Volaris Costa Rica: ready to stimulate Central America-US market if DOT rejects Southwest objection

Expansion by Mexican LCC group Volaris in the Central America-US market is being held up by an objection from its former partner, Southwest Airlines. The business plan for Volaris' new Costa Rican subsidiary relies heavily on the US market, with up to eight US destinations from Costa Rica and other Central American countries.

Volaris Costa Rica has been aiming to launch services to the US in Sep-2017, starting with flights to Houston and Los Angeles, but has not yet secured approval from US authorities. Southwest, which partnered with Volaris in 2010 to 2013 by offering connecting itineraries, has raised objections and is urging the DOT not to award Volaris Costa Rica an exception to foreign airline ownership regulations.

The ramifications of the DOT ruling are significant for both Volaris Costa Rica and the overall Central American market. Central American countries have long complained about a lack of service and high fares, including to the US - which accounts for nearly half of the region's passenger traffic.