This week, the Mexican low-cost carrier Volaris announced the leasing of an additional eight A320neo aircraft to its fleet in 2021, on top of the three aircraft from its purchase order with Airbus. This way, Volaris plans to close the year with a fleet of at least 98 aircraft.
Volaris is already planning where it will deploy this additional capacity. During the World Aviation Festival today, Volaris’ CEO, Enrique Beltranena, discussed the plans for this year and how the low-cost carrier is seizing the gap in the market left by Grupo Aeromexico and Interjet.
Taking advantage of favorable leasing conditions
Volaris finished 2020 with a fleet of 86 aircraft. It consisted of six A319, 64 A320s, and 16 A321s. It offered an average of 188 seats per aircraft, and 35% of the whole fleet was NEO.
In February, we reported that Volaris expects to receive up to 98 new aircraft between 2021 and 2028. While its Airbus order still stands, now, the airline is leasing new planes to accelerate the growth of its fleet.
In a statement, the airline said,
“Volaris has been able to take advantage of the favorable leasing market conditions under which these aircraft can be added to the fleet, all on long-term leases. Our competitors have been scaling down, and this has represented an unprecedented opportunity for Volaris to add additional healthy capacity.”
The low-cost operator continues to play aggressively in the current environment. There was a moment last year when Volaris seized 50% of the domestic market share in Mexico. While that percentage has reduced to the low forties, it shows how Volaris uses the crisis to consolidate.
Where will Volaris deploy the airplanes?
In 2020, Volaris launched many new routes, including two domestic and seven international in the last quarter alone.
Both Volaris and Viva Aerobus are filling the gap left by the unofficial cease of operations of Interjet. Plus, they’re also benefitting from the leisure and Visiting Friends, and Relatives (VFR) market’s quick recovery.
Now, the question is, where will Volaris deploy its recently leased capacity? Beltranena said,
Where are we going to put that extra capacity? Clearly in the loopholes that were made (after Interjet’s exit and Aeromexico’s Chapter 11). As a result of that, we might add some capacity in Mexico City. But markets like Tijuana, Guadalajara, and Cancun are requesting capacity, and those markets to the US with solid VFR markets are also requesting capacity.”
Mexico’s lost capacity
In 2020, Mexico lost 34% of all its commercial airplanes due to the COVID-19 crisis, said Beltranena. The country went from having 355 aircraft to less than 225 nowadays, which has become Volaris and Viva Aerobus’ opportunity.
For instance, Grupo Aeromexico reduced the size of its fleet by rejecting the leases of 25 aircraft. Only one of those planes was a widebody (a Boeing 787-8 Dreamliner). The 24 remaining were Embraer E170 and Boeing 737 NG.
Meanwhile, Interjet’s story was even worse. Interjet went from having a fleet of 88 aircraft (66 Airbus and 22 Sukhoi) to four operational airplanes by December. Then, the airline stopped flying on December 11 and won’t resume operations any time soon (maybe ever).
Then again, one’s crisis is another’s benefit; Volaris and Viva Aerobus have shown that. The two low-costs now control two-thirds of the domestic market. They’re also increasing their presence abroad with new routes to the US and even launching flights to South America.
What do you think of Volaris’ aggressive plan? Let us know in the comments.