VivaLatinAmerica has shelved plans to launch a Central American airline this year in favour of a new and more attractive opportunity that has emerged elsewhere in the region, says chief executive Joe Mohan.
While not revealing the carrier's specific target, Mohan spoke of several new opportunities in the region. These include a new government in Argentina, where VivaLatinAmerica has hopes to stimulate the domestic, low-cost travel market. And the signing of an agreement on 16 February allowing 110 daily scheduled routes between the US and Cuba is another opportunity, with prospects for a "VivaCuba" serving routes from Cuba to the US mainland.
"Cuba is very interesting to us," Mohan says.
The Latin American market beyond Brazil and Mexico, in general, is also of interest. Low-cost penetration in the region outside those two countries is only 2%, represented entirely by the non-affiliated VivaColombia airline, Mohan says.
That level of access initially drew the interest of VivaLatinAmerica's sole investor, Irelandria-founder Declan Ryan, to launch the company last year. Ryan recruited Mohan from Panama-based Copa Airlines to lead the new company.
But the company's business model and strategy has evolved significantly in the seven months since Mohan unveiled plans to launch VivaCam, a Costa Rica-based low fare carrier.
In seven Central American countries, airport taxes and fees can exceed $100 on a one-hour stage length route, wiping out VivaCam's plans to offer such flights at fares for around the same price, Mohan says.
A Central American-based airline is still within the company's five-year growth strategy, but it depends on winning relief from the region's taxes and fees.
VivaLatinAmerica instead wants to start three new airlines that can cater to a domestic market within the region, with route planning and fleet acquisition managed centrally, Mohan says. This creates a hybrid model of a domestic airline with the appeal of a flag carrier, but with some overhead costs spread across the entire organisation. Mohan listed as potential examples new airlines named VivaArgentina, VivaEcuador and VivaPeru.
Another change in the organisation's strategy since last year is the make-up of investors. Originally, VivaLatinAmerica had planned to form an umbrella organisation with Mexico's VivaAerobus, VivaColombia and the start-up VivaCam in Central America. But the investors in VivaAerobus and VivaColombia have decided to continue operating as a standalone airlines, Mohan says.
Over the five-year growth plan, VivaLatinAmerica plans to acquire up to 50 new aircraft to support all three regional carriers, Mohan says. Neither Airbus nor Boeing seem willing to offer discounts on end-of-the-line A320ceo and 737NGs, he adds, so the airline is considering re-engined A320neos and the 737 Max. Both VivaAerobus and VivaColombia operate A320s but with different engines.
Source: Cirium Dashboard
