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News Article

April Brought Significant Passenger Drops for Mexican Airlines

By Alicia Arizpe | Tue, 05/12/2020 - 11:37

Air traffic plunged in April as measures to contain the spread of COVID-19 intensified, with Mexican airlines reporting drops in demand of over 80 percent in domestic and international travel.

March was a complex month for the global aviation industry as more and more countries closed their borders and implemented shelter-in-place measures to avoid spreading the virus. Air travel demand for the month fell globally by 52.9 percent in revenue passenger kilometers (RPK), which are the number of paying passengers multiplied by the distance they traveled, according to the International Air Travel Association (IATA). Mexican airlines began to feel the drop in air traffic during the second two weeks of that month. Aeroméxico, for example, reported that demand fell sharply during the last two weeks of March, falling to a 43.4 percent drop in RPK in comparison to that month in 2019.

These problems only intensified in April. Aeroméxico reported that demand in RPKs fell by 93.3 percent during April, with international demand taking the largest hit falling by 96.3 percent, while domestic demand fell by 85.3 percent. The low demand led Mexico’s flagship airline to sharply cut its capacity during that month. Aeroméxico’s available seat kilometers (ASKs), which is the capacity of an airline calculated by the number of available seats multiplied by the number of kilometers flown, fell by 82.3 percent. Again, international operations suffered the most, falling by 84 percent in comparison to the 77.8 percent drop in domestic capacity. All in all, Aeroméxico transported only 151,000 passengers, 91.1 percent less than April 2019’s 1.69 million.

Mexico’s ultra-low-cost airlines, Viva Aerobus and Volaris, also faced a similar situation. Viva Aerobus reported a drop in demand of 85.7 percent measured in RPKs and a drop in capacity of 83.6 percent in ASK. The airline had weathered the crisis better than its peers reporting a 1 percent increase in passengers during March, while the other airlines reported loses. April painted a different picture and Viva Aerobus reported an 85.9 percent drop in total passengers during that month in comparison to April 2020 for a total of 134,181 passengers. Volaris also reported a significant drop in demand and capacity due to the COVID-19 outbreak. The airline, which measures its figures in miles, reported a 81.8 percent drop in RPMs and a 82.4 percent fall in ASM. During the month, Volaris transported only 307,000 passengers, a significant drop from last April’s 1.85 million.

To address these challenges, airlines are making adjustments that bring their costs down. “We are implementing decisive actions to mitigate the operational and financial impact of the COVID-19 pandemic by making important itinerary reductions during April and May, drastically cutting expenses and carefully administering our liquid assets,” said Enrique Beltranena, Executive President and Director General of Volaris.

Alicia Arizpe Alicia Arizpe Senior Writer