VivaAerobus brings low-fare compeition to US routes

Washington DC
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Mexican low-cost carrier VivaAerobus is making a new push in the transborder market, as it believes it can stimulate traffic on routes to the USA.

The airline now serves only Houston Intercontinental from its Monterrey base, but this is set to change in the following months as it launches operations on four new US routes.

VivaAerobus recently announced it will resume Monterrey-San Antonio and Monterrey-Las Vegas, from 24 November and 5 December respectively. Separately, it will begin operations on Guadalajara-Houston on 20 November and Cancun-Houston on 3 December.

The airline will face competition on the routes from full-service carriers and Mexican low-cost peer Interjet.

United Airlines is the only airline serving both Guadalajara-Houston and Cancun-Houston, schedules in Innovata show. VivaAerobus will compete against Aeromexico and Interjet on both Monterrey-Las Vegas and Monterrey-San Antonio.

"We are interested in these important markets, and we can offer significantly lower fares than the full-service carriers on these routes," VivaAerobus chief executive Juan Carlos Zuazua tells Flightglobal.

Zuazua says the airline is confident in resuming the flights to San Antonio and Las Vegas. "We stopped serving them for more than 12 months because we needed to put the capacity somewhere else in the domestic [Mexican] market."

The carrier is targetting US leisure travellers for the flights to Cancun, and a mix of both Houston- and Guadalajara-originating traffic for the Guadalajara flights, he adds.

"With lower fares, these markets can grow. Some passengers that are already flying can now fly more often, and those who have not flown will fly on these routes too," say Zuazua.

VivaAerobus is unlikely to announce additional US destinations for the remainder of 2014, but Zuazua says the airline is evaluating new points for 2015. Asked if VivaAerobus could add destinations outside of Texas and Nevada, he says: "We are looking for the best opportunities, and we are totally agnostic about where we could fly to."

The airline's US expansion comes as the US and Mexican governments continue with talks to liberalise air service between the two countries. The existing air services agreement restricts each nation to designating up to only two carriers on each city pair route. The exception is on flights between USA and 14 Mexican cities, where each country can designate up to three airlines.

US and Mexican officials are scheduled to meet in Washington DC this month to continue discussions. A US Department of Transportation spokesman said in July that talks so far have made "significant progress".

Zuazua says he is in favour of full open skies between the USA and Mexico. "We would like for all the designations to be opened up, and for supply and demand to respond accordingly," he adds.

The carrier is in the process of transitioning its all-Boeing 737 fleet to Airbus A320s. It plans to operate the Cancun flights with A320s, the Guadalajara flights with 737s and a mix of both types on the other two routes.

VIvaAerobus' fleet consists of 15 737s and five A320s, and it expects a sixth A320 by year-end or in January, says Zuazua. The six A320s are leased aircraft as VivaAerobus awaits first delivery from its order of 52 A320s that it announced in October 2013. Comprising 40 A320neos and 12 current generation A320s, the first aircraft from the order will arrive in May 2015, says Zuazua.