If there was any doubt that Mexican airline Volaris had designs on a big US presence, those have been put to rest. After announcing a couple of new routes over the last few months, Volaris has now applied for a slew of new routes covering the country. If you don’t know Volaris, that’s going to change very quickly.

As of now, Volaris flies to Guadalajara from Los Angeles, San Jose, Oakland, Chicago/Midway, and, starting March 30, Las Vegas. It also flies from LA to Zacatecas, Morelia, and Toluca (Mexico City’s secondary airport). You might remember back in October when Southwest officially launched its partnership with Volaris to feed passengers between the two networks. Now, Volaris is ready to blanket the US with its own flights, happy to feed passengers into the Southwest system. Much of this is thanks to the demise of Mexicana.

Volaris has received approval from Mexico and is now applying for approval from the US to fly the following routes:

• Chicago to Cancun, Puerto Vallarta, and Zacatecas
• Dallas/Ft Worth to Mexico City
• Fresno to Guadalajara
• LA to Aguascalientes, Cabo San Lucas, Cancun, Ixtapa/Zihuatanejo, Mazatlan, Oaxaca, and Puerto Vallarta
• Miami to Cancun
• New York to Cancun
• Oakland to Leon and Mexico City
• San Francisco to Guadalajara and Puerto Vallarta
• San Jose to Leon
• Sacramento to Cabo San Lucas, Guadalajara, Leon, and Morelia

See, I told you this was a big deal. But don’t get too excited about booking your next trip on Volaris, because these won’t start up immediately. At least, not all of them will. According to the filing, Volaris will start Fresno to Guadalajara immediately (there’s a lot of visiting family/friends traffic in that market) and those will soon be followed by Chicago to Zacatecas, LA to Aguascalientes, Oakland to Mexico City, Sacramento to Guadalajara, and San Francisco to Guadalajara. For the rest of the routes, service will “begin as warranted by commercial conditions.” I spoke with Volaris Chief Commercial Officer Holger Blankenstein and added that they “are not able to commit to dates on when we will launch some or any of these routes.

The reason Volaris is doing this all right now is because of the way the agreement between Mexico and the US works. The two countries still operate under an old-school bilateral agreement that only allows a certain number of airlines to fly each route. So Volaris has been submitting applications to the Mexican government over time and just received a lump response with approvals for all. Now, Volaris is taking those and asking the US DOT for approval as well. Volaris is stating its intentions and requesting that it be given the authority for one year on all these routes. If it doesn’t start service on all of these within a year, then the availability would just go back into the pool, I would assume.

You’ll notice that a lot of these routes are former Mexicana routes. That currently-dead airline (which continues to float rumors about a comeback some day) left open a lot of vacancies in the bilateral agreement. So Volaris is jumping on them and incorporating them into the airline’s growth strategy. Holger explained,

What we can say is that we have a significant expansion plans. We are growing fast thanks to our aggressive promos, our pre-purchase campaign, good itineraries and our on-time service. We are adding 8 aircraft in 2011, many, but not all, will be dedicated to MEX-US service. Our fleet age is 3.4 years, and currently we have 46 routes covering 25 cities. We are a very young airline that fortunately has had many early successes through a young and innovative workforce and hard work. Our main concern is to be a low-cost airline with a high quality service.

Some of these routes seem like they just want to hold a place in case the airline’s strategy shifts. For example, flying from one of the most expensive airports around, Miami, to Cancun wouldn’t seem to fit a low cost carrier model. But it’s a big route so it can’t hurt to hold a spot before someone else takes the authority. It might be worthwhile.

In the end, this will be a big expansion for Volaris. People were worried that the disappearance of miserable Mexicana would leave a vacuum between the US and Mexico. Instead, we see what we always see. A better airline is stepping into its place very quickly.

¡Viva México! The spat between the US and Mexican governments is over (surprisingly quickly), and Mexico has once again been elevated to Category 1 status by the FAA. What does that mean? Look for more flights from Mexico coming soon. In fact, Aeromexico is leading the charge.

This past summer, the FAA downgraded Mexico from Category 1 to Category 2. Why? They didn’t give details, but it’s usually because the country’s safety or security infrastructure isn’t quite up to snuff. The FAA uses this downgrade to put pressure on the country to fix the problem. What kind of pressure does it add? A lot.

When a country is downgraded to Category 2, a few really painful things happen. First, US-based airlines are not allowed to codeshare with airlines from that country. So Delta, which is in SkyTeam with Aeromexico, was not allowed to sell any codeshare flights on Aeromexico. Second, airlines based in that country are not allowed to add any new flights into the US. They can continue to fly what they have, but they can’t add anything new. That’s difficult at any time, but it was particularly difficult for Mexican airlines since Mexicana shut down in the middle of this and nobody could fill the hole.

It’s particularly frustrating because this doesn’t reflect on the airlines themselves. They could be the safest and best in the world, but as long as there’s a political spat between Mexico and the US over infrastructure, the airlines suffer. So how could concerns about a country’s infrastructure be resolved in a mere 3 or 4 months? Uh, they can’t. So there’s some crazy political backstory here, I’m sure. And the airlines (and passengers) are the hostages.

As we all know by now, Mexicana went into its death throes in August and September. When it finally shut down, that pulled a ton of capacity out between Mexico and the US and no Mexican airline could step in to fill that gap. Sure, United and American, among others in the US, added some flights from their hubs to Mexico but the Mexican airlines themselves had to sit and watch the opportunity go by. Really annoying.

Now that Mexico is once again in Category 1 status, Mexican airlines are free to expand, and codeshare as well. The Delta/Aeromexico codeshare goes back into place on December 11. Aeromexico is also permanently adding 1 new daily flight from Mexico City to New York, Miami, Chicago, Los Angeles, and Las Vegas. On January 11, the airline will add two daily flights from Mexico City to San Antonio.

Then there’s Volaris. That airline did finally get its relationship with Southwest up and running, so I would think that we could expect additional expansion soon. Right now, it’s only LA, Oakland, and San Jose in the mix. But could Chicago be far behind? Maybe Denver? Eventually, Atlanta?

And then there’s Mexicana. Though the airline has been dead for several months, efforts are underway to revive the corpse. Who knows what that will look like (if anything) at this point, but it will certainly be a lot smaller than it was.

So, stay tuned over the next few weeks as airlines look to make up for lost time here. I’m sure everyone is glad this spat is over.

[Original photo via Flickr user Omar Omar/CC 2.0]

On November 10, 2008, Southwest and a little known Mexican airline named Volaris announced that they would be joining up “to build a codeshare partnership.” It was said that details would be announced in early 2010. Well here we are in late 2010, two years after the first announcement, and the two airlines finally gave us details at Southwest’s Media Day last week. But it’s not a codeshare. It’s, uh, sort of a hybrid that’s the best the airlines can do right now.

In the last couple years, Volaris has grown up rapidly. The low cost carrier, based near Mexico City, is now the second largest airline in Mexico with 20 percent of the market in the country. It has been profitable and has some of the most impressive guarantees you’ll ever see. If your flight is more than 30 minutes late, you get a refund. Same thing if the airline loses your bag.

I’ve written about Volaris before and met with Holger Blankenstein, the Chief Commercial Officer awhile back. He was in Dallas this week along with CEO Enrique Beltranena (along with a very nice bottle of tequila for Southwest CEO Gary Kelly) to announce the first step in this partnership with Southwest. So what is this thing? It’s being called International Connect.

Starting on November 12, you can go to Southwest.com and book a flight to Mexico begining December 1 from a handful of West Coast cities.

That will slowly expand to add more cities over time, but the focus is west of Denver right now because Volaris’s US destinations (and the partnership’s connecting points) are Oakland, San Jose, and Los Angeles. In Mexico, the initial cities are Toluca (near Mexico City), Cancun, Guadalajara, Zacatecas, and Morelia with more to come later.

What you’ll see on Southwest.com will look like a regular fare display and you’ll think you’re buying a single ticket connecting on the two airlines but you’re not. What’s actually happening is that it is just combining the Southwest fare with the Volaris fare and showing it as one. When you buy a ticket, you’re actually buying two separate tickets between the two airlines. You will get a Southwest confirmation number and a Volaris confirmation number and you’ll need to check in separately for each.

So what’s the benefit? Well Southwest will now be able to check your bag all the way through to Mexico and Volaris can do the same on the return (though you have to collect your bag to go through customs and immigration anyway coming back north). Since each airline knows that you’ll be traveling on the other, the airlines can take care of you if there’s a delay. I spoke with Robby Byam, the Director of Parternships and he said that if a customer is late coming in on Volaris, Southwest will rebook that person on the next available flight and will send confirmation via email or text and meet the airplane with info. That is a big benefit. Then again, if a Volaris customer is late, they’ll be pretty happy that the flight ended up being free for them.

The Southwest guys kept floating the mantra that this is a simpler way to do things and has advantages over codeshare. The one example?

It’s more transparent – you know what airline you’re flying and not trying to figure out who is operating your codeshare flight. While I agree with that, there are a lot of other drawbacks here.

To me, this seems simple for the airline for sure, but it’s more complex for the customer. I agree about transparency and that would be just fine with me if they didn’t do a full codeshare, but I would want to see a single ticket where I only had to check in once. Whether I’m on Volaris flight 123 or Southwest flgiht 9123 (operated by Volaris), that’s not a concerne and in fact, the former might be better anyway.

But because of the limitations of Southwest’s ancient reservation system, this is the closest the airlines can come right now. So we’ll just have to take what we can get. It opens up the ability for Southwest to get its customers to Mexico more easily and in a few months, Volaris will be able to do the same for its customers via its website. That’s good.

At the end of the year, Southwest and Volaris will evaluate the partnership and decide how to expand further. Volaris will certainly be looking to see which cities send the most traffic down and that can help the airline pick its next destinations in the US. Once Volaris has gateways open in other parts of the country, it makes options with Southwest easier for people east of the Rockies.

So, is this everything I would have wanted to see here? No, but I’m just glad to see something finally happening. Being hamstrung with Southwest’s reservation system means you have to start with less than what’s ideal. I just wish Southwest could get things moving on the technology front more quickly.

Last week, I had the chance to sit down with three of the guys behind Volaris, the successful Mexican low cost carrier that is now likely to be Southwest’s first codeshare partner. Holger Blankenstein (Chief Commercial Officer), José Luís Suárez (Director of Sales), and Manuel Ambriz López (Manager of Commercial Strategy and Schedule Planning) sat with me before meeting with some folks from the LA Business Travel Association, part of the airline’s efforts to attract more of the business community.

We talked about a wide variety of things from the airline’s decision to start serving Mexico City’s main airport and yes, the Southwest partnership. Let’s get started.

Cranky: Thanks for sitting down with me today. I’d like to start with this move into Mexico City’s Benito Juarez airport instead of just flying into Toluca as has been the case so far. Can you talk more about that?

Volaris: We actually have 3 segments. We have the leisure, corporate, and small enterprise segments. Part of leisure is the visiting friends and relatives (VFR) community. Mexico City is actually for that group. We started flying from Tijuana and it gives those friends and family another option in Mexico City.

Cranky: So Mexico City is more of a spoke and not an operational base like Toluca?
Volaris: That’s right.

Cranky: Talking about Tijuana, how much traffic do you see coming across the border from the US to fly on those Tijuana flights?
Volaris: It’s about 30%. This is a non-scientific number, it’s just from our observations at the airport, but we think it’s about 30%. Of those, 80% are from Mexican ancestry, so they’re coming to visit friends and family.

Cranky: Are you helping people get across the border?
Volaris: Yes, absolutely. We have an alliance with Greyhound and with a Mexican bus company. You can depart from the Greyhound station in downtown San Diego and go straight to the airport in Tijuana.

Cranky: I imagine people do this because of the lower fares and taxes?
Volaris: Oh yes. It’s about a $100 difference in taxes.

Cranky: I know you were at least planning Oakland to Tijuana. Are you looking to turn Tijuana into a connecting point for American flying to Mexico?
Volaris: Probably not. That’s mostly origin and destination traffic. For connections, we’ll use Los Angeles, Oakland, and San Jose to connect with Southwest for now. We are developing Guadalajara and Toluca into connecting points within Mexico. Having said that, we’ll remain a low cost airline so we won’t have a huge hub. We will create key cities with great connections, but we will still remain a low cost carrier.

Cranky: That’s a similar model to what Southwest has grown up with.
Volaris: Yes, but there is a big difference. We don’t have the ability to support those large volumes with frequent flights in Mexico. Our biggest market is Guadalajara-Tijuana with up to 8 flights a day during the peak season, but there aren’t many markets that big. We can’t have that kind of frequency elsewhere. The biggest market is Monterrey-Mexico City but there’s too much competition for us there.

Cranky: You’re based in Mexico City, right? In Santa Fe?
[Note: Santa Fe is a business district on the west side of town]
Volaris: Yeah, we actually have a virtual airport in Santa Fe. You can check your bags, get your boarding pass and then board the shuttle right there. We’ll have you on the airplane within 100 minutes.

Cranky: Is it the same on the return?
Volaris: Yes, you have to pick up your bag and then hand it right there to the shuttle driver, but that’s it. The shuttle goes every 5 minutes. Benito Juarez may be closer to Santa Fe, but sometimes the drive to Toluca can be shorter because of all the traffic. Toluca is sort of like Newark for Manhattan 20 years ago.

Cranky: Let’s talk Southwest. They’ve been in the news with this WestJet deal falling apart lately. Do you have any updates on timing?
Volaris: On WestJet? No.
Cranky: Hah, no, on your timing.
Volaris: We’re going full force ahead. We started by joining websites last year and we’ve been looking at additional areas like cargo, for example. We’re going to do something very similar to codesharing by the end of this year.

Cranky: How does that work?
Volaris: It will be seamless for the customer, but it’s not a traditional codeshare.

Cranky: Is this going to actually happen on time?
Volaris: Well, there are always unforeseen problems, but we are switching to Sabre on August 21 and Southwest still has a couple of technical issues as well.

Cranky: What are you on now?
Volaris: Navitaire.
Cranky: You might want to talk to JetBlue about that and probably not WestJet

Cranky: Are you looking at other partners?
Volaris: Sure. One of our shareholders is TACA and they just merged with AVIANCA so that’s a natural fit, but we’re really focused on the US right now. We haven’t talked about anything with TACA yet.

Cranky: Let’s talk more about the US. You recently announced service to San Jose while many other airilnes are either reducing or ending service because of how expensive the airport has become with its construction projects. Why did you go in there?
Volaris: If you look at the Bay Area, look at where the Mexican population is. There is a big chunk near Oakland, east of Oakland and a whole population south of San Jose. Places like Watsonville, Salinas, and Gilroy. So we took away one Guadalajara-Oakland flight and moved it to San Jose to have more access to communities in the south.

Our core customers are of Mexican heritage visiting friends and relatives, so this is a good place. We also hope that we can attract more business travel as well being near Silicon Valley.

Cranky: How about LAX? How have things been going?
Volaris: We’re pretty happy so far. Guadalajara is really strong and Toluca is . . . good. We’re happy.

Cranky: Do you get most of your VFR traffic from travel agents?
Volaris: No, most is online in the US and it’s growing in Mexico as well. It’s all word of mouth and targeted community involvement. We’re often at parties, fiestas, in the community but we don’t do widespread marketing.

Cranky: Do you consider Aeromexico and Mexicana to be competition? I know you look to take people off of buses.
Volaris: Well, we’re in the same industry so we do compete, but we also do our own thing. We’re a young company, we’re doing good independent things. We used to compete more with them face to face but they have changed the way they structure their network a little.

Cranky: What kind of performance information do you release publicly?
Volaris: Well, we’re private and keep things close to the vest, but we can confidently say that we’re the only Mexican airline, except possibly for one small one, that was profitable last year.

Volaris brought its first flight into LAX yesterday, and I headed out to the airport for the airline’s press conference celebrating the event. I must admit that I liked a lot of what I heard about Volaris, but these are some incredibly uncertain times for the airline right now.

Volaris is now flying a single daily trip from LAX to Toluca (outside Mexico City) and another one to Guadalajara. They’ll be starting flights to those cities from Oakland as well, and at the press conference yesterday, Volaris Managing Director and CEO Enrique Beltranena (bottom left in the picture, though I’ll certainly understand if you’re distracted by those flight attendants) announced that they had just received approval to fly from Oakland to Tijuana as well. He also said that he expects Volaris to be flying to more than 10 cities in the US in the next two and a half years. So this is no small plan.

How the heck are they planning on being the first successful low cost carrier flying between the US and Mexico? A huge part of the plan is the Southwest codeshare that was announced earlier. In fact, it’s such a large part of the plan that Kyle O’Neil, Southwest’s Director of Alliances (the tall, white dude in the middle of the picture) was there at the podium today for the event.

Of course, the question on my mind was whether or not the codeshare was still proceeding as planned, especially considering that the WestJet deal had been delayed. So, I asked them to elaborate on details. Kyle said that Southwest was still planning to launch the codeshare in 2010, but he couldn’t announce a date. Original plans were for the codeshare to go on sale in early 2010, so this looks like there might be a little slippage in my mind. But Kyle reiterated that they were very committed to the partnership, something that was evident by his mere presence at the event.

For Volaris, I imagine the codeshare can’t start soon enough. They are coming off a disastrous traffic plunge in Mexico following the swine flu outbreak that began in April. Enrique admitted that Volaris has been suffering, but he said that he believes Volaris was the only airline in Mexico to be breakeven over the last six months. (Warning: He answered that question in Spanish, so I’m trusting that my Spanish skills haven’t failed me.)

In the end, Enrique presented a very nice plaque (at left) to LAX commemorating the start of their service. He said that they’ve presented this to each city they fly as a symbol that they intend to be there for a long time. I like the symbolism.

So Volaris is pushing ahead, and LAX is a huge part of their commitment to making flying in the US work. They will be flying out of Terminal 2 here at LAX (convenient since Northwest flights all moved to Delta’s terminal yesterday), and while it’s not going to provide connections behind security to Southwest, it will at least be right next door.

What might you expect to see onboard? If you’re looking for legroom, you won’t find much. I’m told their A319s are equipped with 144 seats while the A320s have 172. For comparison, JetBlue’s spacious configuration has only 150 seats on an A320, but I think Volaris’ configuration makes sense for the airline. They do have leather seats and overhead TV screens, so the product is still quite nice. (You can see a photo of the inside of their aircraft on airliners.net.)

Perhaps the most interesting thing offered by Volaris is unique in this industry. As Enrique said (to many laughs), “We guarantee on-time performance or your money back so I hope your airport delivers.” That’s right. If your flight is late by more than 30 minutes, you get your money back, regardless of the reason for the delay. As a marketing campaign, I love this idea. It will certainly stand out and it’s a huge differentiator. On the other hand, remember why Domino’s dropped their 30 minute guarantee? They had drivers getting in accidents because they were rushing to beat the deadline. I really hope we don’t see any pressure on pilots to beat the deadline here. That makes me a little nervous.

Overall, it was a good event at LAX. Enrique seems like a very smart man, and he’s already built an airline that not only has to be the frontrunner of the low cost carriers in Mexico, but is also a great place to work. In fact, the biggest smile I saw from him all day was the one he let out when he was introduced as leading an airline that has been recognized as one of the top places to work in Mexico.

Would I try them if I were heading down to Mexico? Absolutely. And the low fares that they’re trying to bring into the market should help them stimulate additional traffic, assuming the burdensome taxes don’t overwhelm their efforts. I tend to think this can work, but this is not exactly the ideal time to be trying it. Still, they pushing ahead at full speed.

So what’s next for Volaris? Well, there was some pressure from LA officials for the airline to start service to Ontario as well (which is operated by the same folks that run LAX), but Enrique responded that “there is nothing more we would like to do than start service to Ontario. So if we are able to, and you are able to reduce the cost of the airport . . . .” Ah, smart man. Keep an eye on these guys, and if you have the chance to fly them, let me know your impressions.