Mexico's Volaris slows down fleet expansion

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Mexican low-cost carrier Volaris has opted to slow down fleet expansion and now plans to add only three additional Airbus A319s next year.

Volaris currently operates 19 A319s and two A320s. CEO Enrique Beltranena told ATI in August the carrier was accelerating its 2009 fleet plan from one to seven A319s, including three more aircraft than initially planned from Airbus and four more from lessors. But he now says Volaris has opted to not go ahead with the four lease deals.

"With the condition of the market I don't think right now we'll go for" more aircraft in 2009, Beltranena said on the sidelines of last week's ALTA airline leaders' forum in Cancun.

He adds Volaris will now not take its next aircraft, an A319, until June. He says two more A319s are slated to be delivered in the fourth quarter of next year, giving it a fleet of 24 aircraft at the end of 2009.

Volaris is currently only committed to take one additional aircraft in 2010, giving it a fleet of 25 aircraft at the end of 2010. Beltranena says the carrier will make a decision in June on whether to exercise options with Airbus to expand its fleet in 2010 beyond 25 aircraft.

Volaris' original business plan envisioned adding about seven aircraft per year but due to the current downturn the carrier may hold off on resuming rapid expansion until 2011.

Volaris will eventually need more aircraft to support its new transborder operation, which will launch late next year and Beltranena says will grow to include 10 to 12 markets within three to five years. But he says the transborder operation will start small and only require one or two aircraft in 2010.

Domestically he says Volaris is also running out of opportunities to further grow its network. It now operates to 23 cities in Mexico.

Beltranena expects Mexico's domestic market overall to shrink by 6% in the current quarter, due mainly to the closure of some smaller operators, and register flat growth next year. But he says Volaris plans to continue to add capacity in select domestic markets, taking of advantage of opportunities where other carriers have pulled back.

Specifically Beltranena says Volaris will target domestic expansion in Tijuana, where it has no longer has much competition following the shutdown of Avolar and Aerocalifornia, as well as Cancun, Guadalajara and Puebla.

"With the size of our fleet right now, we're doing what we can to expand where we can in the next year and then start international expansion," Beltranena says.

He says Volaris is on pace to carry just over three and a half million passengers this year. He projects Volaris, which launched in 2006 and has quickly become Mexico's largest low-cost carrier, will surpass the 4 million mark in 2009 despite the slower rate of expansion.