Tuesday 6 June 2023

Volaris CEO Announces Growth Freeze In Costa Rica

The executive cited the aeronautical authority loss of the the country category to the US, tax increases, the highest fuel cost in the region and now the planned increase in Juan Santa airport fees among the reasons to freeze growth in Costa Rica

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Enrique Beltranena, founder and president of the low-cost carrier, Volaris, published on Linkedin announcing the decision to freeze growth in Costa Rica.

This is what he wrote: “In #CostaRica the aeronautical authority lost the country category to the US, tax increases, the highest fuel cost in the region and now the planned increase in Juan Santa airport fees …  making it unfeasible for any airline to develop local aviation. In @viajaVolaris we are evaluating the situation very carefully. Meanwhile, our decision is to freeze the growth of the airline in #CostaRica.”

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The Volaris CEO referred to an increase in the rates of the Juan Santamaría airport by 2020, which according to this executive, will represent a 59% increase in the cost of operation in the country.

Enrique Beltranena, founder and CEO of Volaris, the Mexican low-cost airline and it’s subsidiary, Volaris Costa Rica

The director of Volaris Institutional Relations for Central America, Ronny Rodríguez, explained that the airport administrator, Aeris, circulated among the airport users a tariff proposal with strong increases for 2020.

He explained that, for example, it is intended to increase by 454% the cost for the use of the infrastructure in that terminal and by 127% the value of the service of renting a bus for the transfer of passengers between boarding gates.

For its part, the ICT (Costa Rica tourism board) said “it is gathering information to which Volaris refers. Once we know more details and analyze it we can refer to the announcement of this low-cost airline.”

This is not the first time the Mexican businessman has complained of the high operating costs in Costa Rica. During an interview in September 2018, when Volaris Costa Rica was created, Beltranena pointed out the cost of the ‘exit’ (airport) tax of US$29, which was practically equal to the US$32 airfare Volaris charged for travel in the region.

The fares between countries of Central America are above 45% and 48% than in Mexico, where Volaris is based, while the value of fuels in the region is greater between 12% and 15% than in Mexican territory, the executive pointed out one year ago.

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Despite the high costs, Beltranena explained that they remained in Central America because the region, with respect to air services, is very attractive.

A year ago, last November, the airline’s commercial director, Manuel Jaquez, spoke about the expansion plans for Costa Rica, the company’s intention to establish the hub for Central America here and that it would open direct flights to South America as well.

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