Mexico’s “ultra-low cost” airline files for US IPO

After Colombia’s Grupo Aval last week and Peru’s Graña y Montero earlier this week, it’s the turn of Volaris Aviation, the Mexican budget airline, to make its way to Wall Street on Thursday.

The company, which describes itself as an “ultra-low-cost carrier” (ULCC), filed with the SEC to raise $100m in an initial public offering.

Read the full filing here.

The offering will be a dual listing, with American Depository Shares (ADSs) to be traded on the New York Stock Exchange and A shares traded on the Mexican Stock Exchange.

Deutsche Bank, Morgan Stanley and UBS Investment Bank are the joint bookrunners on the deal. No pricing terms were disclosed.

Volaris which started operations in 2006 with four planes and five routes, now operates 80 routes via 43 aircrafts. It currently operates up to 220 daily flights between Mexico and the US. The ten cities that it serves in the US are home to some of the most populous Mexican communities, according to its prospectus.

We primarily target VFR (passengers who are visiting friends and relatives), cost-conscious business people and leisure travelers in Mexico and the United States. We believe these people represent the highest potential for growth in our target markets. By offering low promotional fares, we stimulate demand for VFR and leisure travel, and attract new customers, including those who previously may have only traveled by bus.

The airline reported net profit of $16.4m on revenue of $946m for 2012.