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Mexican airlines review Part 3: Volaris believes it can rebound from a tough 2013

Analysis

Mexican ultra low-cost carrier (ULCC) Volaris is exuding confidence that it can attain margin expansion in 2014 even as it predicts an economic rebound in Mexico will not take hold until the second half of the year.

Volaris' bullishness follows a challenging 2013 for all of Mexico's carriers as the country's GDP was a weak 1%. The weak economy resulted in yields at both Aeromexico and Volaris sinking, and Volaris recording a loss for 4Q2013 and a 30% fall year-over-year in profits for FY2013.

After battling pressure from Aeromexico at its third largest base in Guadalajara during 2013, Volaris predicts some rationality should be restored to the market in 2014 even as it establishes a new base in Monterrey, which will increase capacity in a market important to all four of Mexico's major carriers.

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