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 Travel & Outdoors | February 2007 
Viva Aerobus Aims to Start U.S. Flights by August
 Lori Ranson - Aviation Daily
| | Viva Aerobus competes head to head with Aeromexico's regional subsidiary Aerolitoral on nine routes from Monterrey. |
New Mexican low-cost carrier Viva Aerobus has started the process to gain FAA's approval to launch flights to the U.S., in hopes of starting the service in July or August.
The carrier, formed and owned by Mexican bus company IAMSA and the Ryan family, launched flights in November 2006 with two Boeing 737-300s, formerly part of US Airways' fleet.
Carrier CEO and former EasyJet Chief Operating Officer Mike Szucs told The DAILY at the recent Raymond James Growth Airline conference in New York that Viva Aerobus's obvious service targets are in the border states of Texas and California. Initially, the carrier mostly likely will fly a handful of U.S. routes, Szucs said.
The airline hasn't begun discussions with airports but noted that Viva Aerobus has an attractive offering in the high volume of passengers it could drive through potential airports. Estimating that airport costs could be close to 30% of an airline's total expenses, Szucs said the carrier is looking for any way to drive those expenses down.
Unlike other low-cost startups in Mexico that try to steal passengers from the country's incumbent carriers, Viva Aerobus is trying to capture the 100 million Mexicans who don't currently fly, Szucs.
In order to secure growth, Szucs noted fares must be low enough to stimulate markets and entice potential customers who make minimum wage and currently don't travel by air. Some of Viva Aerobus's lead-in fares are as low a one peso, excluding airport fees.
Viva Aerobus competes head to head with Aeromexico's regional subsidiary Aerolitoral on nine routes from Monterrey, and Szucs pointed out Viva Aerobus's fares are one-fifth what Aerolitoral charges.
In addition to Viva Aerobus's goal of market stimulation, the carrier is also zeroing in on costs. It targets a cost per available seat kilometer of less than five cents by the end of the year. But Szucs stressed that low costs alone wouldn't make the carrier a success, adding that another key element is market stimulation. "This is not a market share game," he told conference attendees. "I want to create new markets."
Szucs dismissed any capacity challenges in Mexican airports, noting the only congested airports in the country are Toluca and Mexico City. He also highlighted that there are a number of other airports near Mexico City that can support low-cost carrier growth, pointing to the growth of one Germany's secondary airports -- Frankfurt-Hahn.
During its first months of operation, Viva Aerobus is logging 85% load factors and "sweating its assets hard," Szucs said, with average daily aircraft utilization of 14.5 hours a day.
In the near future, Szucs said Viva Aerobus would fly 26 routes in May, and take delivery of three aircraft between July and October, bringing the total fleet count to eight. Two more 737-300s should enter service by yearend. |
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