hub (Mexico City Toluca Airport)
LCCs will continue to evolve into hybrids of the original core model. CAPA and OAG consider Volaris 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.
379 total articles
46 total articles
Profit growth of nearly 98% by Spirit Airlines in 3Q2013 was dampened by the carrier’s revelation that it will encounter some cost headwinds at YE2013 and into 2014. These are driven by possible expenses related to an engine failure incident that occurred in Oct-2013, increasing costs due to new flight duty and rest time regulations for pilots and a 22% average growth rate during the next couple of years.
As those warnings cause some uncertainty around the carrier’s unit cost containment, Spirit’s rapid expansion into the continental US during the past few years is resulting in a typical pattern of perhaps strong 1Q and 3Q profits, and 2Q and 4Q performances that do not quite reach the levels recorded in the peak periods. The airline has stated that its 4Q2013 results should be similar to 1Q2013 – when top-line revenue grew 23% and net income increased 31% year-on-year.
Mexico’s publicly traded carriers Aeromexico and Volaris battled tough economic conditions in the country during 3Q2013 as FY2013 GDP growth estimates for Mexico continue to fall. To compensate both carriers are adopting strategies to preserve passenger volumes at the expense of yield, with Aeromexico in particular emphasising it aims to defend its position in the domestic market.
Even as yield pressure lingers into 4Q2013, both airlines are seeing positive booking trends for the last quarter of the year and into 2014. And each carrier appears to be focusing on international expansion in the short term to combat some of the weakness created by Mexico’s sluggish economy.
VivaAerobus joins Volaris and Interjet in placing large A320neo order. Can Mexico sustain all three?
Competition in Mexico’s dynamic market is set to intensify as the country’s smallest low-cost carrier is poised to at least triple in size over the next eight years following a landmark aircraft order with Airbus.
VivaAerobus has ordered 52 A320s, allowing for a rapid replacement of its current fleet of 19 737-300s and significant growth. VivaAerobus is currently a relatively small player in the Mexican market with only a 13% share in the domestic market and is a non-factor internationally as it has just one trans-border route.
VivaAerobus is now seeking to follow its closest competitor, Volaris, with an initial public offering which should provide the funds to support accelerated fleet and network growth. Market conditions in Mexico have improved significantly in recent years but there is a risk of a return to over-capacity and irrational competition given the fleet expansion plans at the country’s four main carriers.
Mexican airline Interjet has recently introduced a raft of new routes from Mexico City Juarez International including three pairings featuring the carrier’s latest fleet addition – the Sukhoi Superjet 100 – a 93-seat jet that Interjet is banking on for penetration into Mexico’s thinner markets and possibly international service.
In some ways the introduction of the SSJ100 marks a new era for Interjet, which has rapidly grown to become the second largest domestic carrier behind Grupo Aeromexico. The addition of a new fleet type is somewhat of a gamble given the SSJ100’s unproven track record. But Interjet appears willing to roll the dice in order to solidify its competitive standing among the four largest Mexican carriers. The carrier is devising strategies to capture the air travel demand developing among the country’s growing middle class who are opting for cheap air travel in lieu of taking their journeys by bus.
Having recently celebrated the significant milestone of competing an initial public offering, Mexican low-cost carrier Volaris remains bullish over the opportunities inherent in the Mexican aviation market as its domestic share continues to grow and its position in the international transborder space remains steady.
Key to Volaris’ belief in the robust opportunities present in Mexico is the growing appetite for air travel among the country’s increasing middle class. In the short term that thesis may prove tough to execute as the Mexican economy has been slowing and domestic passenger growth has not been as rapid during 2013 as recent years when Mexico’s carriers were scurrying to fill the void left by the collapse of Mexicana in late 2010.
As Volaris works to capture more of Mexico’s middle class, its competitors are devising their own strategies to compete in the dynamic Mexican market place. Aeromexico recently launched a new low-fare product scheme, "Contigo" while Interjet is planning a small market push as the first of its 20 93-seat Sukhoi Superjet 100s comes online. All of those dynamics should make for an interesting market place during the next couple of years as those carriers, along with VivaAerobus work to stake out their respective claims among the growing passenger base. Volaris is basing its future on a fleet comprised only of Airbus A320s while some of its competitors are utilising smaller jets to exploit thinner Mexican and transborder routes.
Mexico's largest carrier Grupo Aeromexico is preparing to launch its new “Contigo” product offering on 1-Oct-2013 in what appears to be an effort to intensify competition with Mexican low cost carrier Volaris on transborder routes from Guadalajara.
The new lower-fare product is not billed as a low-cost carrier within Gruop Aeromexico’s operating structure, rather it seems to be a small-scale effort to ensure it offers a competitive product to frequent transborder travellers from Guadalajara. However, with Aeromexico’s generally higher cost structure and the track record of these types of experiments at other large global network carriers, Contigo’s staying power is suspect.
Contigo debuts just as Volaris completes an initial public offering that netted nearly USD350 million. The IPO occurred as other Latin American carriers, most notably Brazil’s Azul, have shelved plans to access the public markets.
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