Mexico's VivaAerobus is pulling out of Austin at the end of this month, just over a year after launching services to the Texas capital with significant fanfare and promises to be the anchor tenant of a new low-cost terminal.

VivaAerobus says in a statement today its final flights to Austin will operate on 31 May. The low-cost carrier now serves Austin from Cancun and Puerto Vallarta with two weekly flights on each route.

VivaAerobus cites "the unfortunate outbreak of the swine flu" for driving its decision to discontinue all its Austin flights. The carrier says for May about half of its Austin passengers have requested cancellations and up to another 30% have been "no shows".

"VivaAerobus made this decision due to the extraordinary external circumstances impacting travel with Mexico. Their actions are consistent with what many Mexican carriers are having to do," Austin-Bergstrom International Airport executive director Jim Smith says in a statement.

But while other Mexican carriers in recent weeks have been cancelling flights and reducing frequencies, they have not pulled out of any US markets entirely. US carriers also have cut frequencies on their Mexican routes, and in some cases dropping markets temporarily, but not indefinitely as is the case with VivaAerobus in Austin.

VivaAerobus launched services to Austin last May with flights to Cancun and Monterrey. At the time the carrier had planned to steadily expand its Austin operation to include regular flights to several Mexico destinations, including Guadalajara, Puebla, Leon, Queretaro, Veracruz and Puerto Vallarta.

Of all these routes only Puerto Vallarta was added in January of this year. In the meantime, VivaAerobus stopped serving Austin from Monterrey, where VivaAerobus is based. It also cut the frequency of its Austin-Cancun service.

As a result VivaAerobus' Austin operation has been steadily shrinking instead of expanding. According to data from the Mexican DGAC, VivaAerobus operated 124 transborder flights in May 2008, the first month of its Austin operation. It operated 120 flights in June and 124 flights in July, but since then has not again passed the 100 flight threshold for any single month.

VivaAerobus operated between 80 and 90 flights to Austin the last four months of 2008. In January of this year it only operated 61 flights to Austin, followed by 40 in February and 66 in March.

Data from the Mexico DGAC also show VivaAerobus' Austin operation has struggled. In the first quarter VivaAerobus only carried 10,924 passengers on its 167 flights to Austin. That translates into only 65.4 passengers per flight or an average load factor of 44%. VivaAerobus operates Boeing 737-300s in a single-class configuration with 148 seats.

In 2008, VivaAerobus operated 819 flights to Austin and carried 62,854 passengers. This translates into 76.7 passengers per flight or an average load factor of 52%.

VivaAerobus says "while demand on Mexican routes has returned to normal levels in the last week, the pattern of behaviour on the Austin - Cancun and Austin - Puerto Vallarta routes has not changed". It adds "passengers are still calling for refunds and new demand is almost non-existent".

The carrier says it is offering a full refund for all passengers booked on future Austin flights.

VivaAerobus' decision to exit Austin is a blow to Austin-Bergstrom International Airport as VivaAerobus is the only carrier currently linking Austin with Mexico. The Austin airport spent several years trying to woo a Mexican carrier, and as part of the deal in attracting VivaAerobus agreed to open a new low-cost terminal.

VivaAerobus was the first tenant and is now the only tenant of the South Terminal, which is privately owned and operated by GE Commercial Aviation Services. Austin and GECAS were expecting rapid growth in VivaAerobus' operation but instead the carrier in recent months has only been using the new terminal two days per week.

Source: Air Transport Intelligence news