PDC

Mexican domestic market recovery stalls in 2021 Q1; Vivaaerobus, Volaris and Aeromexico taking advantage of collapse of Interjet

Compared with many countries across the globe, Mexico’s domestic air travel market recovered relatively quickly in 2020. After being more than 90% down on 2019 demand in April and May of last year, by December passenger numbers were down only 35% compared with the previous year.

However, early indications for 2021 suggest that the recovery has stalled, as traffic was down 39% in January and almost 46% in February. However, if we compare it with 2019 then the reductions were 32% in January and 38% in February.

Mexican Domestic Market 2017 -2021

Interjet suspends flights

One casualty of the pandemic was Interjet. Having accounted for around 20% of the domestic market in 2017, 2018 and 2019 the airline’s fleet of 25 aircraft (22 Sukhoi Superjet 100s and three A320s) appears to have been permanently grounded at the end of 2020.

As a result of the demise of Interjet there are now three major players left in the domestic market; Aeromexico, Vivaaerobus and Volaris. As of February 2021, Volaris has about 40% of the market, Aeromexico and its subsidiary Aeromexico Connect share around 35%, while Vivaaerobus has 25%. Four other carriers each have less than 1% of the domestic market; Aeromar, Magnicharters, Aereo Calafia and TAR Aerolineas.

Last year Volaris carried 12.2 million passengers on domestic flights (down 31% on 2019) at a load factor of 81.1% (down from 88.0% in 2019). In the first quarter of 2021 passenger numbers are down 15% versus 2020, though the second half of March 2020 saw the first impact of the pandemic.

Aeromexico transported 7.72 million domestic passengers in 2020 (down 45% on 2019) at a load factor of 73.3% (down from 81.0% in 2019). In the first quarter of 2021 passenger numbers are down 8% versus 2020, though, again, the second half of March 2020 saw the first impact of the pandemic.

Vivaaerobus reported 8.12 million booked passengers in 2020 (down 32% on 2019) at a load factor of 80.5% (down from 88.7% in 2019). At the end of 2020 the airline reported operating 131 routes in total, 103 domestic and 28 international. This included 28 new routes launched in 2020, 13 domestic and 15 international. This included several from Mexico City, where it has been able to grow its presence as a result of the difficulties encountered by other airlines.

Mexican Domestic Market 2017-2021

International traffic recovers more slowly

As elsewhere, international traffic was hit harder than domestic traffic by the pandemic. From being down over 95% in April and May, demand recovered but was still down over 50% in December. Figures for February 2021 show demand now almost 70% down on February 2020, the last month before the pandemic impacted travel demand.

Among the carriers, Volaris reported 2.52 million passengers on international flights in 2020 (down 42%) at a load factor of 76.6% (down from 81.0% in 2019). Government figures for Volaris have a figure of 2.17m flown passengers, which suggests maybe the Volaris figure was booked rather than flown passengers.

Aeromexico reported carrying 2.26 million passengers on international flights in 2020 (down 70%) at a load factor of 68.2% (down from 83.8% in 2019). Government statistics have a figure of 2.24m flown passengers. The leading foreign carriers were American (with 2.78m passengers) and United (with 1.95m).