Air Transport

Volaris CEO Enrique Beltranena is refuting suggestions made by Southwest Airlines unions that are protesting Southwest's decision to codeshare with the Mexican low-cost carrier.

In a message to members earlier this month, Southwest Airlines Pilots Association (SWAPA) president Carl Kuwitzky called the new codeshare deal with Volaris "troublesome" and claimed "our company is risking brand dilution by associating with an unknown carrier".

Speaking to reporters at the end of last week at the ALTA airline leaders' forum in Cancun, Beltranena responded: "Our pilots could be saying exactly the same thing."

Beltranena points out that Volaris has a well established brand in Mexico and actually has a higher share of the Mexican domestic market than Southwest has of the US domestic market. "It's something they have to take into consideration," he says.

SWAPA, which is currently negotiating a new contract with the carrier, along with other Southwest unions is questioning why Southwest cannot use its own fleet of Boeing 737s to operate transborder routes instead of forging codeshare deals with Volaris and Canadian low-cost carrier WestJet.

In particular Southwest unions are bitter about not being given the opportunity to fly international routes. Southwest is now planning to cut back capacity by 5% in January and the unions believe this capacity can instead be redeployed profitably on new international routes to Mexico, Canada and the Caribbean. Southwest now only operates domestically.

Beltranena acknowledges Volaris' deal with Southwest gives Volaris the exclusive right to operate Mexico-US flights even though Volaris' unit costs "are a little higher than theirs". But he says Volaris will generate traffic for Southwest, including on Southwest-operated connecting flights within the US, as much as Southwest will generate traffic for Volaris.

Beltranena says Volaris will also stimulate the US-Mexico market, persuading Mexicans living in Mexico and the US to fly for the first time instead of taking the bus. He points out that 38% of Volaris domestic passengers have never flown before and he expects a similar portion of first time fliers when it begins international flights.

Southwest unions are particularly concerned about the use of other airlines to fly Southwest passengers after ATA, which placed Southwest code on its flights to Hawaii, suddenly ceased operations earlier this year. Kuwitzky says "our company's experience with ATA via a codeshare agreement resulted in numerous customer service and operational problems that reflected poorly on Southwest Airlines which adversely affected our brand".

The head of Southwest's pilot union says while the Volaris tie-up could have a favourable outcome, "it does nothing to satisfy membership angst over potential brand dilution due to poor customer service or operational issues".

But Beltranena points out that Volaris is not so unknown, having already become Mexico's largest low-cost carrier. Volaris already operates 21 Airbus A320 family aircraft and is on pace to carry over 3.5 million passengers this year.

Beltranena acknowledges it is an unknown in the US but Volaris is preparing to launch a major marketing campaign in the US next year to raise its brand awareness on the other side of the border.