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VLS-2012-01 - LARGEST MEXICAN ORDER
VLS-2013-04 - FIRST SHARKLETS
VLS-2014-07-TO DENVER USA
VLS-2014-11 - GUADALAJARA TO ORLANDO
VLS-2014-11 - LEON TO OAKLAND
VLS-2014-12 - TO FT LAUDERDALE
VLS-2015-03 - TO OAKLAND USA.jpg
VLS-2017-03 - Guadalajara to Houston.jpg
VLS-CABIN ATTENDANTS - 2015-03.jpg
Formed in 2005 and started operations in 2006. Formerly known as "Vuela." A K A Concesionaria Vuela Compania de Aviacion. Domestic, regional, & international, scheduled & charter, passenger & cargo jet airplane services.
Av Antonio Dovali Jaime, 70
Torre B Piso 13
Mexico City 01210, Mexico
The population of Mexico City is 20 million.
Mexico was established in 1821, covers an area of 1,958,201 sq kms, its population is 101 million, its capital city is Mexico City, and its official language is Spanish.
In 2003, Discovery Americas I, a private fund, joined (TACA) (TAC), an airline with 75 years of experience in the American market. Together, they landed the idea of creating a new airline in Mexico. The project planning took 2 years, and after getting the permission to launch this new public service, two major companies joined up the venture: Grupo Televisa and Inbursa (part of Grupo Carso). They backed up the investment potential.
Volaris (VLS) crossed the sky for the 1st time on March 13, 2006 on its maiden flight Toluca to Tijuana. Then, Toluca Airport became its ground operation base.
On July 12, 2006, the World Bank, via its Latin American branch, granted Volaris (VLS) a 40 million dollar financial support, that can be seen as a sign of confidence for this project. This provided the stability of a 130 million dollars overall investment.
As a high-efficiency airline, Volaris (VLS) decided to offer totally different services from those of traditional airlines. The use of Toluca Airport, in order to avoid the traffic and jam problems of Mexico City's Airport, is one of them.
(VLS) also offers exclusive shuttle service, ground transportation that takes passengers, on the day of their flight, between Mexico City (at Santa Fe area) and Toluca Airport; Downtown Puebla and Puebla Airport; and Downtown San Diego, California and Tijuana Airport.
January 2006: Mexican startup Volaris (VLS) signed a deal with Airbus (EDS) for 16 firm A319s and 40 options on A320 family airplanes. The airplanes will be configured for 144 passengers in a single-class layout and will be powered by IAE (V2500)s. (VLS) will commence revenue flights in March with 4 leased A319s from its hub in Toluca, serving domestic markets. "The A319 is the ideal airplane for the start-up of our operations," Chairman Pedro Aspe said.
(VLS) is a partnership between Mexican bank Inbursa, investment fund Protego-Discovery, (TACA) Airlines (TAC) and broadcasting giant Televisa.
Airbus (EDS) said 235 A320 family airplanes now have been ordered by 8 Latin American customers.
International Aero Engines (IAE) said its contract with Mexican start-up (VLS) to provide (V2500) engines for its order of up to 56 A319s will be worth up to $950 million, if all options are exercised. The airplane order consists of 16 firm and 40 options. (VLS) also signed a long-term engine Maintenance Repair & Overhaul (MRO) agreement, that includes comprehensive support and off-wing services under the recently launched (V2500) Select approach. "Everyone at (IAE) is delighted to be able to play a part in this new venture, which is backed not only by some of Mexico's leading businessmen but also with the management, operational and commercial know-how of the (TACA) (TAC) group of airlines," (IAE) Senior VP Customer Business Bob Keady said. (VLS) will serve Tijuana, Monterrey, Guadalajara, and Cancun, when it commences operations from its Toluca base in March.
1 A319-132 (1159, N474TA), (TACA) International (TAC) wet-leased. 4 A319-132's (2277; 2296; 2335; 2362), ex-Independence Air (BLR).
March 2006: 2 A319-132's (2657, XA-VOI; 2666, XA-VOL), deliveries.
May 2006: 2 A320-232's (2771, XA-VOA; 2780, XA-VOB), deliveries.
December 2006: Mexico's airline industry is facing a significant overcapacity situation following the emergence of several new entrants, Aeromexico (AMX) (CEO) Andres Conesa said at the (ALTA) Latin American Airline Leaders Forum. According to Conesa, Mexico currently has an average of 8 airlines competing on city-pairs of >1 million annual passengers compared to 4 in the USA. Furthermore, the top 10 busiest domestic routes have 1.8x- the number of seats required to meet demand versus 1.2x- in the USA.
Aeromexico (AMX) and its regional affiliate Aerolitoral are part of Consorcio Aeromexico, the renamed Cintra, following Cintra's sale of Mexicana (CMA) last year to Grupo Posadas. Mexican new entrants, all Low Cost Carrier (LCC)s, include Volaris (VLS) and InterJet (AAE) based at Toluca Airport outside Mexico City, Alma in Guadalajara, Avolar (AVL) in Tijuana and Viva Aerobus (VVS) in Monterrey. Additionally, Mexicana (CMA) subsidiary Click (AEB), the former Aerocaribe, operates as a (LCC). Conesa said he expects a shakeout, with only a few new entrants surviving. "It's hard to think they can all remain," he said.
A319-132 (2997, XA-VOC), delivery, originally intended for Lufthansa (DLH).
January 2007: A319-133 (2979, N501VL), delivery.
March 2007: 3 A319-132s (3045, XA-VOD; 3069, XA-VOE; 3077, XA-VOF), deliveries.
June 2007: Volaris (VLS) expects to add +8 A319s this year bringing its fleet to 17. It added 11 new routes in the 1st quarter of 2007.
A319-132 (3175, XA-VOG), delivery.
July 2007: Air Canada Technical Services (ACTS), the Maintenance Repair & Overhaul (MRO) provider, 30% owned by Air Canada (ACN) parent (ACE) Aviation Holdings, reached new 10-year agreements with both
(TACA) (TAC) and Mexico's Volaris (VLS) for (MRO) work on components and related logistics, in deals valued at a combined C$200 million/$190.5 million. (ACTS) President & (CEO) Chahram Bolouri said the company "anticipates strong revenue growth" in its engine and component businesses for 2007 and that its acquisition of El Salvador's Aeroman "strategically positioned us to attract the business of carriers across the Americas."
September 2007: A319-132 (3253, XA-VOH), delivery.
October 2007: (UATP) announced that Mexican Low Cost Carrier (LCC) Volaris (VLS) has become a (UATP) merchant.
A319-132 (3279, XA-VOJ), delivery.
November 2007: Volaris (VLS) now operates 14 A319 airplanes to 16 cities within Mexico.
March 2008: A319-133 (3450, XA-VOK), delivery.
April 2008: 2 A319-133s (3463, N502VL; 3491, N503VL), (ILF) leased.
September 2008: Volaris (VLS) operates >120 flights a day to 21 cities throughout Mexico.
October 2008: Mexican low cost carriers Volaris (VLS) and Interjet (AAE) are planning aggressive expansion as they try to take advantage of opportunities created by consolidation in Mexico's dynamic domestic market. Aerocalifornia (AEX), which was Mexico's 4th largest carrier, ceased operations in July 2008. Interjet (AAE) quickly bought all 50 slots of (AEX) at the Mexico City International Airport. (VLS) has similarly been adding capacity at Aerocalifornia (AEX)'s base in La Paz. (VLS) is the largest carrier at its home base of Toluca, and (CEO) Enrique Beltranena said (VLS) will continue to focus exclusively on Toluca, even if slots at Mexico City airport do become available. He cites the costs there are too high and turnaround times are too long to support low-cost operations.
SEE ATTACHED ARTICLE - - "VLS-NEWS-OCT08."
(VLS) received the 1st of 14 (IAE) (V2500)-powered A320s on order from Airbus (EDS). (VLS) currently operates 18 A319s. (VLS) plans to add 7 A319s next year instead of the previous plan to add only 1. 1 more A319 and 2 A320s will be delivered this year.
November 2008: In September, Volaris (VLS) carried the 3rd highest number of passengers of all Mexican carriers with 259,150 (+47%).
Having already sealed a code share deal with WestJet (WJI) giving it access to Canada, Southwest Airlines (SWA) announced a partnership with (VLS) that will give (SWA) a foothold in Mexico for the 1st time. (SWA) (CEO) Gary Kelly said in July that he was looking to expand on (SWA)'s deal with WestJet (WJI) and offer passengers access to Mexico and the Caribbean. (SWA) said it and Volaris (VLS) will offer "a seamless travel experience to a wide array of destinations," with code share flight schedules and "additional features" scheduled to be announced by early 2010. By next spring, (SWA)'s website will become a distribution channel for Volaris (VLS) tickets. Loyalty programs, ground handling and cargo are areas of potential cooperation, it said. "We are continuing to look for ways to expand our network through international code share partnerships, and we are excited to team up with (VLS) to offer our customers access to attractive Mexican destinations," Kelly said.
Launched in early 2006, (VLS) flies 19 A319s and 2 A320s on 39 routes to 23 Mexican destinations. It has 13 more A320s on order. (CEO) Enrique Beltranena called (SWA) the "best possible partner." (SWA) serves 64 airports. (SWA) Senior Director Planning & Distribution Richard Sweet wrote on (SWA)'s website that (VLS) plans on flying to the USA next year, and that despite being an "unknown brand in the USA" and a "relatively small and certainly new" airline, it has "proven [to be] a successful and viable airline and [is] developing a new generation of flyers in Mexico."
(VLS) (CEO) Enrique Beltranena said (VLS) expects to launch its 1st USA service in the 2009 4th quarter and plans to be operating to 10 TO 12 markets north of the border in the next 3 to 5 years, which would represent a penetration comparable to that of Aeromexico (AMX) and Mexicana (CMA). He would not reveal destinations, but said the USA service will align with that of new code share partner Southwest Airlines (SWA). "It is going to be paired to the most dense airports that (SWA) is utilizing, and obviously the ones with wide connectivity for both the USA and Mexicans in the region," he said at the (ALTA) Airline Leaders Forum in Cancun. "They do have >87 city-pairs in the USA and we'll be joining them where it makes more sense."
(VLS) and (SWA) said they plan to reveal further details of the agreement in 2010. Beltranena said he did not know if (SWA) was planning its own cross-border flights, but confirmed that (VLS) would have exclusivity on its routes. He said about 78% of its USA - Mexico traffic would be point-to-point, with the remainder connecting.
He promised that (VLS) would work to establish its brand in the USA prior to the launch of its USA routes and the code share deal, saying it is "something we need to do" and that the partnership with (SWA) "would be a total failure" otherwise. The (SWA) Pilots' Association last week expressed concern that the carrier "is risking brand dilution by association with an unknown carrier."
Beltranena bristled at the notion, saying "It's important to understand that we do have a higher relative market share in Mexico than what (SWA) has in the USA. In terms of relative market share, our participation [in the code share] is very important. It's something they have to take into consideration" as (SWA) also will benefit from (VLS) traffic into the USA. "Our pilots (FC) could be saying exactly the same thing," he said.
(VLS) announced that it will upgrade the engines on forthcoming airplanes to (IAE)'s "SelectOne" build standard. The upgrade will encompass 14 airplanes, part of an order for 16 firm and 40 options on A319s.
May 2009: WestJet (WJI) announced that its code share partnership with Southwest Airlines (SWA), slated to launch by late 2009, "will be delayed" because (SWA) "has decided to redirect a portion of its resources dedicated to the code share project towards other near-term revenue opportunities." (WJI) emphasized that its new Sabre reservation system will be on line by the 4th quarter and could handle implementation of the code share, but said (SWA) is concerned about launching the arrangement in a weak revenue environment. A (WJI) statement quoted (SWA) Executive VP Strategy & Planning Bob Jordan as saying, "In response to the current economic environment, (SWA) is focusing its immediate attention on several critical objectives, including increasing our revenues." He added that (SWA) is "absolutely committed to our partnership with (WJI) and to code sharing in general."
Neither carrier said how long the delay might be. (SWA) also has signed a code share deal with Toluca-based Volaris (VLS) that was expected to kick in sometime next year; it is not clear whether that arrangement has been affected. "(WJI) understands the decision made by (SWI)," (WJI) Executive VP Commercial Distribution Hugh Dunleavy said. "Our continued USA expansion is a key strategy for our airline, but code sharing is only one element of this. Both airlines remain committed to minimizing delays and are focused on generating revenue as quickly as possible."
July 2009: Launches 1st international scheduled route linking Toluca and Guadalajara with Los Angeles.
October 2009: Avianca (AVI) has confirmed it is merging with Grupo (TACA) (TAC). In a letter to employees, (AVI) (CEO) Fabio Villegas said (AVI)'s board after months of study has decided to pursue a "strategic merger" with Grupo (TACA) (TAC). But Villegas stressed that each company intends to maintain its own identity and will continue to operate independently. He said "the project offers big opportunities given the multitude of synergies" the two carriers will be able to pursue. Their combined network will also provide (AVI) and (TAC) customers with improved connections throughout the Americas and the world. The 2 carriers already code share on some routes.
"I am sure with the commitment of all employees we will create with (TAC) the most important airline leader in Latin America," Villegas said. He called the deal with (TAC) "of great significance for our company and the Latin American aviation industry in general". Villegas said combined, the carriers have an "optimistic future" which is sure to be "recognized nationally and internationally".
(LAN) Airlines is now the biggest airline group in Latin America, with passenger airlines in Chile, Argentina, Ecuador, and Peru, plus cargo airlines in Brazil, Colombia, Mexico, and the USA. Publicly-traded (LAN) also has been looking at establishing new passenger airlines in Colombia and Brazil, perhaps through a merger or acquisition.
Grupo Taca (TAC) includes airlines in nearly every Central American country as well as in Peru. (TAC), which is privately owned, also has a stake in Mexican low-cost carrier Volaris (VLS).
(AVI) is predominately owned by Brazil's Synergy Group, which also owns Brazilian carrier OceanAir (ONE) and Ecuadorean regional carrier, VIP. It is unclear if the (AVI)-(TAC) tie-up will include these smaller carriers but (AVI) already last year took over the management of OceanAir (ONE). (AVI) last year also acquired Colombian cargo carrier Tampa (TMP).
Once the transaction is complete, (TAC) (CEO) & Chairman Roberto Kriete will serve as Chairman of the new group’s board of directors and (AVI) (CEO) Fabio Villegas plans to serve as (CEO). Other members of the new company’s senior management team include current (TAC) (COO) Estuardo Ortiz who will assume the same role upon the company’s formation, and (AVI) (CFO) Gerardo Grajales, who also assumes the same role once the merger is complete.
(AVI) is roughly double the size of (TAC) on a revenue basis with the former generating about $2 billion in annual revenues and the latter about $1 billion. (LAN) as a group last year generated $4.5 billion in revenues.
Roberto Kriete is also a co-founder and board member of Volaris (VLS). The Krietes acquired 25% of Volaris (VLS) before its 2006 launch and provided expertise during its launch phase. Several (VLS) executives are ex-(TACA) (TAC), including its (CEO) Enrique Beltranena, who was formerly (TAC)'s Chief Operating Officer (COO). While the 2 carriers ((VLS) & (TAC)) earlier considered forging a code share and operational tie-up, this never materialized and for now, Volaris (VLS) is focusing on its new partnership with Southwest Airlines (SWA). Kriete says there is no consideration to bring (VLS) into the new Avianca (AVI) - (TACA) (TAC). Volaris (VLS) operates 26 A320 family airplanes (the same type that form the backbone of (AVI) - (TAC)'s fleet). (VLS) does not yet fly to Central or South America and is planning to grow its USA network in 2011.
The Grupo Kriete Investment Company also owns stakes in real estate, agribusiness and hospitality companies.
(VLS) has applied for rights to fly from both Morelia and Zacatecas to Los Angeles starting late next month. It's the 1st time (VLS) is applying for USA routes that don't originate in either Toluca, its home base near Mexico City, or Guadalajara, the country's 3rd largest city.
(VLS) intends to lease 2 new A319s next summer, (CEO) Enrique Beltranena said, according to "Dow Jones." He also said (VLS) has been operating in the black for the past 17 months.
December 2009: Honeywell (SGC) said Volaris (VLS) will use its (LED) technology to upgrade A320 navigation wingtip lighting on 20 airplanes.
July 2010: 2 of the chief investors in Volaris (VLS) have sold their stakes in (VLS) under an agreement that enables 2 other backers to consolidate their own holdings. Under the agreement, Mexican media conglomerates Inbursa and Televisa have sold their stakes, which totaled 50% of the company, with Televisa confirming that it traded its 25% for $80.6 million. The agreement, which stemmed from a failed takeover of (VLS) by rival Interjet (AAE), resulted in founders Discovery Americas and Avianca (AVI)-TACA (TAC) Chairman Roberto Kriete adding to their control, while inviting several other Mexican investors and USA fund Indigo Partners (INZ) into the group. Indigo (INZ), which is headed by industry veteran Bill Franke, has invested in many airlines and was involved last year’s talks between Oaktree Capital and the Jamaican government to purchase Air Jamaica (JAM). Kriete’s sister, who was born in Mexico, also became a shareholder and kept the company within foreign ownership limits. Her brother Roberto is El Salvadorian. “With partners including leading Mexican entrepreneurs, experienced and seasoned global aviation players, Southwest Airlines (SWA) (through a commercial alliance), and a world-class management team, (VLS) is well positioned to further consolidate its financial, operational and competitive leadership in the Mexican airline industry,” (VLS) said.
Evercore Partners and Caoba Capital advised (VLS), while Vinson & Elkins and Creel Garcia-Cuellar Aiza y Enriquez provided legal services.
September 2010: Volaris (VLS) is planning a major expansion of its network from Mexico City International Airport as it looks to fill some of the void left by Grupo Mexicana. According to (VLS)' website, the carrier is launching 7 new routes from Mexico City this month. Service from Mexico City to Hermosillo will launch tomorrow. Service to Cancun, Chihuahua, Guadalajara, La Paz and Los Cabos will launch on September 22, followed by service to Merida on September 23.
According to (VLS)' web booking engine, Mexico City to Cancun will be served 2x-daily with A319s. The other 6 new Mexico City routes will initially be served 1 per day with A319s.
(VLS) currently only serves Mexico City from Tijuana and Mexicali with 1 daily flight on each route. (VLS) is based at Mexico City alternative airport Toluca and also has a large base at Tijuana.
(VLS) said last month that it is seeking more slots at Mexico City but Toluca, Tijuana and Guadalajara would remain its main focus.
According to "Innovata," all the Mexico City routes being added by (VLS) this month were previously operated by Grupo Mexicana, except Hermosillo. All 7 routes are currently operated by Grupo Aeromexico. Interjet (AAE) also currently operates all of the routes except Mexico City to La Paz.
(VLS) will also have to compete against VivaAerobus (VVS) on the Mexico City to Guadalajara and Cancun routes. (VLS) currently operates a fleet of 21 A319s and 2 A320s.
October 2010: Southwest Airlines (SWA) said that its "international connect" service in partnership with Volaris (VLS) will launch December 1 with bookings opening on November 12.
The (SWA)/)VLS) partnership, which was agreed to nearly 2 years ago, will enable passengers to book connections from 20 (SWA) destinations through Los Angeles, Oakland, and San Jose, to Cancun, Guadalajara, Morelia, Toluca/Mexico City and Zacatecas. The service will require customers to have a booking on both (SWA) and (VLS), which can be done via the (SWA) website. Luggage will be transferred to final destinations. (SWA) said the partnership sits somewhere "between an interline and a code share" agreement, adding, "It takes some of the best features of those and simplifies it. As (VLS) grows, additional (SWA) cities will open international destinations."
(VLS), which launched in 2006, expects to carry 4 million passengers this year and with the shutdown of Mexicana (CMA), has become the country's 2nd largest airline, according to airline officials.
December 2010: Mexico's aviation safety rating was raised to Category 1 by the USA (FAA) just 4 months after the agency downgraded the country to Category 2 for being "unable to fully comply with all of the international safety standards" set by (ICAO).
The (FAA) said a November review of Mexico's civil aviation authority led it to conclude that the nation now complies with (ICAO) standards. "Mexico has made significant progress," the agency stated, adding that the (FAA) "will continue to provide technical assistance to support and maintain the changes the civil aviation authority has made."
The (FAA) never explicitly explained where Mexico had fallen short, saying broadly that a Category 2 rating means a country "is deficient in 1 or more areas, such as technical expertise, trained personnel, record keeping or inspection procedures."
The change is meaningful for Mexican airlines, which were barred from adding service to the USA or code sharing with USA carriers while the country was rated Category 2.
Volaris (VLS) is now to inaugurate a daily service from Aeropuerto Internacional de Guadalajara to Chicago Midway International Airport on December 13, a service that links (VLS) directly with new partner Southwest Airlines (SWA), which dominates operations at Chicago Midway. This also is the 1st formal route announcement since the (FAA) returned Mexico’s safety rating to Category 1.
(VLS) is planning to further expand its Mexico City operation as it takes delivery of 6 additional A319s over the next few months.
(VLS) Chief Commercial Officer, Holger Blankenstein said (VLS) is taking an additional A319 this month and 2 more A319s next month, giving it a fleet of 24 A319s and 2 A320s. Blankenstein says (VLS) also has committed to lease 3 additional A319s for delivery in the 1st part of 2011. He said at the recent (ALTA) 2010 Airline Leadership Forum these airplanes will all be delivered "early in the year but we haven't fixed a date yet".
All 6 aircraft are used A319s that are being acquired to supplement the airplanes (VLS) already has on order with Airbus (EDS). Blankenstein said the 3 A319s being placed into service in the current quarter were all previously operated in Europe.
(VLS) as part of its outstanding order book with Airbus (EDS) has 4 new A319 delivery slots next year. Blankenstein says 3 of these airplanes are now slated to be delivered in June and July, and (VLS) hopes to take the 4th in November, giving it a fleet of 33 airplanes by the end of 2011.
(VLS) was originally planning to end 2011 with 27 airplanes but decided to lease an additional 6 airplanes to meet growing demand in the domestic market in the aftermath of Mexicana (CMA) suspending operations. Mexicana (CMA) suspended operations in late August, prompting (VLS) and other Mexican carriers to add capacity in the domestic markets, resulting in a significant improvement in load factors across the Mexican industry. In September, the 1st full month after Mexicana (CMA)'s collapse, (VLS)'s domestic passenger traffic was up +29% versus the year prior to 313,000 passengers.
Volaris (VLS) in recent months has bolstered frequencies on some of its domestic routes and launched 7 new routes from Mexico City International.
(VLS) began serving Mexico International early last year after a change in government policy opened up the slot-controlled airport to new entrants. It was initially limited to operating 1 daily flight at Mexico City from its Tijuana base. But after Mexicana (CMA) suspended operations in late August, (VLS) was given several additional slots at Mexico City. Blankenstein says (VLS) is now operating the equivalent of 11.5 flights per day from Mexico City to 9 domestic destinations. He said (VLS) expects to secure enough additional slots to operate about 20x-daily from Mexico City during the upcoming peak winter season. The additional slots will allow (VLS) to add a 2nd frequency on several of its Mexico City routes.
The government-owned company which operates Mexico City International Airport (AICM), has still not permanently reallocated any of slots held by Grupo Mexicana or Aviacsa, which ceased operations last year. But small groups of slots are gradually being made available to other carriers. "We're pretty comfortable we'll get what we want for the high season," Blankenstein says. He adds after the winter peak season (VLS) may reduce its Mexico City operation rather than expand it beyond the expected 20x-daily. "We don't have a major strategy to go into (AICM)," Blankenstein said.
He explained Mexico City alternative airport Toluca and Tijuana will continue to serve as "cores" for the airline. Blankenstein said Toluca is now offering new incentive packages in an attempt to retain airlines. He said the incentives include reimbursing to passengers the 204 pesos/$16 each passenger pays in airport fees. Toluca also covers the cost of (VLS)'s shuttle bus from downtown Mexico City to the airport.
(VLS) now has an 18% share of the domestic market, based on passengers carried in September 2010, compared to a 13% share 1 year ago. Aeromexico (AMX) has a 47% share followed by Interjet (AAE) with a 21% share. But Blankenstein pointed out that (VLS) is significantly larger than Interjet (AAE) on a (RPK) traffic basis since (VLS)'s average stage length is about double compared to Interjet (AAE).
Recent data shows nearly all the domestic traffic previously carried by Grupo Mexicana, which 1 year ago had a 30% share of the market, has already been picked up by Aeromexico (AMX), Volaris (VLS), Interjet (AAE) and low-cost carrier VivaAerobus (VVS). "There was a massive amount of overcapacity. Now the business is more sustainable," Blankenstein said.
(VLS) executives said (VLS) may also further accelerate fleet expansion, depending on what happens with Mexicana (CMA)'s proposed re-launch. Mexicana (CMA) is hoping to resume operations next month, focusing on USA routes.
January 2011: Volaris (VLS), a social media enthusiast, said it now has 100,000 Facebook fans and 34,000 Twitter followers. The significance of popular social media sites to airlines is debatable, with some seeing a revolution and others more tempered in their assessment. Sites like Facebook and Twitter, if nothing else, do offer carriers a medium with which to communicate and merchandise to loyal customers.
Southwest Airlines (SWA) partner (VLS) will add Las Vegas as its 5th
USA destination on March 30, when it begins daily service to and from Guadalajara, Mexico’s 2nd-largest city; however, (VLS) will face new competition on one of its existing USA routes. (VLS) already flies from Guadalajara to San Francisco, San Jose, Los Angeles International Airport and, as of December 13, Chicago’s Midway Airport. It also offers Los Angeles service from Zacatecas, Morelia and its Toluca home base, near Mexico City. Both the Chicago Midway and Las Vegas open up new opportunities for (VLS)’s partnership and connecting service with (SWA), which has a big presence at both airports. For the moment, (SWA) and (VLS) still are connecting only via the 3 California cities served by (VLS). But a spokeswoman for (VLS) said the carriers will begin connecting service from Chicago and Las Vegas “during the coming months.” No other carrier currently offers Las Vegas to Guadalajara service, but (VLS) soon could face some new competition on a Los Angeles to Guadalajara route already served not only three times a day by (VLS), but also 2x-daily by Aeromexico (AMX) and daily by Delta Air Lines (DAL) and Alaska Airlines (ASA).
United (UAL) Continental (CAL) Holding announced January 12 that (CAL) plans to begin service on the route May 3, pending Mexican
government approval, using 737-800 airplanes configured for 16F first-class and 144Y economy seats. (CAL) already offers Houston to Guadalajara service and serves 30 destinations in Mexico.
February 2011: Volaris (VLS) has unambiguous USA ambitions. (VLS) applied for >20 routes involving cities all over Mexico, including Mexico City and Cancun. It wants to fly, for example, Mexico City to Dallas (DFW), Cancun to New York, Cancun to Los Angeles, and Puerto Vallarta to Los Angeles, to name a few. This goes way beyond its goal of merely hooking up with partner Southwest Airlines (SWA) in (SWA)’s big bases like Oakland and Chicago Midway. The 1st new route it wants to fly is Guadalajara to Fresno, a busy 1 for migrant workers, followed by Mexico City to Oakland, Zacatecas to Chicago, Guadalajara to San Francisco, Guadalajara to Sacramento, and Aguascalientes to Los Angeles. Beyond that, (VLS) will add routes as “warranted by commercial conditions.” All of this, of course, followed the collapse of Mexicana (CMA).
Volaris (VLS) appointed former AeroMexico (AMX) Chief Executive Gilberto Perezalonso Cifuentes as Chairman, replacing Dr Pedro Aspe Armella.
March 2011: Volaris (VLS) will increase 4x-weekly, Guadalajara to Fresno service to daily on April 14.
October 2011: Volaris (VLS) is a Mexican Low Cost Carrier (LLC), operating to >30 domestic routes between >20 cities from its operating base at Toluca (TLC), including Aguascalientes (AGL); Cancun (CUN); Ciudad Juarez (CJS); Culiacan (CUL); Guadalajara (GDL); Hermosillo (HMO); Leon Bajio (BJX); Los Cabos (SJD); Merida (MID); Mexicali (MXL); Monterrey (MTY); Morelia (MLM); Puebla (PBC); Puerta Vallarta (PVR); Tijuana (TIJ); & Villahermosa (VSA). Also operates scheduled services to Fresno and Los Angeles. Domestic and international charter flights are also offered.
(IATA) Code: Y4. (ICAO) Code: VOI.
Parent organization/shareholders: Carlos Slim (25%); Emilio Azcarraga (25%); Pedro Aspe (25%); & Roberto Kriete (TAC) (25%).
(Telephone: +52 551 102 0400). (FAX: +52 55 52 11 96 13).
In the USA (Telephone: +1 866 988 3527), 24 hours x7 days/week.
Main Base: Toluca Lic Adolfo Lopez Mateos International Airport (TLC).
November 2011: Volaris (VLS) has signed a memorandum of understanding (MOU) with Airbus (EDS) for 44 A320 airplanes, comprising 30 A320neos and 14 A320 family airplanes.
(VLS) is the 1st Mexican airline to order the A320neos, which will be used to continue (VLS)’ expansion into the USA and renew its fleet.
(VLS), which launched in 2006, operates 33 Airbus (EDS) aircraft and has a backlog of 15 more.
January 2012: Volaris (VLS) has finalized a previously announced order for 44 A320 airplanes, comprising 30 A320neos and 14 A320 family airplanes.
According to Airbus (EDS), the order represents the largest single commercial airplane order by a Mexican airline. (VLS), the 1st airline in Mexico to order the A320neo, has yet to make an engine selection. It will use the airplanes to continue its expansion into the USA and renew its fleet.
(VLS), which launched operations in 2006, has become 1 of the top 3 airlines in Mexico. It operates 34 Airbus (EDS) aircraft and has a backlog of 58.
Volaris (CEO) Enrique Beltranena said the new aircraft will “let us strengthen our low price strategy to benefit a larger number of Mexicans, while their fuel efficiency and reliability will allow our fleet, the youngest in the country, to be even more friendly to the Mexican skies.”
April 2012: Volaris (VLS) announced a buildup in Guadalajara, including new flights to Monterrey, Chihuahua, Los Mochis and Puebla. It’s also starting Tijuana to Colima service next month. Mexico City is the busiest airport for (VLS), measured by flights and seats, although Tijuana (because of its longer distance from most
other (VLS) destinations) is busiest measured by available seat kilometers. Guadalajara ranks 3rd by both counts. (VLS)’ close rival Interjet (AAE), meanwhile, counts Monterrey as its 2nd busiest market (by all 3 measures) behind Mexico City.
May 2012: Volaris (VLS) launched a 3rd route from Puebla to Guadalajara.
August 2012: Volaris (VLS) launched its 6th route to Los Angeles, (LAX) on 4 August. (VLS) now flies 1x-weekly across the border to (LAX) from Culiacán (CUL) in NW Mexico with its 174-seat A320 airplanes. (VLS) already serves Los Angeles from Guadalajara, Mexico City, Morelia, Zacatecas and Aguascalientes. This is (VLS)’s 1st international service from Culiacán, which the airline since previously serves from Tijuana, Mexico City and Guadalajara.
(VLS) will launch weekly, Uruapan to Los Angeles service on October 2.
As Southwest Airlines (SWA) marketing partner, (VLS) already flies from 6 Mexican cities to Los Angeles, 4 to Chicago Midway (MDW), 2 to Oakland, 2 to Las Vegas, and 1 each to San Diego, Fresno, San Jose and Orlando, with the following routes to come: Aguascalientes to Chicago (MDW), Monterrey to Las Vegas, Morelia to Oakland, Toluca to Chicago (MDW), and Zacatecas to Oakland. It also recently announced new service to Denver and Sacramento.
(VLS) will launch 2x-weekly, Guadalajara to Sacramento service on November 15, 2x-weekly, Tepic to Tijuana (TIJ) service on October 15, 2x-weekly, Queretaro (QRO) to Cancun service on October 18, and 2x-weekly, (TIJ) to (QRO) service on October 18.
Mexican Airlines saw a +11.2% increase in domestic boardings in the 1st half of 2012, to 13.2 million passengers. The 5 Mexican carriers that operate international services saw traffic increase +31.4% to 2.6 million passengers.
According to the Dirección General de Aeronáutica Civil, Grupo Aeromexico (Aeromexico (AMX) and Aeromexico Connect) led domestic boardings with a 39% market share and 5.2 million boardings, followed by Interjet (AAE) with a 22% market share and 3.2 million boardings passengers.
Volaris (VLS) was next with 2.6 million boarding passengers, up +22.7%, followed by VivaAerobus (VVS) with 1.5 million, Magnicharters (MAM) with 402,332 boarding passengers, and Aeromar (TRO) with 267,031 passengers.
On the international market, Grupo Aeromexico boarded 1.8 million passengers, Interjet (AAE) 291,357; VivaAerobus (VVS) 60,424; and Aeromar (TRO) boarded just 119 international passengers.
September 2012: Volaris (VLS) will launch cargo services on its international network later this year, starting with flights to/from Los Angeles, California.
(VLS), which currently provides belly cargo service only, is the 2nd largest domestic cargo carrier in Mexico. In the 1st half, (VLS) had a 29.6% market share and carried 7,500 tonnes, up +11% year-over-year. By the end of the year, (VLS) expects its cargo side to grow +12% and profits to increase +30% over the last year.
Condor Airlines (CDF) owned by Thomas Cook, signed a marketing pact with Volaris (VLS).
October 2012: Volaris (VLS) launched a new domestic Mexican route on October 15 and now connects Tijuana (TIJ) in Baja California with Tepic (TPQ), which is also located on the Pacific coast, but in the central part of Mexico. 2x-weekly services on the 1,700 km route are now offered using 144Y-seat A319s. Enrique Beltranena (CEO) (VLS) explained: “With this new route, (VLS) opens a whole new chapter for passengers willing to travel between the two cities, no matter the reason.” Previously, connectivity options were lacking at both ends.
(VLS) inaugurated its operations in Querétaro (QRO) in the North-central Mexican region of Bajío with 2 routes on October 18. Flights to both the popular Caribbean holiday resort of Cancún (CUN) and Tijuana (TIJ) by Mexico’s border to California, are now offered with each 2x-weekly frequencies. On the following day, (VLS) also launched 2x-weekly flights on the 600 km domestic route from Hermosillo (HMO) to Culiacán (CUL), both in the NW of the country, on which it competes against AeroMexico (AMX)’s 2x-daily flights. All services are operated using (VLS)’s fleet of 174Y-seat A320s.
(VLS) added 2 new routes to its quickly expanding network from Mexico to the USA. On October 2, weekly services from Uruapan (UPN) in central-western Mexico to Los Angeles (LAX) were launched, becoming (VLS)’s 7th route to the Californian city. On the following day, flights on the 2,700 km route from Guanajuato (BJX) to Chicago Midway (MDW) commenced with also weekly frequencies. (VLS) already serves Midway from 4 other destinations across Mexico. Both new routes are operated with A319s and are free of direct competition.
November 2012: Volaris (VLS) began operating flights on the route from Guadalajara (GDL) in the western-pacific region of Mexico, to Sacramento (SMF), California, USA on November 8. 2x-weekly, A319-operated services will be offered on the route, which is (VLS)’s seventh to a USA destination from Guadalajara. Aeromexico (AMX) provides competition, operating the route to the capital of the state of California with 5x-weekly frequencies.
In the USA, (VLS) also flies to Chicago Midway, Denver, Las Vegas, and Orlando.
December 2012: Volaris (VIS) became the 3rd carrier on the route from Mexico City (MEX) to Denver, Colorado (DEN), as it inaugurated 2x-weekly services on December 8. Paul Washington, Denver’s Director Economic Development, commented during the launch: “From a trade standpoint, our country’s fortunes grow as Mexico’s fortunes grow: since the North American Free Trade Agreement was implemented in 1994, trade with Mexico has increased threefold and 40% of all imports from Mexico are categorized as value-added.” Flights on the 2,300 km route are operated with (VLE)’s A320s in competition with AeroMexico (AMX)’s 3x-weekly and United (UAL)’s weekly frequencies.
January 2013: Whether Mexicana DE Aviacion (CMA) finally emerges from bankruptcy protection and resumes operations is the story to watch in Mexico this year. Newly inaugurated Mexican President Enrique Pena Nieto vowed on the campaign trail to resurrect Mexicana (CMA), but it remains unclear if he will make good on that promise. A bankruptcy court dismissed an investment group that had pledged to recapitalize (CMA), and although several investors have expressed interest, the court has yet to approve a new restructuring plan. Since Mexicana (CMA)'s grounding, Interjet (AAE) has emerged as the country's largest domestic carrier and, along with Volaris (VLS) and Aeromexico (AMX), it has filled the gap left by Mexicana (CMA).
Volaris (VLS) has started a new domestic route between Mexico City and Merida on the Yucatan peninsula.
February 2013: Volaris (VLS) continues the expansion of its domestic network with the launch of services on the 1,000 km route from Mexico City (MEX) to Mérida (MID) in the Yucatán Peninsula. Daily flights now connect the Mexican capital and the (ASUR)-operated airport, facing competition from AeroMéxico (AMX)’s 48 and Interjet (IJT)’s 38 weekly frequencies. Enrique Beltranena, Volaris (VLS)’s (CEO) said: “In 2013, we want to strengthen our presence in the SE of the country, helping our passengers to reduce travel times in tune with their wishes.” (VLS) already announced the launch of services from Mexico City to Tuxtla Gutiérrez in Chiapas later this month.
(GE) Capital Aviation Services Limited (GECAS) (GEF) announced it has signed a purchase-and-leaseback transaction with (VLS) for 7 new A320s. The A320s come from (VLS)’s existing order book with Airbus (EDS) and will be delivered in 2013 and 2014.
(VLS), Mexico’s 2nd-largest carrier and largest low-cost carrier (LCC), flies to >38 destinations in Mexico and the USA. It currently operates a fleet of 41 Airbus (EDS) airplanes.
April 2013: Volaris (VLS) has taken delivery of its 1st of 44 A320s with sharklets.
SEE ATTACHED PHOTO - "VLS-2012-04 - 1ST SHARKLETS."
(VLS), the 1st carrier in Mexico to order the A320neo, last year finalized a purchase agreement for 44 airplanes, comprising 30 A320neos and 14 A320ceos.
(VLS), which has an all-Airbus (EDS) fleet, currently operates 43 A320 family airplanes and has a backlog of 48.
June 2013: Volaris Aviation Holding, parent of Mexican Low-cost carrier (LCC) Volaris (VLS), has filed with the USA Securities & Exchange Commission to raise up to $100 million in an initial public offering (IPO) of American Depository Shares offering.
It is not known what the expected prices of the shares will be or how many will be sold. Observers believe the (IPO) also signals (VLS)’ intention to expand into other Latin American regions beyond Mexico, as Argentina, Brazil and Colombia have become top outbound leisure markets into Mexico.
Volaris (VLS) operates a current fleet of 43 A320 family airplanes and flies into 30 domestic Mexico destinations and 10 in the USA. In April, (VLS) took delivery of its 1st of 44 A320s with sharklets. Last year, it became the 1st carrier in Mexico to order the A320neo, finalizing a purchase agreement for 44 airplanes, comprising 30 A320neos and 14 A320ceos.
July 2013: Volaris (VLS) commenced operations on the 2,100 km route from Cancun (CUN) to Chihuahua (CUU) on July 1. 2x-weekly services are operated between the 2 Mexican cities using A320s. (VLS) already flies to Chihuahua from Mexico City (11x-weekly flights) and Guadalajara (3x-). (VLS) commenced operations on 3 new routes, adding 2 destinations to its offering from Cancun (CUN) and 1 from Tijuana (TIJ). All 3 routes are offered with low frequencies and operated using (VLS)’ fleet of A320s.
On July 4th, Cancun (CUN) to Ciudad Juarez (CJS), 2x-weekly; on July 6th, (CUN) to Morelia (MLM), 1x-weekly; and July 5th, Tijuana (TIJ) to Manzanillo (ZLO), 2x-weekly, using A320s.
September 2013: Volaris (VLS), the Mexican low cost carrier (LCC), has added +3 more destinations to its expanding base in Guadalajara (GDL). Last week saw the introduction of 2x-weekly flights to Mazatlan (MZT), Merida (MID), and Tuxtla Gutierrez (TGZ) using its A319s. All 3 of these routes are already served by other carriers; Aeromexico (AMX) flies daily on the Mazatlan route, while low-cost rival VivaAerobus (VVS) operates 3x-weekly on the other 2 routes. Volaris (VLS) now operates to 24 destinations from Guadalajara, including 7 in the USA; 5 in California, plus Chicago and Las Vegas.
Volaris Aviation Holding, parent of Mexican low-cost carrier (LCC) (VLS), has launched a simultaneous $346 million initial public offering (IPO) on September 18 at the New York Stock Exchange and the Mexican Stock Exchange. The (IPO) placed 61.1 million Series A shares on the domestic market and 226.4 million Ordinary Participation Certificates (CPOs) in the form of American Depositary Shares (ADS) for the international market. It is the 1st time a carrier from Mexico has launched an (IPO) at both stock exchanges.
Funds expected to come in from the (IPO) will be used to anticipate payment of financial debts and for general corporate purposes, including pre-delivery payment of airplane orders. (VLS)’s partners in this initiative are Deutsche Bank Securities, Morgan Stanley, Santander Investment Securities, Evercore Casa de Bolsa, Barclays Capital and Cowen y Compañia.
(VLS), which started operations in March 2006 serving 5 domestic routes, flies to 30 domestic destinations and 10 in the USA with a fleet of 43 A320 family airplanes.
October 2013: Volaris (VLS) continues to add new routes to the USA. Its latest venture is to link Guadalajara (GDL) with Phoenix, Arizona (PHX) with 3x-weekly (Mondays, Wednesdays and Saturdays) A320 flights. The 1,670 km route is already served by US Airways (AMW)/(USA) with 3x-daily flights. Phoenix becomes the 8th USA destination to be served by (VLS) from Guadalajara, and the 1st in Arizona. Of the other 7, 5 are in California, 1 in Nevada (Las Vegas) and 1 in Illinois (Chicago Midway). On arrival in Phoenix on October 19, Enrique Beltranena (CEO) of (VLS), said, “For nearly 1.7 million residents of Mexican origin living in Phoenix and for all of Arizona, this is a great day as we offer an outstanding way to travel at the best fares. We are helping to bring together families and friends on both sides of the border.” Also during the last week, respectively on October 15 & 18, (VLS) started 2 more domestic routes from Tijuana (TIJ) to Chihuahua (CUU) and Ciudad Juarez (CJS). Both of these routes will be flown 2x-weekly with A319s, with Aeromexico (AMX) providing competition on the Ciudad Juarez route.
Volaris (VLS) will start Mexico City to Chicago (ORD) on December 17.
November 2013: Volaris (VLS) has added San Luis Potosi (SLP) to its domestic network in Mexico. On November 3rd (VLS) started weekly (Sunday) flights from Tijuana (TIJ), using its A319s. (VLS) faces no competition on the 1,950 km route. This winter, (VLS) will serve a total of 28 destinations from the city that is close to the USA border. However, none of these routes are to destinations in the USA. (VLS)’s only international route from Tijuana (to Oakland), operated for less than a year in 2009 to 2010.
(VLS) commenced operations on its 1st route to Ciudad Obregon (CEN) in the state of Sonore, as it launched flights from Tijuana (TIJ) on November 5th. The 900 km service is offered 3x-weekly and operated using A320s.
Where are all the Latin American low cost carriers (LCC)s? Aside from Brazil, Mexico, and Colombia, there are no (LCC)s in Latin America, and this is a region with an emerging middle class, rising trade and commerce, and a growing appetite for travel. Beyond these 3 countries, the traffic data shows that legacy airlines are capturing nearly all of this growth.
At latest count, Latin America only has 6. They are the pioneer in the region (Gol) (GOT) and its fellow Brazilian carrier, Azul (AZL); Mexican carriers Volaris (VLS), Interjet (AAE), and VivaAerobus (VVS), plus Medellin-based VivaColombia (VVC). A few others have come and gone (Aires (AIR) (to (LATAM), and Webjet (WEB) to (GOL); Sol (which briefly became AeroHonduras (HND), and folded) plus AeroContinente Chile (CCL). The only other (LCC)s serving Latin America fly down and back from the USA or Canada.
1 reason is aeropolitics. 2 of the 3 next largest Latin American markets that lack (LCC)s (Argentina and Venezuela (as well as smaller Bolivia)) are effectively closed to new entrants due to policies that favor their government-owned carriers. Those state carriers could launch (LCC)s of their own, but they have little incentive to do it.
The 2nd answer relates to the so-called “unbalanced competition.” The next largest Latin markets that lack home-based (LCC)s after Argentina and Venezuela, are Peru, Chile, and Ecuador. (LATAM) and/or Avianca (AVI) dominate all 3 of these markets.
Juan Emilio Posada, Founder of VivaColombia (VVC) and now its Chairman, is well aware of this. “There are opportunities in countries or groups of countries where no low-cost carriers (LCC)s are present,” he says, but “the smaller the market and the more concentrated the network carriers, the greater the challenge.”
Latin (LCC)s have been slower, for example, to launch cross-border flights. The grounding of Mexicana (CMA) spurred Mexico’s (LCC)s to fill its vacuum. Volaris (VLS) and VivaAerobus (VVS) have focused solely on domestic and USA markets, but Interjet (AAE) now flies to Cuba, Guatemala, Costa Rica, and Colombia, as well as the USA. VivaColombia (VVC) is starting its own cross-border expansion early. It has applied for permission to fly to Panama City, Mexico City, and Cancun, and hopes to launch these routes in 2014. “International expansion has always been part of our business plan,” said (VVC)’s Posada. He foresaw “more interconnected” routes within 4-hours of its hub. Cross-border networks are essential in much of Latin America because the domestic markets in many countries are simply too small.
Cross-border networks are one thing, but joint ventures (JV)s are another. Here, again, Latin (LCC)s trail. Latin legacy airlines such as (LAN) pioneered the concept of cross-border joint ventures (JV)s. Clearly, cross-border joint ventures (JV)s between Latin (LCC)s still have a long ways to go.
For now, the news is more about new (LCC)s. 3 independent start ups have announced plans to launch low-cost flights from their bases in San Salvador and Costa Rica. All hope to fly by early next year. Whether they will, remains to be seen, but it shows that they realize the potential for growth in Latin America’s low-cost sector.
(VLS) has signed an agreement to lease 4 new A320s from (BOC) Aviation (SIL). All 4 A320s are scheduled to be delivered by May 2014, said the Singapore-based lessor. (VLS) has 24 A320s and 21 A319s in service. (VLS) serves 33 domestic destinations and 12 USA cities.
December 2013: Volaris (VLS) launched a total of 5 new routes during this month including 3 new low-frequency domestic routes from Cancun (CUN), a 2x-weekly service from Tijuana (TIJ) to Tuxtla Gutierrez (TGZ), and a 3x-weekly service from Mexico City (MEX) to Phoenix (PHX). Commenting on the launch of the Cancun services (VLS) (CEO) Enrique Beltranena, said: “We are committed to offer our customers the best travelling options in one of the youngest airplane fleets of the Americas while delivering the outstanding service that distinguishes us. By having the best airfares, customers will no longer have to spend hours on a bus to get to Cancun”. The new route to Phoenix is (VLS)’s 2nd, having started service from Guadalajara in October of this year.
The routes are as follows:
Cancun (CUN) to Hermosillo (HMO) 2x-weekly; to San Luis Potosi (SLP) 2x-weekly; Mexico City to Phoenix (PHX) 3x-weekly, vs US Airways (AMW)/(USA); Tijuana (TIJ) to Tuxtla Gutierrez (TGZ) 2x-weekly; and Cancun (CUN) to Veracruz (VER) 2x-weekly, vs VivaAerobus (VVS) 7x-weekly.
(VLS) continues to expand its network with 1 new domestic route and 1 new international route. On December 12th, (VLS) began seasonal (until January 16th) 2x-weekly flights (Thursdays and Sundays) between Cancun (CUN) and Mexicali (MXL), a distance of 3,110 km. Mexicali is located adjacent to the USA border in the Mexican state of Baja California. The airport handled just >500,000 passengers in 2012. On December 14th, it also launched its 1st ever flights to San Antonio, Texas (SAT) from Guadalajara (GDL). The 1,110 km route will be served 2x-weekly (Tuesdays and Saturdays) and will compete directly with Interjet (AAE)’s recently launched 2x-weekly flights. San Antonio becomes (VLS)’ 12th destination in the USA and 10th to be served from Guadalajara, of which 6 are in California. Both routes are served by a mix of the airline’s A319s and A320s.
May 2014: Mexican ultra low-cost carrier (ULCC) Volaris (VLS) posted a 1st-quarter net loss of -MXP370 million/-$28.3 million, widened from a -MXP65 million net loss in the year-ago period.
“Market conditions were very difficult,” (VLS) (CEO) Enrique Beltranena said, citing sluggish Mexican economic growth, weak demand and exchange rate volatility. “While I am disappointed in the quarter’s financial results, we responded well to the challenges,” he said. “We managed capacity and pricing in a responsible way, reaffirmed our cost control discipline and grew non-ticket revenues.”
Total operating revenue was MXP2.78 billion, down -9.3% from MXP3.06 billion in the 2013 1st-quarter. Operating expenses were MXP3.26 billion, up +7.9% from MXP3.02 billion in the year-ago quarter.
Volaris (VLS)’ 1st-quarter traffic grew +10.7% year-over-year to 2.2 billion (RPM)s on a +10.8% capacity rise to 2.7 billion (ASM)s, resulting in a passenger load factor of 80.7% LF, down -0.1 point from the 2013 1st quarter. (VLS) booked 2,161,000 passengers for the 1st quarter, up +10.2% from the 1,961,000 passengers carried in the year-ago quarter. Yield dropped -21% to 7.8 cents. (CASM) ex-fuel fell -2.3% to 5.5 cents.
April 2014: Volaris (VLS) added another international route to its network with the addition of 2x-weekly flights (Wednesdays and Saturdays) on the 2,057 km sector from Guadalajara (GDL) to Ontario, California (ONT) on April 10th. The (LCC)’s 11th route to the USA will be served utilizing its 144-seat A319s and will face direct competition from Aeromexico (AMX)’s 5x-weekly operations.
June 2014: Volaris (VLS) has signed a new agreement with Airbus to provide A320 flight simulator training and courses in Miami, Florida, and Mexico for its pilots (FC). Under the agreement, Airbus (EDS) will provide >25,000 flight-training hours for 500 total Volaris (VLS) pilots (FC).
The all-Airbus (EDS) operator has a total fleet of 74 airplanes, including 47 A320 family airplanes. (EDS) is currently building a flight training center in Mexico City, which will be its 1st such facility in Latin America. (VLS) pilots (FC) are scheduled to begin training there in 2015 when construction is complete.
July 2014: As of June 30, (VLS)’s fleet of 48 airplanes comprised 29 Airbus A320s and 19 A319s.
The USA Department of Transportation (DOT) recently granted approval for (VLS) to operate former Mexicana Airlines (CMA)’s routes from Mexico City to Las Vegas, Mexico City to Los Angeles, and Monterrey to Chicago. Mexicana Airlines (CMA), which suspended operations August 2010, legally retains authority for the routes. However, the (DOT) stipulated (VLS) can operate the routes only if Mexicana (CMA) stays insolvent. (VLS) would have to return the routes to (CMA) if the latter airline returns to operational status.
(VLS) has asked the USA Transportation Department (DOT) to extend (VLS)’s authority to serve 4 routes from Mexico City to Denver, to San Francisco, to Los Angeles and to Las Vegas), and 1 route between Monterrey, Mexico, and Chicago. However, Mexicana Airlines (CMA), which suspended operations under severe financial distress in August 2010, still holds authorities for the 5 routes.
(VLS) expanded its presence at Denver (DEN) with the addition of a new route from Guadalajara (GDL) on July 7th. The 2,147 km sector is operated weekly (Mondays), utilizing (VLS)’s 174Y-seat A320s. There is no competition on this route. (VLS) is also flying to Denver with 3x-weekly flights from Mexico City and started weekly operations from Chihuahua on July 12. The Chihuahua (CUU) to Denver route on July 12th is a 1,250 km sector also operated weekly (Mondays), utilizing (VLS)’s 174Y-seat A320s. There is no competition on (VLS)’ 3rd route to Denver.
November 2014: Volaris (VLS) added 2 new low-frequency routes to its network. On November 5th, it began weekly (Wednesdays) flights on the 2,725 km sector from Leon (BJX) to Oakland, California (OAK) using its A319s. No other carrier operates this route. This is (VLS)’ 3rd route to the Californian city, as it already flies daily from Guadalajara and 2x-weekly from Morelia. (VLS) has served Oakland since July 2009. A new weekly (Thursdays) service was added between Tijuana (TIJ) and Merida (MID). The 2,995 km sector will be flown uncontested by (VLS)’ 144Y-seat A319s.
(VLS) has added 2 more routes to its growing domestic and international networks. On November 18th, (VLS) launched 3x-weekly flights on the 882 km route between Mexico City (MEX) and Tapachula (TAP) using A320s. Competition on the route comes from Aeromexico (AMX)’s 22x-weekly flights. This marks a return to (VLS)’ network for Tapachula, a destination (VLS) served briefly from both Toluca and Tijuana in 2008 to 2009. The following day, (VLS) started service between Guadalajara (GDL) and Chicago O’Hare (ORD) operating 2x-weekly (Wednesdays and Saturdays) with A319s on the 2,784 km route, on which (AMX) already offers a daily service. Volaris (VLS) already operates daily flights from Guadalajara to Chicago Midway making it the only international carrier that operates to both of Chicago’s airports.
(VLS) began 2x-weekly Guadalajara to Orlando Airbus A319 services.
December 2014: Volaris (VLS) follows up its new USA route launches with the introduction on December 1st of a new 4x-weekly service between Mexico City (MEX) and Fort Lauderdale, Florida (FLL). The 2,074 km route is not served by any other carrier and will be operated by (VLS)’s A320s. The last time the route was served was in September 2007, when Aeromexico (AMX) operated weekly flights with a mix of 737s and MD-87s. This winter, (VLS) will serve 30 destinations from the Mexican capital, including 8 in the USA. Apart from Fort Lauderdale, (VLS) also serves Orlando in Florida, as well as Chicago O’Hare, Denver, Las Vegas, Los Angeles, Oakland, and San Diego.
February 2015: News Item A-1: Mexican low-cost carrier (LCC) Volaris (VLS) is “very focused” on the visiting friends and family (VFR) market, although it will not “say no” to more business (C) traffic, Manuel Ambriz Lopez Manager Commercial Strategy & Network Planning, said at the "Routes Americas" conference in Denver, Colorado.
News Item A-2: Air Lease Corporation (ALE) announced long-term lease agreements with ultra-low-cost carrier (ULCC) Volaris (VLS) for 2 new Airbus A321-200 airplanes with Sharklets powered by (IAE) (V2533-A5) engines. Both airplanes are from (ALE)’s order book with Airbus (EDS) and scheduled for delivery in spring 2015. (ALE) also delivered 1 new ATR 72-600 to (APEX) Airlines in Myanmar.
News Item A-3: (VLS)’ operating revenue for the full-year was MXP14.04 billion, up +8% (YOY). Non-ticket (ancillary) revenue for the full-year was MXP2.73 billion, up +45% (YOY). (VLS)’ 4th-quarter revenue came to MXP3.96 billion, up +24.3% (YOY); non-ticket revenue for the 4th-quarter was MXP818 million, up +81.2% (YOY).
Per passenger, non-ticket revenues (excluding cargo) increased +50.3% year-over-year (YOY) in 2014 to MXP256/$17.33, up from MXP170/$13 in 2013. (VLS)’ full-year operating expenses came to MXP13.83 billion, up +9% (YOY), producing a full-year operating profit of +MXP204 million, a drop of -35.7% (YOY) from 2013’s +MXP317 million operating income.
(VLS)’ traffic in 2014 was up +8% (YOY) to 9.72 billion (RPM)s on a +8.5% capacity rise to 11.83 billion (ASM)s, creating a full-year load factor of 82.2% LF, down -0.4 point from 2013. (VLS) booked 9.8 million passengers in 2014, a +9.7% increase from 8.9 million passengers in 2013. Full-year yield fell -5.9% year-over-year to 7.9 US cents. (CASM) excluding fuel fell -8.8% year-over-year to 4.9 US cents.
(CEO) Enrique Beltranena lauded (VLS)’ 4th-quarter surge, noting “the network adjustments and non-ticket revenue growth strategy together with a continuous focus on cost control produced (EBITDAR), operating and net margin expansions.”
(VLS) opened 24 new domestic and 12 new international point-to-point routes in 2014. As of December 31, 2014, Volaris (VLS) has 50 airplanes in its fleet, comprised of 32 Airbus A320s and 18 A319s. (VLS) expects to end 2015 with 55 airplanes; 2 A321s are due for delivery during the 2015 2nd-quarter.
March 2015: News Item A-1: Volaris (VLS) has added 2x-weekly (Wednesdays and Saturdays) flights from its Tijuana (TIJ) base to Oakland (OAK) in California. (VLS), the Mexican (LCC)’s inaugural flight between the 2 airports was on March 4th. The 747 km route is not served by any other carrier. (VLS) now serves 29 destinations non-stop from Tijuana, but this is (VLS)’s 1st international service from the airport, and will be operated by its A319s. However, (VLS) already serves Oakland from 4 other Mexican airports; Guadalajara, Mexico City, Morelia, and Leon/Guanajuato.
SEE ATTACHED PHOTO: -
"VLS-2015-03 - TIJUANA TO OAKLAND."
THE SCARY-LOOKING DOG MASCOT IS FROM TIJUANA'S TOP FOOTBALL (SOCCER) TEAM, XOLOS."
(VLS) had added yet another USA destination from its base at Guadalajara (GDL) in Mexico. On March 23rd, (VLS) began 3x-weekly (Mondays, Wednesdays and Saturdays) flights to Houston Intercontinental (IAH) using its A320s. The 1,320 km route is already served by United Airlines (UAL) (24x-weekly) and VivaAerobus (VVS) (4x weekly). This brings to 17 the number of USA destinations served by (VLS) from Guadalajara, and is (VLS)’ 1st service to Houston.
April 2015: Volaris (VLS) ended 2014 with a full-year net profit of +MXP605 million, more than doubling its 2013 net result (+MXP265 million).
May 2015: Volaris (VLS) has received its 1st 2 Airbus A321 airplanes, which will be its 1st A321s to operate in Mexico. They will be used on (VLS)’ domestic routes to and from Cancun.
A320-233 (6610, XA-VLK), EX-(D-AVVT), Hong Kong Aviation Capital leased, A321-231 (6601, XA-VLJ), EX-(D-AVXM), Air Lease Corporation (ALE) leased.
June 2015: News Item A-1: Volaris (VLS) has added a new country to its route map with the launch on June 18 of services to Guatemala City (GUA) in Guatemala. The city will be served 2x-weekly from both Cancun (CUN) and Guadalajara (GDL). Neither the 813 km route from Cancun, nor the 1,505 km route from Guadalajara is served by any other carrier. According to Enrique Beltranena, (CEO) Volaris: “Guatemala becomes our 1st incursion into the Central American market. This is how we underscore (VLS)’s solid growth and our ongoing commitment to our customers, of providing the best air connectivity at the lowest fares in the market. We detected a great opportunity in the Central American market to expand air connectivity to and from Mexico, at very low fares and the youngest fleet in the Americas, made up of 53 Airbus A320s.” 2 new domestic routes were also launched on June 22nd from Cancun to Tuxtla Gutierrez (TGZ) and Villahermosa (VSA). Both of these routes will be flown 2x-weekly by (VLS) and face competition from VivaAerobus (VVS) which operates both routes with 4x-weekly flights.
News Item A-2: Volaris ((IATA) Code: Y4, based at Toluca) (VLS) has commenced A321-200 operations with (6558, XA-VLH) currently plying the México City to Cancún route. Research shows the type will then begin flights from Mexico City to Guadalajara, and not Monterrey General Mariano Escobedo as previously reported, from August 17 onwards.
(VLS) has leased 2 A321-200s from the Air Lease Corporation (ALE) with (6601, XA-VLJ) expected to arrive later this quarter.
(VLS) currently operates 53 airplanes, serves 5 countries, 62 destinations, 142 routes and 259 daily flights.
July 2015: News Item A-1: Volaris (VLS) has added another destination to its growing international network. On July 2 (VLS) began 2x-weekly flights (Thursdays and Sundays) on the 2,200 km route between Cancun (CUN) and San Juan (SJU) in Puerto Rico using its A320s. This is (VLS)’s 1st route to Puerto Rico. No other carrier operates between these 2 airports.
August 2015: News Item A-1: Mexico, like many countries in Latin America, is in serious need of Air Traffic Management (ATM) and airspace modernization (and Volaris (VLS) (CEO) Enrique Beltranena is looking to make sure that happens. (VLS) recently announced it will be leading an initiative in collaboration with Airbus (EDS) ProSky to deploy Performance Based Navigation (PBN) operations at Tijuana and Guadalajara International Airports.
Beltranena said the effort to modernize Mexican airspace actually began 5 years ago with the deployment of the 1st (PBN) procedures at Toluca International Airport in Mexico. Now, the (VLS) (CEO) is working with Airbus ProSky to implement a holistic approach: designing Required Navigation Performance (RNP) procedures jointly with the Direccion General de Aeronautica Civil (DGAC) of Mexico and Servicios a la Navegacion en el Espacio Aereo Mexicano (SENEAM).
"(VLS) has 68% of its flights going to Tijuana and there, we think we can deploy a system which is much more useable, because more and more we are starting to see limitations as traffic there continues to grow," said Beltranena.
According to the (FAA), (PBN) is the use of Area Navigation (RNAV) and (RNP) to improve airspace access and flexibility, primarily through the use of satellite-based navigation procedures and on board avionics. Beltranena said Mexico is following the (FAA)’s NextGen approach of using (PBN) to define performance requirements for routes and procedures that enable aircraft to navigate with greater precision. One of the primary reasons why (VLS) wants to introduce (PBN) at Mexico’s airports is also because of the challenging terrain.
“Most of the cities that the Aztecas, the Mayas, [and] the Incas found were placed on the top of the mountains. And we are different because of that, from the rest of the world. Our airports are by far much more challenging than the airports that you typically find in the USA, or Europe or the rest of the world,” said Beltranena. “When you think about Machu Picchu, Honduras, Ecuador, when you think about Costa Rica, Guatemala all those runways are very challenging.”
Currently, (VLS) is in the midst of a fleet-modernization process that is also focused on ensuring all of its aircraft are equipped to fly (RNP).
Through 2020, (VLS) will receive 60 new Airbus A320s and A321s that were previously ordered between 2012 and 2014. All of those aircraft will roll out of the production factory equipped to fly (PBN) procedures in Mexico. "All of these aircraft, the 60 aircraft arriving going forward, will be equipped to fly (RNP) procedures. The new fleet is already totally retrofitted and it’s coming with the new avionics. It’s about $60,000 per aircraft," said Beltranena.
Beyond airports in Mexico, (VLS) is also working with the Latin America and Caribbean Air Transport Association (ALTA) to modernize airspace throughout other Latin American countries. Air traffic in the region is growing steadily, bringing about the need for modernization. In 2014, Latin American and Caribbean region airlines carried 210 million passengers, an increase from 200 million in 2013.
"A lot of the work we have done; it’s not only about technology and avionics, but also what is involved with the re-design of the routes. Mexico, and a lot of other airspace in the surrounding region has routes that have been designed in the 1950s," Beltranena explained.
Like (VLS), other airlines throughout the region are equipped and ready to start flying (PBN), according to Santiago Saltos, Senior Industry Affairs Director for (ALTA). But civil aviation regulators and Air Navigation Service Providers (ANSPs) throughout the region will need to follow Mexico’s lead and start providing the infrastructure, controller training, and route re-designs to catch up to that equipage.
"(ALTA) member airlines have an average fleet age of 7.6 years, so we are flying newer aircraft. One of the messages that we have, when we meet with government regulators and (ANSP)s, is to let them know we have the avionics to fly (PBN) and we need them to catch up," Saltos told "Avionics Magazine."
"We know the Dominican Republic has just inaugurated two air control towers, Panama has a new air control center, Mexico has done huge investments, Colombia also has done a good job (but we are still missing from some other regions,”) said Saltos. “We are addressing this topic with a lot of effort. The more planes we are seeing up in the sky, there is higher risk, more risk events, we are trying to see how we can collaborate and push the region to have a safe air navigation system."
News Item A-2: Volaris (VLS) is in talks with lessors to take more A321s, as (VLS) believes that the higher-capacity variant of the Airbus narrow body can help it better utilize slots at capacity-constrained Mexico City International airport.
(VLS) added its 1st 2 A321s earlier this year from Air Lease Corporation (ALE). An updated fleet plan shows it expects to operate 4 A321s in 2016, growing to 10 in 2017, +4 in 2018 and at least 4 and +6 more between 2018 and 2020.
September 2015: News Item A-1: Volaris (VLS) has added Costa Rica to its international network with the introduction on September 10 of 2x-weekly flights from both Cancún (CUN) and Guadalajara (GDL) to San Jose (SJO) using (VLS)’ A320s. Neither the 1,260 km route from Cancún, nor the 2,354 km route from Guadalajara, faces any direct competition. Both routes will operate on Thursdays and Sundays. Costa Rica becomes (VLS)’ 4th international market after Guatemala, Puerto Rico, and the USA.
News Item A-2: Volaris Airlines (VLS) began Guadalajara to New York (JFK) service. It will fly into (JFK)’s Terminal 4.
October 2015: News Item A-1: Thus far in 2015, (VLS) has taken delivery of 4 new A320ceos; (VLS) expects to receive its 56th aircraft by year-end.
November 2015: Mexican low-cost carrier (LCC) Volaris (VLS) has rolled out new tablet-based technology for pilots (FC), and is studying how it could provide new entertainment options for passengers’ mobile devices, airline executives said at the (ALTA) Airline Leaders Forum.
February 2016: Mexican low-cost carrier (LCC) Volaris (VLS) earned a 2015 net profit of +MXP2.46 billion/+$142.3 million, >fourfold increase over net income of +MXP605 million in 2014.
(VLS) operates an all-Airbus A320 family fleet, posted 2015 operating revenue of MXP18.18 billion, up +29.5% year-over-year, while expenses heightened +13.3% to MXP15.67 billion. Full-year operating income of +MXP2.51 billion was significantly widened over an operating profit of +MXP204 million in 2014. While fuel remained (VLS)’s highest expense, it dropped -12% compared to 2014 to MXP4.72 billion.
(VLS)’ 2015 traffic rose +18.9% year-over-year to 11.56 billion (RPM)s on a +18.8% lift in capacity to 14.05 billion (ASM)s, producing a load factor of 82.3% LF, essentially flat compared to 2014. Yield increased +5.1% to MXP0.1222.
Volaris (VLS) took delivery of its 1st 2 A321s in 2015 and ended the year with 57 aircraft in its fleet.
March 2016: News Item A-1: Volaris (VLS) has added 3 new Mexican domestic routes at the beginning of March, involving 4 airports. All face direct competition from between 1 and 3 carriers. All routes will be flown by (VLS)’s A320s with either 2x- or 3x-weekly flights. The 2 routes involving Toluca were previously served by (VLS).
Routes as follows:
Monterrey (MTY) to Leon (BJX), A320 2x-, vs Aeromexico (AMX) 26x-, Interjet (AAE) 12x-, VivaAerobus 4x-; to Toluca (TLC), A320 3x-, vs (AAE) 14x-, (AMX) 11x-;
Toluca (TLC) to San Jose del Cabo (SJD), A320 2x-, vs (AAE) 7x-.
News Item A-2: Volaris (VLS) plans to launch a subsidiary airline in Costa Rica to allow it to expand its route network into South America.
July 2017: Volaris (VLS) took delivery of 3 Airbus A320s and 2 A321s during the 2nd quarter, bringing its all-Airbus fleet to 64 aircraft, with an average age of 4.5 years.
October 2016: News Item A-1: (VLS) launched +5 new international routes during the quarter; Dallas to Monterrey, Durango to Los Angeles, Guadalajara to Seattle, Guadalajara to San Francisco, and Austin to Guadalajara. Beltranena said they see their (ULCC) model working in markets outside of Mexico. (VLS) is planning to set up a Costa Rica operation and anticipates getting an air operator’s certificate (AOC) by the end of October or early November so that it can start Central America services by the end of the year. Ultimately, Beltranena told analysts, (VLS) sees its Costa Rica operation growing to the same size as its Mexican business.
(VLS) took delivery of +3 additional aircraft in the 3rd quarter, an Airbus A320neo and 2 A321s. As of September 30, its fleet comprised 65 A320 family aircraft with an average age of 4.5 years, the youngest fleet in Mexico. (VLS) expects to take delivery of 4 A321s during the 4th quarter.
News Item A-2: 1 A320-200 (V2500) (7376), Avolon (AZV) leased. This is the 8th Avolon (AZV) aircraft on lease to Volaris (VLS).
November 2016: News Item A-1: Mexican ultra low-cost carrier (ULCC) Volaris Costa Rica has received an air operator’s certificate (AOC) from Costa Rica’s Civil Aeronautic Authority, paving the way for the December 1 launch of the new Volaris (VLS) subsidiary. “It [the certification] represents the opportunity [for Volaris (VLS)] to grow and expand to other markets, being able to connect Central America,” (VLS) (CEO) Enrique Beltranena said.
Volaris Costa Rica will become the 1st (ULCC) in Central America.
“Our goal for the 1st year is to operate within Central America, beginning with the San Jose, Costa Rica to Guatemala route,” Volaris Costa Rica (CEO) Fernando Naranjo said, adding the airline plans to operate between 18 and 22 aircraft during the 1st 3 years.
As of September 30, Volaris (VLS)’ all-Airbus fleet comprised 65 aircraft, including the 1st A320neo delivered to a North American operator.
In addition to Mexico, Volaris (VLS)’ routes in Central America presently serve Costa Rica, Guatemala and Puerto Rico. (VLS) flies routes to 25 USA cities and 40 Mexican cities. During the 3rd quarter, (VLS) launched 5 new international routes between Mexico and the USA: Dallas to Monterrey, Durango to Los Angeles, Guadalajara to Seattle, Guadalajara to San Francisco, and Austin to Guadalajara.
“With the launch of this new airline, Volaris (VLS) takes a step further in the consolidation of its international expansion strategy,” the company said.
News Item A-2: "(LATAM), and Copa (COP) Seek to Get in Front of Latin America’s Low Cost Carrier (LCC) Trend" by Aaron Karp email@example.com, November 22, 2016.
The (LATAM) Airlines Group in revamping its fare structure to offer a basic economy (Y) option on domestic flights and Copa Holdings launching a low-cost carrier (LCC) (Wingo), signal a move toward (LCC) services in Latin America, even among the region’s largest airlines.
(LCC)s have transformed the domestic Mexican market in recent years, and (LCC)s have a strong foothold in the Brazilian market, but the model has not yet caught on in the rest of Latin America. However, that now appears to be changing, particularly in domestic markets and on short-haul flights. (LATAM) (LAN)/(TPR) and Copa (COP)/(REU) including the new "Wingo" are trying to get in front of the trend.
“Passengers are looking for a low, low price, as they are in Europe, and that is going to be the fastest growing segment in our region,” (LATAM) (CEO) Enrique Cueto said during the recent Latin American and Caribbean Air Transport Association (ALTA) Airline Leaders Forum in Mexico City. “We cannot let that segment be taken by someone else.”
(LATAM) is not launching a separate (LCC), but in the 1st half of next year it will start rolling out an unbundled fare structure in the 6 domestic markets its affiliates serve (Brazil, Chile, Peru, Argentina, Colombia, and Ecuador). Passengers will be able to choose a basic fare up to -20% lower than current prices, with the option to pay fees for add-ons such as checking baggage or selecting a seat.
Cueto said he expects to see multiple (LCC)s emerging to serve passengers on short-haul routes in Latin America, and (LATAM) decided it was necessary to modify its fare structure to remain competitive on flights of 2 hours or less. He acknowledged that (LATAM)’s costs on most of the short-haul routes will still be +10% to +15% higher than a pure (LCC)’s costs. “That is acceptable because we want to keep business (C) passengers,” he explained.
Though at a cost disadvantage, (LATAM) will have a “revenue advantage” on the short-haul routes and will offer a product that will be cost competitive enough to keep business (C) passengers from switching to (LCC)s and entice leisure passengers to choose (LATAM), Cueto argued. “If business (C) people go to another carrier, you’re doomed,” he said. “The challenge is we want to keep the business (C) passengers, but we will not give up that [LCC] segment.”
Copa (CEO) Pedro Heilbron conceded the decision to launch Wingo, a (LCC) subsidiary of Copa Airlines Colombia (REU) that will start flying December 1, was an uncharacteristic move for him. “Doing this is like if I were to arrive at this event [the annual (ALTA) gathering of Latin American airline executives] with red pants, a yellow checkered shirt and a hat,” the impeccably dressed Heilbron joked.
Wingo will operate 4 Boeing 737-700s configured with 142Y seats in a single-class cabin on point-to-point services to 16 destinations in Latin America and the Caribbean. Wingo is a “tool” to enable Copa (COP)/(REU) to retain passengers on short-haul routes where there is a growing (LCC) presence, Heilbron said. “Wingo doesn’t need to be profitable to be positive for Copa Holdings,” he said. “If they break even, it will be +ve for us. Of course, we expect them to be profitable.”
Enrique Beltranena, the (CEO) of Volaris (VLS), the ultra-(LCC) credited with leading the low-fares revolution in Mexico that has moved millions of bus passengers to airlines, said there has been “a transformation of travel needs” in Latin America. Volaris (VLS) will take its model to the Central American market with the launch of Volaris Costa Rica next month. “The proof is here” in Mexico that offering low fares will create new air travelers in Latin America, Beltranena said. “I believe we have proven [the model] and we can do something similar in the Central American region.”
However, he cautioned that the low cost carrier (LCC) model has its limits, predicting that traditional service will continue to be the norm on long-haul routes within Latin America and to/from Latin America. “I don’t fully understand the virtues of a long-haul (LCC)" Beltranena said. “I do not understand the model for long-range flights.” Aeromexico (AMX) (CEO) Andrés Conesa said that once passengers get accustomed to air travel, they may eventually migrate to long-haul services on more traditional carriers. “These passengers that used to travel by bus are flying with (LCC)s, but in the future they may be flying with us,” he said.
January 2017: Volaris (VLS) in 2016 had 15.01 million passengers +25.2%, 25.05 million (RPK)s (2015: 18.60 million (RPK)s; +23.9%; 85.8% LF (2015: 82.3% LF).
February 2017: News Item A-1: Volaris (VLS) posted a 2016 net profit of +MXN3.5 billion/+$170 million, up +42.8% over net income of +MXN2.46 billion in 2015, on a +29.3% year-over-year rise in revenue to MXN20.8 billion.
(VLS), in releasing its earnings, announced it would begin charging a fee for the 1st bag checked on flights between Mexico and the continental USA and Puerto Rico starting March 1. Even without the checked bag fee, (VLS) said ancillary revenue rose +12.9% year-over-year in 2016 to MXN381 million. (VLS)’ 2016 (CASM) did rise +11.5%, and (VLS) said it continues “to experience pressure in USA-dollar denominated costs, such as aircraft and engine rent expenses, international airport costs, and maintenance expenses [because of] the depreciation of the Mexican peso.”
Volaris (VLS)’ 2016 expenses increased +32.6% year-over-year to MXN20.8 billion and (EBIT) was MXN2.7 billion, up +9.1% over an (EBIT) of MXN2.5 billion in 2015.
(VLS)’ 2016 traffic rose +23.9% year-over-year to 14.3 billion (RPM)s on a +18.9% lift in capacity to 16.7 billion (ASM)s, producing a load factor of 85.8% LF, up +3.5 points. Unit revenue in 2016, as measured in (PRASM), grew +5.9% and yield rose +1.6%.
(VLS) added 2 Airbus A320s and 4 A321s in the 2016 4th quarter and ended the year with 69 aircraft in its fleet, comprising 15 A319s, 43 A320s, 10 A321s and 1 A320neo.
News Item A-2: Volaris (VLS) on February 1 began service to Miami (MIA) in Florida for the 1st time with not 1, but 2 new routes. On the 2,419 km, 4x-weekly service to Guadalajara (GDL), the Mexican low cost carrier (LCC) faces no competition. However, the 2,049 km route to Mexico City (MEX) is already well served by American Airlines (AAL) (27x-weekly), Aeromexico (AMX) (21x-) and Interjet (AAE) (12x-). Both routes will be flown with (VLS)’s A320s. Guadalajara becomes the 6th Mexican destination now served non-stop from Miami. Up until the end of January Volaris (VLS) operated a similar schedule to Fort Lauderdale, located some 30 km north of Miami.
March 2017: News Item A1: Volaris (VLS) had added yet another USA destination from its base at Guadalajara (GDL) in Mexico. On March 23 (VLS) began 3x-weekly (Mondays, Wednesdays and Saturdays) flights to Houston Intercontinental (IAH) using its A320s. The 1,320 km route is already served by United Airlines (UAL) (24x-weekly) and VivaAerobus (VVS) (4x-weekly). This brings to 17 the number of USA destinations served by (VLS) from Guadalajara, and is (VLS)’ 1st service to (IAH).
News Item A-2: Volaris (VLS) in the last week launched 3 new links between Mexico and the USA. On March 1, (VLS) launched new links from Mexico City (MEX) to Houston Intercontinental (IAH) and New York (JFK) (JFK). Both of these routes are already served by Aeromexico (AMX), Interjet and 1 USA carrier. The most interesting new route was started on March 2 between Guadalajara (GDL) and Milwaukee (MKE), (VLS)' 1st service to the Wisconsin airport. It is also the only 1 of (VLS)’s 3 new USA routes which does not face any direct competition.
With these developments Volaris (VLS) has grown its share of the Mexico to USA market to 9.2% as measured by seat capacity. This ranks (VLS) 5th behind American Airlines (AAL) (20.1%), United Airlines (UAL) (19.3%), Delta Air Lines (DAL) (14.1%) and Aeromexico (AMX) (10.7%), but ahead of Southwest Airlines (SWA) (6.9%) and Interjet (AAE) (5.6%).
May 2017: News Item A-1: Aeroméxico (AMX) is not shy about saying it thinks there’s too much capacity in the domestic market.
News Item A-2: Avianca (AVI) is expanding its flying from San José, Costa Rica, a former hub, to counteract Volaris (VLS) growth.
News Item A-3: While the USA and Mexico have disagreements about land crossings of their mutual border, the 2 nations increasingly agree on brisk cross-border air travel. And Mexico’s domestic airline market has been uncharacteristically vigorous, long growing at double-digit rates and up 14% in the 1st 2 months of 2017, even while the Mexican economy chugged along at 2% to 3%.
June 2017: Mexico’s federal consumer attorney’s office Profeco has fined 5 airlines for charging fees on customers’ 1st checked bags on flights from Mexico City to the USA and Canada.
The fines, imposed on Mexican airlines Aeromexico (AMX), Interjet (AAE), Volaris (VLS) and VivaAerobus (VVS), as well as New York-based JetBlue Airways (JBL), total MXP22.4 million/$1.4 million.
Profeco said the airlines violated provisions of Mexico’s consumer protection law and civil aviation regulations. The federal agency also said the sanctioned airlines were found to have “engaged in misleading advertising, discriminatory acts, abusive clauses in their membership contract and other practices that violate the rights of passengers.”
Profeco said it is keeping open potential proceedings against United Airlines (UAL) and American Airlines (AAL) for the same infringement, and will resolve the matter regarding the 2 USA airlines in coming days.
The fines were levied on the same day new provisions of Mexican consumer protection and civil aeronautics laws went into effect. Under the civil aviation law, passengers have the right to transport, for free, 1 checked bag weighing up to 25 kg/55 lbs and up to 2 pieces of hand luggage of not more than 10 kg each on national and international flights originating from Mexico.
Profeco said airlines are required to inform passengers of their Civil Aviation Act rights, which stipulate the baggage allowances, when purchasing their tickets.
Aeromexico (AMX) received the largest fine (MXP6.3 million), followed by Interjet (AAE) (MXP5.1 million), Volaris (VLS) (MXP4.5 million), VivaAerobus (VVS) (MXP 4.2 million) and JetBlue (JBL) (MXP2.3 million).
November 2017: News Item A-1: Airbus (EDS) signed a $49.5 billion deal on November 15 to sell 430 airplanes to Indigo Partners (INZ) the Phoenix based private equity firm, representing (EDS)' biggest deal ever at the Dubai Air Show.
Airbus (EDS)' previous biggest aircraft sale deal was made in August 2015, when it sold 250 A320neos to Indian low cost carrier (LCC) Indigo Airlines (unrelated to Indigo Partners) in a deal estimated to be worth $26 billion at list prices.
The Airbus (EDS) deal with Indigo Partners (INZ) will split the 430 airplane orders into 273 A320neos, and 157 A321neos among Denver, USA based Frontier Airlines (FRO), JetSmart (JSM) of Chile, Volaris (VLS) of Mexico and Wizz Air (WZZ) of Hungary. The A320neos list for $108.4 million apiece and A321neos at $127 million.
January 2018: News Item A-1: "Mexico’s Volaris Raises (4Q) Profit Guidance on Rising Yields" by Mark Nensel firstname.lastname@example.org January 5, 2018.
Following the December 2017 launch of 8 international routes and subsequent indications of improving yields, ultra low cost carrier (ULCC) Volaris (VLS) increased its profit guidance for 4th-quarter 2017 to 27% to 29%.
In its December 2017 preliminary traffic statement (which reported a 3.1% year-over-year (YOY) increase in passenger traffic for the month of December and 11.1% (YOY) traffic growth for the full year) (VLS) said a “quarter-over-quarter yield improving environment” led the company to increase its 4th quarter adjusted (EBITDAR) margin guidance.
The increase reflects an actual average exchange rate of MXP19.16 per USA dollar and average economic fuel price per gallon of $1.90, (VLS) said. (VLS) did not provide specific revenue or yield figures for the month. While a positive development for an airline that as of September 30, 2017 was showing a -MXP1.2 billion/-$63 million net loss for the 1st 9 months of 2017 (compared to a +MXP2.5 billion profit for the same period in 2016), (VLS)’ new 4th-quarter guidance nonetheless shows a drop in adjusted (EBITDAR) by approximately 6% points compared to (VLS)’ (4Q) 2016 34.1% adjusted (EBITDAR) margin.
(VLS) (CEO) Enrique Beltranena said in (VLS)’ (3Q) 2017 financial report that (VLS) was operating in a “challenging environment” in 2017, citing competitive fares from rival (LCC)s, natural disasters, higher fuel prices and exchange rate volatility.
In December, (VLS) introduced 4 new USA to Central America international routes (Los Angeles to Guatemala City; Los Angeles to San Salvador, El Salvador; New York to San Salvador; and Washington, DC to San Salvador). Additionally, 4 California to Mexico routes (Fresno to Morelia; Los Angeles to Acapulco; San Jose to Morelia; and San Jose to Zacatecas) and 1 new domestic route (Morelia to Mexicali) began service during the month.
Volaris (VLS)’ subsidiary Volaris Costa Rica is set to launch round-trip direct service to the USA on March 15, with sales for flights from San Jose, Costa Rica to Los Angeles International Airport (LAX), New York (JFK) and Washington Dulles (IAD) already underway.
Volaris (vls) is looking to grow its fleet significantly with 46 Airbus A320neos and 34 A321neos as part of the recent massive order for 430 A320neo family aircraft engineered by Phoenix-based private equity fund Indigo Partners (INZ), which was finalized December 28, 2017. (VLS) is 1 of 4 Indigo-affiliated airlines in the purchase, alongside fellow (ULCC)s Denver-based Frontier Airlines (FRO), Chile’s JetSMART (JSM) and Hungary’s Wizz Air (WZZ).
(VLS)’ new aircraft, worth $9.3 billion at list prices, are set to be delivered from 2022 to 2026. (VLS)’ existing fleet of 70 all-Airbus aircraft will also be expanded by 41 A320neo family aircraft the airline is committed to receive through 2021.
January 2018: Denver-based Frontier Airlines (FRO) and Mexico City-based Volaris (VLS) have entered into a code share agreement, signaling further cooperation between 2 carriers affiliated with private equity firm Indigo Partners (INZ).
(FRO), which adopted the ultra low cost carrier (LCC) model in 2014, is wholly owned by Indigo Partners (INZ), which is also a major shareholder in publicly traded Volaris (VLS) (generally considered to have the lowest unit costs of any North American airline). In recent months, there has been more talk of cooperation among Indigo Partners (INZ) affiliated airlines.
(INZ) Managing Partner Bill Franke announced a massive order at the Dubai Air Show in November for 430 Airbus A320neo family aircraft to be split among 4 (ULCC)s in which (INZ) has holdings: Frontier (FRO), Volaris (VLS), Chile-based JetSMART (JSM) and Hungary-based Wizz Air (WZZ).
(INZ) has said Frontier (FRO) will get 100 A320neos and 34 A321neos from the order, while Volaris (VLS) will get 46 A320neos and 34 A321neos.
Prior to the aircraft order, (INZ) had not talked about the airlines in which it has stakes as being connected. The (FRO) - (VLS) code share pact is another instance of Indigo Partners (INZ) carrier speaking publicly about cooperation.
“Volaris (VLS) is an ideal partner with which to align,” (FRO) President & (CEO) Barry Biffle said.
Subject to regulatory approval in the USA and Mexico, code sharing between (FRO) and (VLS) will commence this spring. “Once the code share is in place, passengers will enjoy a seamless low-fare travel experience traveling on (FRO) and (VLS),” the carriers said in a joint statement. “We estimate that our partnership will add around 20 new destinations to our network and 80 new routes between Mexico and the USA,” (VLS) (CEO) Enrique Beltranena said.
The carriers added: “A natural fit between the carriers’ networks already exists with each serving >20 of the same markets. In addition, both carriers fly Airbus A320 aircraft. (FRO) operates a fleet of 78 aircraft with 199 additional aircraft on order and (VLS) operates a fleet of 71 with 128 additional aircraft on order.”
Click below for photos:
VLS-A320 - 2013-02
VLS-A320NEOS - 2011-11
VLS-A321-200 - 2015-05.jpg
14 ORDERS A320 FAMILY AIRPLANES, 7 A320 (GEF) LEASED:
38 OPTIONS A319/A320/A321:
2 A319-132 (V2524-A5) (1140, /99 N473TA "ABERLADO;" 1159, /00 N474TA, "ANAMARINA"), FLY LEASING LEASED 2006-02. 144Y.
1 A319-132 (V2524-A5) (2277, NTU; 2296, /04 XA-VOR; 2335, NTU; 2362, NTU), EX-(BLR), (TCI) LEASED. 144Y.
1 A319-132 (V2524-A5) (2657, /05 XA-VOI "IRERI;"), 2006-03. 138Y.
1 A319-132 (V2524-A5) (2666, /06 XA-VOL "JUAN PABLO"), EX-(BLR), (TCI) LEASED 2006-03. 138Y.
1 A319-132 (V2524-A5) (2997, /06 XA-VOC "CHRISTIAN"), 2007-01. 138Y.
2 A319-132 (V2524-A5) (3252, /07 XA-VOS "SANDRA;" 3317, /07 XA-VOT), (TCI) LEASED 2010-12. 138Y.
1 A319-132 (V2524-A5) (3463, /08 N502VL "YIN WEN"), (ILF) LEASED 2008-04, 138Y.
1 A319-132 (V2524-A5) (3491, /08 N504VL, "ISABEL" - - SEE PHOTO - - "VLS-A319-N504VL-2010-10;" 3590, N504VL "LOURDES"), MACQUARIE LEASED 2008-04. 138Y.
3 A319-133 (V2527M-A5) (2771, /06 XA-VOA "ADRIANA"/KRISPY KREME LOGO - - SEE PHOTO; 2780, /06 XA-VOB "RAUL"), (TCI) LEASED 2007-01. 2780 HAS ADDITIONAL "SAN LUIS POTOSI" TITLES. 144Y.
9 A319-133 (V2527M-A5) (2979, /07 N501VL "GUADALUPE;" 3045, /07 XA-VOD "DYNA;" 3069, /07 XA-VOE "EDGAR;" 3077, /07 XA-VOF "FERNANDO;" 3175, /07 XA-VOG "GUILLERMO;" 3253, /07 XA-VOH "CARMEN;" 3279, /07 XA-VOJ "JENNIFER;" 3450, /08 XA-VOK "VERONICA"), RBS AVIATION CAPITAL LEASED 2007-03. 144Y.
1 A319-133 (V2527M-A5) (3705, /08 XA-VOO "ANDRES"), AMENTUM LEASED 2008-11. 144Y.
2 A319-133 (V2527M-A5) (4403, /10 XA-VOP "ROSALINDA;" 4422, /10 XA-VOQ), (TCI) LEASED 2010-08. EX-(D-AVXI & D-AVXK). 144Y.
1 A320-200 (V2500) (7376), AVOLON (AZV) LEASED 2016-10.
9 +67 ORDERS A320neos (INZ) LEASED.
1 A320-232 (V2527-A5) (2204, /04 XA-VOU), EX-(CS-TQK) 2011-04. 174Y.
1 A320-232 (V2527-A5) (6602, XA-VAE), JACKSON SQUARE AVIATION LEASED 2015-06. 174Y.
20 A320-233 (V2527E-A5) (3524, /08 XA-VOV; 3543, /08 XA-VOW; 3624, /08 XA-VOM "MARIO;" 3672, /08 XA-VON "ISAAC;" 4741, /11 XA-VOX; 4798, /11 N505VL; 4828, /11 N506VL; 4832, /11 N507VL "ALBA;" 4950, /11 N508VL; 5062, /121 N509VL; 5207, /12 N510VL; 5212, /12 N511VL; 5308, /12 N512VL "INIGO;" 5322, /12 N513VL "JORGE;" 5337, /12 N514VL; 5391, /12 N515VL "MARIE;" 5488, /13 N516VL "PAOLA;" 5510, /13 N519VL*; 5651, N521VL "EVA" 2013-06; 6610, XA-VLK, 2015-05), *WITH SHARKLETS. 144Y.
1 A320-233 (V2527-A5) (3672, /08 XA-VON "PEDRO"/LOS TIGRES DEL NORTE COLORS), (RBS) AVIARION CAPITAL LEASED 2008-11. 174Y.
10 ORDERS (2013-02) A320-233 (V2527E), WITH SHARKLETS.
7 +13 ORDERS (2016-04) A321-200 (V2533-A5) (6558, XA-VLH, 6601, XA-VLJ), AIR LEASE CORPORATION (ALE) LSD 2015-05, WITH SHARKLETS. 220Y.
34 ORDERS A321neos (INZ) LSD:
Click below for photos:
VLS-1-Enrique Beltranena -2015-07.jpg
VLS-7-Jose Lusi Suarez-2nd R-2015-07.jpg
GILBERTO PEREZALONSO CIFUENTES, CHAIRMAN (2011-02), EX-(AMX).
ENRIQUE BELTRANENA, CHIEF EXECUTIVE OFFICER (CEO), EX-(TAC).
ROBERTO NAVARRO, CHIEF OPERATIONS OFFICER (COO).
HOLGER BLANKENSTEIN, CHIEF COMMERCIAL OFFICER (CCO).
JUAN LUIS SUAREZ, DIRECTOR FLIGHT OPERATIONS.
FERNANDO SUAREZ, DIRECTOR FINANCIAL.
JOSE LUIS SUAREZ, CUSTOMER SERVICE & SALES DIRECTOR.
MIGUEL AQUINIGA, SALES DIRECTOR.
MANUEL AMBRIZ LOPEZ, MANAGER COMMERCIAL STRATEGY & NETWORK PLANNING.