Since its founding 13 years ago, the ultralow-cost carrier (ULCC) Volaris has grown into the second-largest Mexican airline. Volaris flies 61 U.S. routes to 29 U.S. destinations and is gearing up to begin codesharing with U.S. ULCC Frontier. Airlines editor Robert Silk spoke last week with Volaris CEO and founder Enrique Beltranena about the carrier's offerings and about what it can offer the U.S. leisure market.Q: Let's start with the basics. A lot of U.S. travel agents don't know much about Volaris. Why should they and their clients give you a shot?
A: I think the first thing is because of the price; I think altogether they will get a lower price. The second thing is reliability. You get a reliable product. The third thing is you do get a good product onboard. And the fourth thing is you get more connectivity into Mexico. We fly to practically every important city in Mexico. I cannot think of any important city in Mexico where we are not.
Q: Even more connectivity than the Delta/Aeromexico joint venture offers?
A: We are a point-to-point carrier. In their case, you have to connect more. On Delta, you usually have to fly to Atlanta, for example, and then into some city in Mexico.
Q: Other than low prices, tell our readers what the strengths of Volaris are?
A: It's pretty comfortable. Volaris has the youngest fleet in the Americas. It flies Airbus A320s. It's a single cabin with 29 inches of seat pitch. And the rest is basically standard. You get good service onboard. If you want food, you need to pay for it. Versus the legacies, in general, we are 30-40% below in fares. 80% of the time I am 30-35% below the legacy's fares, including ancillaries.
Q: Does the seat recline?
A: We do have a minimal recline.
Q: Your biggest source of customers by far is the family market -- people visiting friends and relatives. What steps are you taking to increase your leisure traveler share?
A: When we opened routes last year, we did a lot of leisure markets. For example, Los Angeles to Zacatecas and Chicago to Zihuatanejo.
Q: Who are you primarily fighting for share against? Is it VivaAerobus and Interjet, or is it also the U.S. ULCCs. What about the full-service carriers, especially the Delta/Aeromexico joint venture?
A: When it comes to airlines, it is Aeromexico and American and United. When it comes to traffic that is close to the border, it is the buses.
Q: Aeromexico just introduced no-frills basic economy fares, and Delta is expanding the number of Mexico flights on which it sells basic economy. How will Volaris respond? Are you determined to keep prices lower than those carriers?
A: It concerns us because it is much more direct competition. But you have to understand the unit-cost differential with Aeromexico is more than 36%. When you compare costs with the U.S. mainline carriers it is 50%. So our ability to reduce costs is much greater.
Q: Will you always win on price?
A: If it's necessary, yes.
Q: In January, you announced that you would codeshare with Frontier. Codesharing between ULCCs is unusual, though Frontier owner Indigo Partners is also a major Volaris shareholder. How will consumers benefit from this deal?
A: The legacy carriers in markets that are common to places where we are flying tend to reduce the fare on the first leg but then increase the fare on the smaller markets. I think the combination of two ultralow-cost carriers with two ultralow-cost prices will end up being, when you add up the segments, a much lower price.
Q: Have you determined how many routes will be part of the initial codeshare and the specific date when it will begin?
A: The process in Mexico has been approved. We are in the process of finishing the filing with the Department of Transportation. There is very little overlap between us and Frontier. We think we could get approval still by this summer.