Travel collapse stirs confusion on Mexico Airlines’ traffic data

The traffic reports that Mexican airlines Volaris and VivaAerobus filed to investors in March and April don’t add up with the data they sent to the government.

In a statement to the Mexican stock exchange, Volaris reported 307,000 passengers in April—or 69% more than the total reflected in government data. For VivaAerobus, the difference was 49%. In both cases, the gaps were much bigger than the slight variances that are common.

The source of the discrepancy lies in the sudden collapse in passenger numbers because of the coronavirus pandemic. While government numbers only show customers who actually took flights, the two airlines count all booked passengers—a point that isn’t clear from their filings. That means their reports to investors included no-show passengers, complicating analysts’ efforts to gauge sales.

“I’d obviously prefer to only see flown passengers since that better allows to calculate revenue,” said Helane Becker, an analyst at Cowen & Co. “The problem here is whether the people who didn’t fly got their money back or some kind of voucher.”

Mexico isn’t the only country with such discrepancies, according to Controladora Cia Vuela de Aviacion SAB, as Volaris is officially known. And the long-term financial impact may be limited—the question becomes if and when passengers use already-booked travel.

Limiting Refunds

Volaris has sought to limit refunds by lowering its fees for passengers who want to change their reservations and providing vouchers for canceled flights. The Mexico City-based company said it has made 1.5 million changes to reservations since March.

Grupo Viva Aerobus SAB, in explaining its own discrepancies in passenger numbers, also emphasized its increased flexibility to move reservations. Like Volaris, it has handed out vouchers while granting refunds only in limited circumstances.

Grupo Aeromexico SAB’s April traffic report to the stock exchange showed passenger totals that were only 2.5% higher than government data. The airline said the difference was attributable to employees traveling for work or making use of their flying benefits, which aren’t included in the company’s reports to the government.

Aerolineas ABC, known as Interjet, hasn’t filed traffic reports since February. In the U.S, the largest airlines have also stopped issuing monthly traffic numbers.

March Gaps

As a public company, Volaris files monthly reports to the Mexican stock exchange. The company’s American depositary receipts have dropped 49% this year through Wednesday, comparable to the decline of a Standard & Poor’s index of major U.S. carriers. Aeromexico, which said last week it was exploring options to restructure its financial commitments, has dropped 58%.

VivaAerobus isn’t listed but has issued bonds that also require the monthly traffic reports.

Wider discrepancies could also be found in the March reports. Volaris told investors it had 299,243 more passengers than what was reflected in government data, a difference of 24%. VivaAerobus had a 21% gap. The airlines’ reports for January and February showed variances of less than 6%.

The coronavirus pandemic forced airlines to ground planes as people all but stopped traveling. Across Latin America and the Caribbean, flights plummeted 93% this year through the end of April, the sharpest decline of any region outside Africa, according to the International Air Transport Association.