Viva, the airline brand backed by the family of the late Tony Ryan is embarking on a major expansion drive in Central and South America.
The group, which already operates low-cost Mexican carrier VivaAerobus and Columbian airline VivaColombia, is setting up a multinational holding company in Panama called Grupa Viva.
The new entity will oversee the expansion of the Viva brand beyond its current operations. The group is understood to be eyeing opportunities in Costa Rica, Peru and Ecuador, where long-established monopolies still hold sway and fares remain high relative to average incomes.
To facilitate the expansion, the group recently ordered 52 new Airbus A320 aircraft which it plans to deploy between operations in the region.
Largest order
The order was valued at close to $5 billion at list prices, which is before negotiated discounts, making it the single largest aviation order in
Latin American
history.
The Ryan family's Irelandia Aviation, led by Declan Ryan, son of Ryanair founder Tony Ryan, specialises in developing low-cost airlines based on the Ryanair model.
It jointly owns the Viva airline brand with Mexican bus company IAMSA.
The group dramatically pulled its planned €165 million flotation of Mexico’s VivaAerobus earlier this year, citing emerging market volatility. The IPO prospectus noted that prior carriers backed by Irelandia Aviation generated average returns of 22 per cent after their initial share offerings.
Opportunities
“In terms of the opportunity in
Latin America
we, in Irelandia, are very excited about the future development of the Viva brand throughout the region and believe that there is enormous potential to develop and grow the air travel markets there,” Irelandia Aviation senior partner
John Goode
said.
He said air travel was “significantly underdeveloped” in Latin America with a trips per capita ratio of less than 0.3, which means that on average less than 30 per cent of people take a flight each year.
“We believe the principal reason for this is the lack of affordability in Latin America because of the high fares charged by existing airlines and that bringing our low-cost model to these markets together with the continued economic growth and development of the middle classes there will combine to stimulate significant growth in air travel.”
