Grupo Viva Aerobus, holding company of Viva Aerobus, Mexico’s ultra-low-cost carrier, achieved a 21% increase in its total operating revenue for 1Q20 compared to the same period of the previous year, totaling $2,676 million pesos.
Total operating revenue is composed by 51% of fare revenue (1,352 million pesos) and 49% of ancillary revenue (1,324 million pesos). This composition reflects a business model that offers passengers the possibility of tailoring their trip thanks to multiple options of additional services. This also allows Viva Aerobus to offer the best rates due to a cost segmentation that faces the fluctuations in macroeconomic variables such as exchange rate volatility or fuel prices.
The increase in total operating revenue was driven by the growing preference of passengers, mainly in January and February, prior to the effects of COVID-19 on flight demand. Consequently, in this first quarter, more than 2.8 million passengers chose Viva Aerobus as their flight option, reaching a load factor of 85%. Such figures meant an increase of 18.4% in terms of passengers compared to the period January – March 2019.
This predilection of travelers for Viva’s services resulted in a 19.2% increase in fare revenue compared to the first quarter of 2019. Regarding ancillary revenue, this also recorded a 22.8% increase compared to the same period last year.
Consequently, the airline also reported positive numbers regarding its EBITDAR which totaled 607 million pesos with a margin of 22.7%, 13 percentage points above the 1Q19 margin.
This first quarter was also distinguished by the airline’s achievements in terms of diversification of services and financial position, being one of the first companies to issue debt in 2020. On the one hand, Viva announced its entry into the cargo transportation market, a positive incursion in the current situation in order to contribute to a reliable and safe supply of medical equipment and food, among many other products.
On the other hand, Viva Aerobus achieved a successful placement of 426 million pesos in stock certificates on the Institutional Stock Exchange, an operation well received by investors which strengthened the company’s liquidity.
In the words of Juan Carlos Zuazua, CEO of Grupo Viva Aerobus, the solid figures of the airline at the beginning of 2020, in line with the record numbers of passengers in recent years, allowed Viva Aerobus to enter the current challenging environment, following the COVID-19 outbreak, from a financially strong position, a resilient team and a successful business model. Besides, the airline established a strategy based on a disciplined cost control, increase in total operating revenue and a strategic administration of flights adapted to current demand.
“We will continue focusing on meeting the connectivity needs of Mexico and providing our passengers the confidence that we take care of their safety, health and well-being with an unrestricted adherence to all the preventive and hygiene measures and recommendations issued by the authorities. Viva Aerobus will keep on working to make flying an accessible option for everyone under a firm mission: Always Safe, Always Reliable and Always Low Prices,” said Juan Carlos Zuazua.