Viva Aerobus Returns To Profitability Despite Complex Economic Environment

The Mexican ultra-low-cost carrier Viva Aerobus has bounced back to profitability, following two quarters with net losses, due to the impact of economic uncertainty and rising fuel prices worldwide. Viva Aerobus had a record passenger revenue in the quarter, totaling US$393 million.

How did Viva Aerobus do in 2022’s third quarter?

Viva Aerobus is a Mexican ultra-low-cost carrier mainly focused on the domestic market, although it has expanded internationally lately. During the third quarter of 2022, the airline had total operating revenue worth US$393 million, a 34.4% increase compared to last year.

Juan Carlos Zuazua, Chief Executive Officer, said,

“In the third quarter 2022, market demand continued to be favorable with a healthy pricing environment across our markets. As a result, we were able to grow our business and unit revenues. However, the continuous effects of disruptions in the global supply chain, surging inflation, and high jet fuel prices have brought a unique challenge for the airline industry.”

During the period, Viva Aerobus carried 5.46 million passengers (a 29.7% increase compared to the last same period last year). Between January and September, Viva Aerobus had 14.89 million passengers. Nonetheless, total operating expenses for the ULCC increased by 69.7% to US$357 million which led Viva to post a net income worth US$7.3 million.

Photo: Viva Aerobus.

Aircraft delivery delays

Viva Aerobus has repeatedly stated that it has suffered delays from Airbus in terms of new commercial passenger aircraft. Juan Carlos Zuazua explained that the company experienced significant impacts in the quarter due to delays in the delivery of aircraft and spare engines by our main OEMs, Airbus and Pratt & Whitney. This impacted the carrier’s ability to operate efficiently and execute its flying program, forcing Viva to reduce over 16% of its capacity in the summer season.

At the end of the third quarter, Viva Aerobus had a fleet composed of 65 aircraft. In this period, the ultra-low-cost carrier added four aircraft (two Airbus A320ceo, and two Airbus A321neo). Viva Aerobus currently operates 22 A320ceos, 20 A320neos, nine A321ceos, and 14 A321neos.

Photo: Viva Aerobus.

A quick glance at the results of the other Mexico’s top airlines

In the third quarter of 2022, all three Mexican airlines posted net income for the first time in 2022. Grupo Aeromexico had a total revenue worth 21.4 billion Mexican pesos (about US$1.07 billion), an increase of 61.7% compared to last year. This helped the airline had a net income for the quarter of 210 million pesos (US$10.5 million). Aeromexico carried 5.89 million passengers in this period.

Similarly, Volaris returned to profitability during the quarter, posting operating revenues worth US$769 million (a 20.2% increase compared to last year), and a US$40 million net profit. Volaris carried 8.12 million passengers in this period.

Between the top three Mexican airlines, they had a collective US$57.8 million net income during the quarter. Nonetheless, the three remain in the red for the whole year, due to their economic performance in the first two quarters of the year.

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