Business Model

Since its establishment, Viva Aerobus has developed its business model based on low costs, simplicity, with a focus on profitability, innovation and a safe and secure always culture. The Company targets the Mexican market price-sensitive leisure passengers, passengers visiting friends and relatives (“VFRs”) and SMEs, with special emphasis on the bus-to-aircraft conversion market, supported by the unique, long-term strategic relationship with Grupo IAMSA which provides access to millions of bus passengers.

Ultra-low-cost model:

  • Point-to-point fares and efficient product offerings
  • Maximum seat density
  • Low distribution cost
  • High employee productivity and outsourcing to maintain a highly flexible cost structure
  • Low aircraft operating costs
  • Efficient and low-cost airport infrastructure

POINT-TO-POINT FARES AND EFFICIENT PRODUCT OFFERINGS

As of September 30, 2018, Viva Aerobus has a simple operation that consists of 101 routes, mainly domestic. By offering only point-to-point fares, the Company is able to price each flight based on its own demand, contributing to costs reduction. Additionally, The Company has a wide and efficient portfolio of in-flight products and services, avoiding more complex and expensive offerings such as inter-airline agreements.

MAXIMUM SEAT DENSITY

In order to maintain low net costs, all costs related to the specific operation of each channel are directly transferred to the customer through a booking fee aimed at keeping low net costs.

LOW DISTRIBUTION COST

Viva Aerobus offers a wide range of distribution channels to meet the needs of different customer segments specific to the Mexican market, however, for each operated channel, all the costs related to it are directly transferred to the customer through the payment of a booking fee aimed at maintaining low net costs.

The Company use its website, www.vivaaerobus.com, as its main distribution channel, since this is the lowest cost channel for the Company and its customers; enabling the latter to purchase tickets and services without paying additional booking fees, in contrast to making their transactions at bus stations, airports and through call centers.

Passengers purchasing tickets through Viva Aerobus’ outsourced call center, airport ticket offices or for charter flights pay fees that generate additional ancillary revenue. The Company also distributes tickets through both traditional and online travel agents. However, Viva Aerobus avoids costs by having travel agencies book directly through the official website and requires prepayment to avoid costs related to credit, collections and industry payment schemes.