InterJet

Mexican LCCs Interjet, Volaris and VivaAerobus plan more rapid growth for 2012

Mexico’s three low-cost carriers are planning another year of rapid growth as they continue to benefit from the 2010 collapse of Grupo Mexicana. Interjet, Volaris and VivaAerobus saw their combined domestic passenger traffic grow by 41% in 2011 to 13.8 million passengers. Their international operations expanded even faster last year albeit on a very small base, recording 91% growth to 1.2 million passengers. More rapid growth is expected across both the domestic and international networks as the Mexico’s LCC trio plans to take delivery of 17 additional aircraft in 2012, representing 20% growth and resulting in a combined LCC fleet of 101 aircraft.

The LCC penetration rate in Mexico’s dynamic domestic market reached 54% in 2011, compared to 50% in 2010. The total domestic market grew by 4% in 2011 to 25.455 million passengers, which is still 8% below the peak of 2008 when Mexican carriers transported 27.649 million domestic passengers. But the fact Mexico has been able to grow at all the last two years (in 2010 growth was under 1%) is quite an achievement given the sudden collapse in Aug-2010 of Mexicana, which had about a 28% share of the domestic market.

A year after Mexicana's exit, Aeromexico, Mexican LCCs and US carriers are main beneficiaries

One year after the suspension of services at Grupo Mexicana, which became the largest airline casualty since the onset of the global financial crisis, it appears the Mexican market has fully recovered. Mexico’s remaining carriers have been able to quickly absorb Mexicana’s approximately 27% of the domestic market. US carriers have so far been the largest beneficiaries of Mexicana’s demise in the international market but Mexico’s remaining carriers are eager to start narrowing the very wide gap with their foreign competitors.

More record profits for Aeromexico in 2Q2011 as Mexican market recovers

For the second consecutive quarter Aeromexico has recorded its highest level of profitability in at least 15 years. Mexico’s largest airline group has now made about USD300 million in net profits since the collapse of archrival Mexicana in Aug-2010, reversing several years of unprofitability. Group Aeromexico is now aiming to further improve its profitability and market share, particularly in the international market where it still has a relatively small presence.

Aeromexico IPO raises USD332 million for fleet and network expansion

Aeromexico is embarking on a major expansion plan, using the MXN3.89 billion (USD332 million) raised from its initial public offering (IPO). The Aeromexico group, which includes regional carrier Aeromexico Connect and leisure carrier Aeromexico Travel, completed an offering on the Mexican Stock Exchange on 14-Apr-2011. The shares were priced at MXN31 per share, which was towards the lower end of the MXN30-MXN34 guidance range but were heavily oversubscribed.

Aeromexico IPO caps dramatic turnaround

Aeromexico is looking to leverage its significantly improved competitive position and financial outlook by pursuing an initial public offering (IPO) which will help fund the next phase of its expansion plan.