Volaris Navigating the International Market

The airline Volaris has the lead in national and international flights after obtaining 58.5 percent of the market in COVID-19 times. Before the pandemic, the airline at the lead was Aeroméxico. According to the Federal Civil Aviation Agency (AFAC), between January and August three out of ten people flew with Volaris. In September, Volaris mobilized 173,000 passengers out of the 297,000 passengers of all five national airlines. These market dynamics have also been reflected in stock prices, with Volaris’ stock rising 19.47 percent, while Aeroméxico’s dropped 24.3 percent according to the company’s 3Q20 report.

According to Reforma, Volaris’ good results come from taking advantage of low-cost flights. The company did not reduce its operations at an extreme level either, unlike other airlines. Analyst Brian Rodríguez of Grupo Financiero Monex, told El Financiero that Volaris has one of the best financial structures, which allowed it to open new flying routes and a wide variety of destinations and flights. The company had higher liquidity and solvency in what could be considered the worst moment of the pandemic.

In its 3Q20 financial report, Volaris shows a very low decrease in net income. The company’s low-cost flight model has been working in its favor not only to keep it afloat but also to stand out in a troubling market for airlines in general. According to Infobae, Volaris grew 21.2 percent in revenue, Viva Aerobus grew 20 percent and Aeroméxico decreased its revenue by 6.4 percent.

Other factors that have benefited Volaris’ growth over the last nine months was a reduction in Aeroméxico slots, an expansion to 43 new destinations and Volaris’ point-to-point strategy that has reduced the distance between destinations at a much lower cost and also saving time, says Rodríguez. Also, maintaining aircraft in operation in 13.1-hour blocks has given the airline more efficiency in its operations.