Interjet Executive President Miguel Aleman Magnani said the Mexican airline is studying an initial public offering for 2014 and the sale may exceed this year’s IPO by rival low-cost carrier Volaris.
Interjet, operated by ABC Aerolineas SA, may sell a stake of at least 30 percent in the U.S. and Mexico in the latter half of next year, Aleman Magnani said in an interview. The airline, Mexico’s second-largest by domestic passengers, would use the proceeds for plane deliveries and to pay debt, he said.
The plan comes at a time when Mexican airlines are placing record jet orders as air passenger traffic rises to an all-time high. An IPO would make Interjet the third publicly-traded airline in Mexico after Grupo Aeromexico SAB (AEROMEX*) and Volaris, the brand of Controladora Vuela Compania de Aviacion SAB.
“We’re expanding,” Aleman Magnani said in Mexico City. “It’s going to be good timing because the Mexican economy looks very positive starting next year.”
Interjet’s market value after an IPO may be “a little more” than Volaris because Interjet has slightly higher profit margins, Aleman Magnani said.
Volaris rose 2.7 percent to 18.69 pesos at 10:57 a.m. in Mexico City. The shares climbed 17 percent through yesterday since its offering in September, when it raised $398 million including the underwriters’ option to sell additional shares. The Mexico City-based company’s market capitalization yesterday stood at 18.4 billion pesos ($1.4 billion), or 45 percent higher than that of Aeromexico, the nation’s largest carrier.
Aeromexico gained 1.2 percent to 17.98 pesos today.
Interjet has yet to hire bankers to handle its IPO, Aleman Magnani said. The company hired Grupo Financiero Banorte SAB and JPMorgan Chase & Co. to manage an IPO in 2011 before deciding not to sell shares.
The Aleman family owns about 95 percent of Interjet and will only sell shares if it sees conditions as favorable, Aleman Magnani said. His father, Interjet Chairman Miguel Aleman Velasco, is the former governor of the Gulf Coast state of Veracruz and the son of a former president of Mexico.
Mexico’s airline passengers reached a record 56.8 million last year after expanding 8.3 percent, the fastest pace since 2007, according to the Ministry of Communications and Transportation. Passengers climbed 7.9 percent during the first 10 months of this year compared with the same period a year earlier.
Interjet handled 6.14 million domestic passengers from January through October this year, compared with 5.81 million for Volaris and 8.93 million for Aeromexico. Including international service, Volaris had 6.97 million passengers to Interjet’s 6.9 million. Aeromexico carried 12.6 million total passengers.
Interjet has been pleasantly surprised by the reliability of the Superjet 100 regional plane, a Russian-built aircraft made by United Aircraft Corp.’s Sukhoi unit and Italy’s Finmeccanica SpA, Aleman Magnani said.
The Mexican airline’s three Superjets have flown about 750 commercial flights so far and are being utilized about 11 hours a day, meeting Interjet’s plan, Chief Executive Officer Jose Luis Garza said. It’s relying on the plane to connect Mexico City with nine mid-density destinations while using its fleet of Airbus SAS A320 single-aisle jets on busier routes.
The Superjet’s technical dispatch reliability is 99 percent, he said.
“Normally you go through a learning curve. We are already there,” he said. “The pilots already put a nickname on the aircraft, they call it the little tank.”
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