Volaris makes a move to leapfrog other Mexican LCCs with potential IPO

Now that the dust appears to be settling in Mexico's aviation industry after rapid changes during the last decade, the country's surviving upstarts are taking the next steps in their evolution through initial public offerings. Interjet opted to postpone its IPO in 2011 to await for more favourable market conditions, which must be improving given that its LCC rival Volaris has filed preliminary prospectuses for listings on both the New York and Mexican stock exchanges.

Volaris' moves to go public follow a recent declaration by fast-growing Brazilian carrier Azul that it is planning an IPO following its acquisition of fellow regional carrier TRIP in 2012. But the similarities end there as growth in Brazil's domestic market is slowing in parallel to cooling GDP growth. Brazil is also a much bigger domestic market served by only two LCCs while three LCCs continue to compete in Mexico, which has the second biggest domestic market in Latin America after Brazil.

Volaris and its Mexican LCC counterparts are still moving to seize on available growth opportunities within the country as a large swath of Mexico's residents still travel by bus. The calculus is offering fares similar to those charged by bus companies to Mexico's burgeoning middle class, which has been on a steady growth trajectory since 2000.