Mexican Airlines Report Encouraging Trends on Road to Recovery
Volaris, Mexico’s low-cost airline, obtained in July a 40 percent growth in passenger transportation compared to 2019 and an occupancy factor of 85 percent. The aviation company reached 2.8 million passengers, the highest traffic in its history compared with Aeroméxico and Viva Aerobus’ numbers.
“We remain disciplined in adding capacity to meet passenger demand,” said Enrique Beltranena, executive chairman and CEO of Volaris, in a statement. “The company continues to adapt its network to optimize growth to an environment of high fuel prices and reallocate capacity, as appropriate, to more profitable routes,” he told business magazine Expansion.
While airline revenues outperformed 2019, so did their costs. Volaris increased in the second quarter by 20 percent in operating income, with $691 million, but with a net loss of $49 million.
As reported by the airline, its capacity—measured in available seat miles, or ASM—increased 28.8 percent compared to July 2021, while demand rose 21.9 percent in the same period.
Despite a recovery in revenues of more than 90 percent and losses reduced by $90 million, Aeromexico’s balance sheet continues with negative numbers, according to the second-quarter report. Meanwhile, Volaris has reported losses of $49 million in the second quarter of the year with a 54 percent drop in EBITDA compared to 2020.
Volaris’ losses during this quarter reflect a sharp drop compared to last year’s period when it reported a profit of US$77 million. According to its report to the Mexican Stock Exchange (BVM), it accumulated a net loss of US$98 million in the year’s first half. The results are mainly due to the increase in operating expenses, specifically related to fuel prices.
The airline’s EBITDA fell 54 percent concerning the same period of the previous year, to US$107 million. Total revenues reached US$691 million, an increase of 20 percent compared to 2020, reported El Financiero newspaper.
Volaris Arrives in Peru
According to data from the Peruvian Ministry of Foreign Trade and Tourism (Mincetur), Mexico is among the ten most visited countries in Peru. In addition, this year, the Peruvian Export and Tourism Promotion Commission (PROMPERú) expects the sector to contribute more than 2 percent to the gross domestic product (GDP).
“We are boosting air connectivity in our country with the firm will to recover pre-pandemic indexes. To this end, we must continue generating conditions for the most important airlines to arrive in Peru. The start of operations of Volaris guarantees new investments and plays a fundamental role in developing low-cost air connectivity,” said Roberto Sánchez Palomino, Peru’s Minister of Foreign Trade and Tourism.
For his part, Humberto Hernández Haddad, Mexico’s undersecretary of tourism, said in a press release that “Mexico and Peru have a promising tourism horizon; from 2020 to 2021 alone, the arrival of Peruvian tourists to our country increased 64 percent. This year the supply of flights and scheduled seats between both destinations grew 140 percent and 152 percent, respectively, compared to 2021. Similarly, the Peruvian tourism sector had a 2.5 percent share of GDP in 2021, and its pre-pandemic share was 3.9 percent.”
Volaris will dedicate two aircraft to the Lima operation. Through the ultra-low-cost model, they will offer more than 25 thousand seats per month to boost the air market with the lowest base fares and a scheme in which customers decide how to travel, paying only for the additional services they need.