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Mexico’s VivaAerobus gets $150 million in American financing

Mexico City, Mexico — VivaAerobus has signed a $150 million five-year financing package with American group CarVal Investors. The airline says the funding will help increase its market presence and strengthen its business model with growth of the fleet, routes and operations in coming years.

“This financing from CarVal Investors reflects confidence in VivaAerobus’ ultra-low-cost business model and in the viability of our expansion plans,” Juan Carlos Zuazua, CEO of VivaAerobus said in a statement.

“At CarVal Investors, we are very excited to support VivaAerobus to continue its mission of offering accessible, reliable and safe air transportation for all Mexicans,” said Lucas Detor, CEO of CarVal Investors.

The low-cost airline segment has recovered passengers at a better rate than those that operate under a traditional scheme, nearing pre-pandemic figures. Among the four main airlines in Mexico, VivaAerobus is closest to returning to those levels.

During the first quarter of the year, the number of reservations reported by VivaAerobus was 90 percent of those reported in the same period of 2020, “despite the escalation in distancing measures that occurred in January in some of our most important places.”

In March, the airline registered a growth of 27.4 percent in the number of reservations, compared to the same month in 2020.

Operating income during the first quarter of the year was in line with its annual comparison, amounting to 2.6 million, with 45.7 percent of the income corresponding to tariffs and 54.3 percent to complementary income.

“The latter constitutes a central element of our ultra-low-cost model, which has allowed us to mitigate the impact of the COVID-19 pandemic on revenues,” the company said.

VivaAerobus is also preparing to operate flights between Mexico and Colombia for the first time, with the opening of a first route between Mexico City and Bogotá, which will begin August 21. With this, it intends to make its way into one of the most attractive markets in South America, which until before the pandemic, was dominated by Interjet.