Grupo VivaAerobus, holding company of Mexican LCC VivaAerobus, posted a MXN409 million ($22.5 million) net profit for the 2017 third quarter, up 33.1% over MXN307.5 million net income in 3Q 2016. The company attributed the results to increased 3Q load factor and capacity, driven by competitive pricing. Net income margin was 18%, up 1.6 points from 3Q 2016.

The airline had a 91% passenger load factor during the quarter, up 2.7 points year-over-year (YOY); passenger numbers were up 16.5% YOY to 2.3 million. The LCC’s third-quarter capacity showed a 15.9% YOY increase to 2.6 billion ASKs.

VivaAerobus completed its transition to an all-Airbus fleet in November 2016 and as of Sept. 30 operates a fleet of 21 A320ceos and two A320neos. The company has an additional 38 A320neos on order. By 2022, the LCC’s fleet will reach 55 aircraft, all in a single-class seating, maximum seating density configuration.

Third-quarter revenue totaled MXN2.3 billion, up 21.3% YOY, 59% of which were passenger revenues and 41% “complimentary” (ancillary) revenue. Operating expenses totaled MXN1.8 billion, up 19.2% YOY, which the company attributed to the capacity increase associated with rising fuel costs and exchange rate variations.

“For the third time in a year, our quarterly results show the soundness of our business model … the company was able to record a solid EBITDAR [margin] growth of 41.8%, one of the highest in the aviation industry in the world,” Grupo VivaAerobus CEO Gian Carlo Nucci said. “Our solid results mainly stemmed from higher capacity and tariff growth, added to a better operating environment led by the industrial recovery … the results prompt us to continue monitoring the profitability of our routes and quickly adapt to a changing environment, which this year has not been insignificant.”

The airline’s third-quarter passenger traffic increased 19.4% to 2.4 billion RPKs. RASK increased 4.7% YOY to MXN86.2 cents. CASK was up 2.9% to MXN66.2 cents.

New routes announced during the quarter included winter service between Monterrey-Huatulco, Monterrey-Queretaro and Culiacan-Chihuahua, as well as a new 3X-weekly service between Leon-Tijuana. The airline offers 79 regular routes in addition to the three seasonal routes, covering 33 destinations across Mexico, as well as Houston, Texas. The airline describes itself as “the carrier with the lowest costs in Latin America [with] rates comparable to bus transportation.”

VivaAerobus was originally launched in 2006 and was co-owned by Mexico City-based passenger transport conglomerate IAMSA and Irelandia Aviation (founders of Ryanair). In December 2016, IAMSA bought out Irelandia Aviation’s 49% interest in the company, making the airline 100% Mexican-owned. As part of that transaction, IAMSA sold its 25% stake in Colombian airline Viva Colombia to Irelandia Aviation.

Mark Nensel mark.nensel@penton.com