- CAPA Analysis
- Schedule Analysis
- Cargo Analysis
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- Fast Fact Report
- Airline Status
- IATA Code
- ICAO Code
- Corporate Address
- Aeropuerto de Monterrey, Terminal C, Zona de carga
Carretera Miguel Alemán Km. 24
Apodaca, Nuevo León, México
- Main hub
- Monterrey Escobedo International Airport
- Business model
- Low Cost Carrier
- Domestic | International
- Airline Group
- Part of Grupo Viva
VivaAerobus launched its first services in Nov-2006. The Mexican low-cost carrier operates from its main base at Monterrey Escobedo International Airport providing domestic services to Mexican Tier I cities and leisure destinations as well as to the US. The carrier also operates to other smaller regional centres. VivaAerobus was formed as a result of a strategic alliance between Grupo IAMSA, one of Mexico’s leading bus transportation providers and Irelandia, the investment vehicle of the Ryan family- founders of Ryanair. Irelandia has also been involved in starting sister carrier, VivaColombia, with both carriers forming part of multinational airline group; Grupo Viva. The airline currently utilises a mix of both Boeing 737 and Airbus A320 aircraft and is undergoing transition to an all-A320 fleet, expected to be complete by 2016.
Location of VivaAerobus main hub (Monterrey Escobedo International Airport)
LCCs will continue to evolve into hybrids of the original core model. CAPA and OAG consider VivaAerobus fits the LCC profile and it is included in our reporting on this basis. Please note: when reporting for an airline is changed from or to LCC the historical data is not affected and it can lead to a distortion in the current reported data. Contact us if you have any queries.
350 total articles
61 total articles
During the mid-2000s the term hybrid business model entered the North American aviation business vernacular as low cost airlines became more sophisticated, adding elements to their strategy outside the boundaries of the traditional low cost blueprint pioneered by Southwest Airlines. Fast forward to 2016, and the term hybrid is becoming outdated, as low cost airlines in North America have adopted many of the same product attributes as full service airlines, and as those airlines have blended in many low cost elements.
North American airlines can now be categorised into four business models – full service airlines; low cost, high value airlines; ultra-low cost airlines; and Southwest, which still aspires to the low cost paradigm but does not offer the product attributes of more upscale low cost airlines. jetBlue has pushed the boundaries of low cost product evolution with its successful Mint experiment, featuring a fully lie-flat business seat, but no other North American low cost airline has (yet) decided to follow suit. Canada's low cost model, WestJet, has hybridised, adding a regional fleet in Westjet Encore, expanding its competitive bandwidth against its main domestic opponent and going long haul on the Atlantic.
In the less mature Latin American aviation market, the low cost airline model is still evolutionary, with the exception of Mexico where three low cost airlines and one full service airline are competing to lure passengers from bus travel. Brazil and Colombia also have low cost airline representation, but the spread of the business model is generally slower in South America, partially due to challenges from the cumbersome regulations that the start-up companies face in bringing their visions to fruition.
Compared with many other regions in Central and Latin America, Mexico’s stable economy is benefiting the country’s two publicly traded airlines Aeromexico and Volaris. There are apparent opportunities for both companies to stimulate traffic, but their business models are completely different. Volaris characterises itself as an ultra-low cost airline while Aeromexico is Mexico’s only full service airline, leveraging its position at Mexico City Juarez international airport to build what it considers to be a major connecting hub and gateway in Latin America.
Ratification of a revised bilateral with the US by the Mexican Senate, and tentative Mexican government approval of a joint venture between Aeromexico and its fellow SkyTeam partner Delta Air Lines, are major steps in Aeromexico’s strategy to distinguish itself as Mexico’s only global, full service airline.
Volaris continues to strengthen its business foundations of VFR (visiting friends and relatives) traffic, and diversifying its network into more US transborder routes. Although Volaris is planning healthy capacity growth in 2016, the company believes that there is enough demand to absorb its projected expansion.
Mexican low cost airline VivaAerobus ended 2015 on a positive note, reversing its losses from the year prior and charting solid EBIDTAR margins. The airline is in the final stretch of a fleet revamp; this entails shedding Boeing 737 Classics operated since its 2006 launch and transitioning to a much younger fleet of Airbus narrowbodies.
Among the new crop of Mexican low cost airlines that formed in the mid-2000s (VivaAerobus, Interjet and Volaris), VivaAerobus remains the smallest measured by market share. Aeromexico, Interjet, Volaris and VivaAerobus are Mexico’s dominant airlines, but VivaAerobus’ 12% in 2015 share was a distant fourth. That could change as VivaAerobus expands its fleet with larger-gauge aircraft, taking steps to broaden the expanse of its network.
VivaAerobus suspended a number of short-lived transborder routes in 2015, and it appears to be focused on rounding out its domestic network in 2016, before resuming international expansion in 2017. During the next few years VivaAerobus could elevate its position in the Mexican market if there is enough demand to sustain the growth plans of the country’s largest airlines.
The dynamics of potential LCC upstarts in Latin America have shifted rapidly during the last few months. The Viva Group, whose airlines include Mexico’s VivaAerobus and VivaColombia, appears to have shelved plans to launch a third airline in Costa Rica. However, Mexican low cost airline Volaris has swept in, reportedly declaring its intent to establish a new subsidiary in the country.
At the same time Chile’s second largest airline, Sky, is working on its transition to a low cost business model, perhaps in part to prevent another airline from attempting to inject low cost competition into the market. Chile’s largest airline is LAN, which is part of the powerful LATAM Airlines Group.
In some ways, the spread of the low cost model in Latin America (excluding Mexico) has moved slowly for a market that has numerous opportunities for traffic stimulation. Perhaps the barriers to establishing a new airline remain high even if all the elements are in place for effective market stimulation.
Roughly three years after the debut of the second airline member of the Viva Group, VivaColombia, Costa Rica has emerged as the base for the third airline VivaCam. The new airline is initially focusing on low cost service to Central America, which has little LCC penetration. Economies in that region are also stronger than most countries in South America, which means that residents in the region are more readily incentivised and able to travel.
The establishment of VivaCam is another step towards the Viva Group establishing itself as a pan-Latin American LCC entity after injecting LCC competition into Mexico and Colombia with the establishment of VivaAerobus and VivaColombia. However, the current Viva airlines have no coordination, and it is uncertain whether VivaCam will initially seek to cooperate with its sister airlines.
However, VivaCam will source aircraft from other Viva airlines. VivaAerobus placed a hefty Airbus narrowbody order in 2013, which will no doubt serve as resource for growth among all the Viva airlines, whatever growth trajectory each airline adopts.
Conditions in Mexico’s aviation market continue to improve as domestic passenger growth remains steady. The stabilising conditions are helping Mexico’s two publicly traded airlines Aeromexico and Volaris regain some lost ground with unit revenues and yields.
One major challenge that remains for those airlines is the rate of depreciation of the MXP against the USD, which was 26% at the end of 3Q2015. Aeromexico and Volaris seem to be weathering the effects of the depreciation as their profits and revenues grew steadily in the quarter.
Both Aeromexico and Volaris feel confident that the improvements in the Mexican market will continue as their respective outlooks for 4Q2015 remain stable. Volaris has expanded its domestic supply growth targets for 2015 as some markets show strong demand from passengers switching from bus travel.