VivaAerobus plans major Mexico City and fleet expansion

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Mexican low-cost carrier VivaAerobus plans to open a base in Mexico City early next year as it prepares to almost double its Boeing 737-300 fleet.

VivaAerobus commercial director Roberto Valdez says the carrier has committed to leasing 10 additional 148-seat 737-300s in 2011, expanding its fleet from 11 to 21 aircraft. He reveals nearly all the additional aircraft will be based in Mexico City, including three of the four 737-300s which are scheduled to be delivered in the first quarter of next year.

VivaAerobus began serving Mexico City in the second quarter of this year with one daily flight from each of its two existing bases - Guadalajara and Monterrey. At the time VivaAerobus, which has always focused on niche routes in northern Mexico and had never served the capital, said Mexico City would just be a destination and the carrier would continue to focus on Guadalajara and Monterrey.

But Valdez says VivaAerobus' initial success in Mexico City prompted the carrier to decide in July that it would seek to expand its operation there in 2011 and make Mexico City its third base. This plan was accelerated after Mexicana suspended operations in August, prompting VivaAerobus to launch six new routes from Mexico City in October by improving utilisation on its existing fleet of 11 737-300s.

The carrier now has 13 daily flights to eight destinations from Mexico City using aircraft and crews which are based in Guadalajara and Monterrey. Valdez says VivaAerobus now expects to expand its Mexico City operation in 2011 to include 18 destinations and 35 daily flights during peak period.

Valdez says VivaAerobus already has the authorisation to serve all 18 of these routes "and we're now starting the process to request the slots". He says VivaAerobus is confident it can secure "decent slots" at Mexico City, including at peak hours, although the government-owned airport operator is not yet willing to redistribute those slots held by Mexicana or Aviacsa, which ceased operations last year.

While Mexico City is poised to become VivaAerobus' largest base Valdez stresses that "we're not losing our focus on Guadalajara and Monterrey".

Valdez says the carrier's Guadalajara base, which has quickly expanded since opening in 2009, will be expanded next year from 11 to 19 routes. He says VivaAerobus plans to add a fourth aircraft at the Guadalajara base in the first quarter of next year to facilitate this expansion.

Valdez says VivaAerobus is not planning for now to further expand the domestic operation at its original Monterrey base, where it bases eight aircraft and serves 25 destinations "It's a base that is already stable," he explains.

The Mexico City expansion will put VivaAerobus into more direct competition with other Mexican carriers, including Aeromexico, Interjet and Volaris. VivaAerobus until now has intentionally focused on niche point-to-point routes where there is little or no competition. Valdez says VivaAerobus only currently competes against other carriers on eight of its 25 Monterrey routes although it does have competition on seven of its 11 Guadalajara routes.

But Valdez is not concerned about the more intense competitive environment in Mexico City because as an ultra-low cost carrier "VivaAerobus caters to a new market - a market that is now taking the bus and is not flying".

VivaAerobus expects its upcoming expansion will grow its annual traffic to 3.8 million passengers in 2011, compared to 1.5 million passengers in 2009 and a projected 2.3 to 2.4 million passengers in 2010. This year's growth was driven by the addition of four 737-300s which were added late last year and early this year.

Valdez says of the 10 737-300s to be added next year, four will arrive in the first quarter and the remaining six in the second half. In addition to three of the four first quarter aircraft, Valdez expects most of the six second half aircraft to be based in Mexico City.

He says for now the carrier plans to stick with the 737-300 although in the longer-term it will start to look at fleet renewal options.