Viva Aerobus returns to profitability despite a complex economic environment

Mexican ultra-low-cost carrier Viva Aerobus has returned to profitability after two quarters of net losses, due to the impact of economic uncertainty and rising fuel prices around the world. Viva Aerobus achieved record passenger revenue in the quarter, totaling US$393 million.


How did Viva Aerobus perform in the third quarter of 2022?

Viva Aerobus is a Mexican ultra-low-cost carrier mainly focused on the domestic market, although it has expanded internationally in recent times. During the third quarter of 2022, the airline achieved total operating revenue of US$393 million, an increase of 34.4% over last year.

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Juan Carlos Zuazua, Managing Director, said:

“In the third quarter of 2022, market demand remained favorable with a healthy pricing environment in our markets. As a result, we have been able to grow our business and our unit revenues. However, the continuing effects of global supply chain disruptions, soaring inflation and high jet fuel prices have posed a unique challenge for the airline industry.

During the period, Viva Aerobus carried 5.46 million passengers (an increase of 29.7% compared to the same period last year). Between January and September, Viva Aerobus carried 14.89 million passengers. Nevertheless, ULCC’s total operating expenses increased by 69.7% to US$357 million, resulting in Viva posting a net profit of US$7.3 million.

Photo: Viva Aerobus.

Aircraft delivery delays

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

At the end of the third quarter, Viva Aerobus had a fleet of 65 aircraft. During 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 look at the results of other top Mexican airlines

In the third quarter of 2022, the three Mexican airlines posted net profit for the first time in 2022. Grupo Aeromexico had total revenue of 21.4 billion Mexican pesos (approximately $1.07 billion) , an increase of 61.7% over last year. This allowed the airline to have a net profit for the quarter of 210 million pesos ($10.5 million). Aeromexico carried 5.89 million passengers during this period.

Similarly, Volaris returned to profitability in the quarter, posting operating revenue of US$769 million (an increase of 20.2% over last year) and net income of US$40 million. US dollars. Volaris carried 8.12 million passengers during this period.

Between Mexico’s three major airlines, they made a collective net profit of US$57.8 million in the quarter. Nevertheless, the three remain in the red all year, due to their economic performance during the first two quarters of the year.

What do you think of Viva Aerobus’ financial results? Let us know in the comments below.