While more than one airline in the world sought to get rid of its planes or reduce destinations in the midst of the pandemic, the Volaris flight plan was traced in another direction, since although it had to make financial restructuring and stop its wings for a moment, sought to take advantage of the opportunities left by the gaps left by Interjet, Aeroméxico, Avianca, Copa and even the buses, which allowed it to add more aircraft, routes and even recover the value of its shares on the stock market.
The general director of the company, Enrique Beltranena, recalls that when the Covid-19 stopped the country, two ideas passed through his head: the impact it would have on the air sector and tourism and, second, the situation of the airline and the people who depend on it, so the most difficult thing was the negotiations with lessors and suppliers to avoid layoffs.
“We began practically in March, at the beginning of April, a process of financial restructuring, which was a very important process, where we renegotiated labor liabilities for very important amounts, above almost 550 million dollars in that first quarter. We achieved deferrals of 456 million dollars and tightened costs, “he says in an interview with Forbes Mexico.
And it is that, he assures, when you have to lower the planes what eats you is the fixed cost, it was also necessary to prepare to contract enormously, find parking spaces for more than 80 airplanes, more than two and a half million reservations that had to be moved, something like 65 thousand daily passengers seeking to change flights.
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After a few months with their aircraft on the ground, Beltranena explains that the recovery was first driven by visits from friends and relatives during the pandemic, then due to a recovery in national tourism and now in recent months because there is very strong tourism from the United States.
“We finished the month of December with 105% of the capacity we had in 2019, that is to say, the last quarter already showed a significant recovery, then we had a slightly lower recovery in the first quarter, at levels of 80%, because we had the second wave in February and in the third quarter we became above 115%, currently we are practically at 125% ”, he highlights.
But not only people have returned to fly with it, with around 500 takeoffs and over 80,000 daily passengers; Their wings have also grown, since, in terms of fleet, the company originally planned to finish this year with 87 aircraft and now the expectation is 102 aircraft.
In fact, the director of the company che considers that the disappearance of Interjet and the reduction of the Aeroméxico fleet open a gap in the market that allows them to incorporate more fleet and grow at a time when the whole world is decreasing; in addition to continuing to steal passengers from buses, going for them even to centrals such as Tapo.
“40% of Volaris routes do not compete with airlines, but compete with buses, right now that percentage represents 45%, we saw an opportunity there, we went out and on the one hand we sold the protocols and educational biosafety campaigns in the passengers who normally fly ”.
What’s more, The manager highlights that in the stock market they have also taken off, since its share price comes from below 4 dollars to levels above 20 dollars, reaching a market capitalization of practically 2,500 million dollars; along with its possible return to the IPC of the Mexican Stock Exchange (BMV).
“There are many investment funds or the Afores themselves that sometimes do not invest in you if you are not in the index, it opens an opportunity with investors who to some extent have these limitations,” he says.
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Volaris wants to keep flying high and these are their plans
Moving forward, the most important thing for Enrique Beltranena is to strengthen his core routes: Cancun, Guadalajara and Tijuana, grow its participation in the Mexico City airport, to expand Central America and take its first step towards South America in Colombia, in addition to adding even more planes and reaching 130 in 4 years.
“We see a very important middle class, the Central American market had a much smaller middle class compared to what it was 15 years ago and in the last 15 years there has been a very important growth of the middle class, which begins to require flying to tourism and business purposes; We see markets with the influence of buses, in Guatemala El Salvador, Costa Rica have a very important bus component ”.
While, in the case of ColombiaThis route is due to the fact that the business flow turned out to be a natural step, where, as in Central America, they saw a price issue, in which they can compete with lower rates than those offered by companies at this time.
So for the future, the greatest challenge that he sees for Volaris is growth, “here cEach plane is almost the equivalent of opening a factory, we are adding 28 planes in 18 months, what we are talking about, because it is not simply starting 28 planes, but preparing all of our people for those 28 planes “.
Beltranena say that for this they will hire around 2,000 people, who must be prepared, certified, since each plane needs 5 pilots, 5 co-pilots, flight attendants, that is, around 30 people; plus those who are at airports and who maintain aircraft.
Regarding the degradation of the United States, he considers that it does affect the sector because they cannot grow, while the market is frozen.
“The issue is critical, not currently because the gap in routes left by the Internet and Aeroméxico allows us to grow in the domestic market and the gap that Avianca and Copa is generating in Central America allow us to grow in Central America. In the future, maybe a year from now, we need to return to the category and in that category and to grow towards the United States, so it is important to get it back as soon as possible ”.
* This note was originally published on August 17, 2021.
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