Volaris Thinks The Crisis Has Given It A Long-Term Advantage

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Volaris is a Mexican low-cost carrier and is quickly becoming a force to contend with in Mexico. While other airlines in Mexico have been damaged by the current crisis, it has left room for Volaris to expand. As a result, the carrier now believes its expansion amid the crisis has set it up for long-term advantages.

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Volaris has been growing in Mexico, thanks in large part to gaining more access to Mexico City. Photo: Getty Images

Mexico City is a big one

With competitors shrinking, Volaris was able to get some hotly sought after slots at Mexico City’s International Airport (MEX). As part of the 13 new routes Volaris has launched amid this crisis, 11 of them are out of Mexico City. This includes operations to both domestic destinations and the United States. Carolyn Prowse, Volaris’ Chief Commercial Officer, stated the following at the Aviation Festival America’s:

“Taking advantage of the opportunities that we’ve seen in the pandemic will enable us to position so that we’re one of the winners coming out of this long term. Mexico City is a key example of that, where we’ve moved in pretty quickly to be able to open up those new markets. And, if I look at the domestic market capacity in Mexico, and there has been a reduction of around 34% in terms of the aircraft and in the market. So certainly we believe that it’s a long term opportunity for us.”

The hope is for Volaris to hang on to its slots. Ms. Prowse noted that there was an 81% reduction in flying into Mexico City in June, and the carrier does not anticipate those flights coming back quickly, which should allow it to hold onto its slots.

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Volaris is on track to grow to beyond a 40% domestic market share. Photo: Getty Images

Why Volaris has a great opportunity to succeed

One thing that Volaris has going for it is that it is a low-cost carrier and can target leisure travelers. Few countries allow Americans to enter their borders, and Mexico is one of them. This is one reason why Volaris has been flying a decent amount of transborder capacity.

Competitors are struggling. Interjet has a lot of issues to overcome still, and Aeromexico does not have the same cost structure as Volaris. Operationally, Volaris has an advantage there to win over the lion’s share of price-sensitive leisure travelers. This year, Volaris is already looking like it will cross 40% in terms of domestic market share and get to nearly a 20% market share on international routes out of Mexico.

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Combined, both of these are turning Volaris into a force to contend with.

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Volaris has also been engaged in extensive advertising. Photo: Getty Images

In October, Volaris recorded an 82% load factor. Network capacity was down just under 16% year-over-year, so the airline had pretty healthy numbers in October. The airline recorded a passenger demand (measured in revenue passenger miles or RPMs) increase of 13.3% versus September 2020.

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Volaris has a lot of room to grow

Volaris has plenty of Airbus A320neo and A321neo aircraft on order. Already, Volaris has been taking delivery of new aircraft and has worked to grow its domestic market share. While the carrier has no plans to go long-haul international yet, it could be on the cards if the airline later goes for A321LR or A321XLR jets.

Heading into November, Volaris plans to operate about 94% of its capacity, or only about a 6% drop in capacity for the month year-over-year. This puts the airline well on track to its goal of at least 95% of its pre-crisis schedule in operation by the end of the year. The airline also has operations in Central America, which are expected to resume on November 23rd. That, however, only makes up about 2% of Volaris’ total capacity.

Are you a Volaris fan? Do you think the airline is gaining a long-term competitive advantage? Let us know in the comments!

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