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News Article

Low-Cost Airline Flies High

By Alicia Arizpe | Tue, 02/09/2021 - 08:31

After a tough 2020, Mexican airlines are showing mixed results. While some continue to drag behind in passenger volume, others are fast approaching their pre-pandemic traffic levels.

During January 2021, Mexico’s flagship airline Aeroméxico saw only two thirds of the passengers it carried during the same month in 2020. While 2020 has been described as the worst year in the history of aviation, January and February 2020 were relatively positive for the local aviation industry as the sector did not feel the impact of COVID-19 until March, when travel restrictions took hold in many international destinations and governments across the globe urged citizens to stay home. The industry has gradually recovered from that low point albeit numbers are still dragging. Aeroméxico’s traffic report for January 2021 shows that the airline is gradually approaching pre-pandemic levels of domestic traffic, with demand for domestic flights being 91.6 percent of the previous year’s. However, international demand remains on the low, shrinking by 66.2 percent in revenue passenger kilometers (RPK). Altogether, Aeroméxico’s demand fell by 51.1 percent, total passengers by 33.8 percent and capacity measured in assigned passenger kilometers (ASK) by 38.1 percent. While the year might have been troublesome, the airline received some good news during the past few months as regulators lifted the ban on the Boeing 737 Max. Aeroméxico also reached agreements with its pilots’ and flight attendants’ unions after months of negotiation, which were necessary so the airline could access a much needed US$1 billion loan.

On the other hand, ultra-low-cost airline Volaris’ traffic report for January 2021 highlights that the airline operated at 97 percent capacity in comparison to the same month of last year. “In January 2021, Volaris posted one of the fastest recoveries worldwide as measured by available seat miles (ASMs), a result of its strong ultra-low-cost business model focused on the visiting-friends-and-relatives and leisure segments in the domestic and US-transborder markets,” said Volaris’ traffic report. Volaris, which reports its figures in miles, reported a 17.3 percent contraction in demand and an 18.5 percent fall in total passengers during that month. In both cases, the sharpest drops were felt in international aviation caused in part by the US’s recent regulation that requires all international travelers to provide proof of a COVID-19 negative test taken up to 72 hours before boarding. The airline, however, seems confident in reaching recovery. “We believe Volaris' ultra-low-cost structure and market-leading footprint in the domestic market will continue to position our company at the lead of the airline industry recovery,” said Enrique Beltranena, President and CEO of Volaris.

Alicia Arizpe Alicia Arizpe Senior Writer