Mexicana’s demise helps bolster passenger growth at Volaris

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The four million passengers Mexican low cost carrier Volaris expects to carry this year is higher than originally forecast, driven largely by Mexicana seeking creditor protection and ceasing operations in August.

During a recent interview with ATI Volaris chief executive Enrique Beltranena said passenger growth at Volaris in 2010 is trending higher than expected as Mexican carriers work to fill the void left by Mexicana. He says it is tough to predict passenger levels for 2011 since the Mexican aviation market is in flux.

Beltranena says Volaris expected that Mexicana would keep operating until October. "We thought it was going to be an effect of low season, and they would run out of cash."

Volaris in September launched seven new routes from Mexico City, and Beltranena says the carrier is taking delivery of 10 Airbus A320 family aircraft during the next eight months.

Volaris chief commercial officer Holger Blankenstein says the carrier remains focused on its core markets from Mexico City, which are located in central and Western Mexico. Volaris is based at Toluca airport near Mexico City.

Capacity Volaris had originally planned to introduce to the US ended up shuffling back into the Mexican market, says Beltranena, and for the moment Volaris needs to "execute that very well. We need to keep expanding there [Mexico City] and do things in the right way".

Volaris has regulatory approval to serve the US cities of Fort Lauderdale, Chicago, Phoenix and Las Vegas, and currently serves the California cities of Los Angeles, San Jose and San Francisco.

Beltranena declines to state which US city Volaris plans to serve in the future. He explains when the category 2 safety rating placed on Mexico by FAA earlier this year returns to category 1, "we will start to figure it out". The category 2 rating prohibits Mexican carriers from launching new service to the US or codesharing with US carriers. Beltranena says he expects a restoration to category 1 in six-to-eight months.

Beltranena believes a "very important message" exists in Mexicana's current situation for other airlines. "I think what we are living in Mexico should be a great example to be observed by both the industry and labour unions".

Like the US, he says Mexico had excess capacity "with models of aviation that were not changing and evolving and there is a message in there", which is the importance of reducing costs, being competitive "and for the employees not to keep on pursuing non-viable contracts".