Mexico City Juarez International Airport

Aeromexico continues to build partnerships outside SkyTeam

Aeromexico’s new codeshare agreement with Brazilian carrier TAM represents the second agreement Mexico’s largest carrier has signed with a non-SkyTeam carrier in the last two months. The partnerships reflect the need for both Star and SkyTeam carriers to access key markets in Latin and Central America that are not available through their respective alliance partners.

The Avianca-TACA relationship with Aeromexico, announced in Mar-2012, was surprising given that the Kriete family, which is a main shareholder in Avianca-TACA, is also a major holder in Aeromexico’s competitor Volaris. But Aeromexico has been pursuing a tie-up with Colombia’s largest carrier, Avianca, since it started Mexico City-Bogota flights in 2010. The chance was brushed aside once Avianca-TACA opted to join the Star Alliance, but now the agreement will include more connections than just Bogota as Avianca-TACA cited an ability to partner with Aeromexico on flights to Central and South America during the second half of this year.

Houston airport operator envisions Hobby offering international flights in 12 markets

Studies carried out on behalf of the Houston Airport System (HAS) to examine the viability of international flights from Houston Hobby airport contemplate a two-phased introduction of 12 markets to Mexico and Central America. Southwest Airlines is pushing for facilities at Hobby to support international flights, but research conducted shows that Mexican low cost carriers VivaAerobus and Volaris would also have an interest to operate international service from Hobby. It is not surprising United has mounted vehement opposition to Southwest’s campaign, as it enjoys majority carrier status in most of those markets with its service offerings from Houston Intercontinental Airport.

Earlier this year Southwest asked Houston Airport System (HAS) to conduct a feasibility study for the addition of a five-gate terminal at Houston Hobby Airport to support international flights. Houston is Southwest’s sixth largest city based on daily departures, and the city’s geographical location makes it an ideal destination for short-haul international flights to Mexico and Central and South America. Data in the study conducted on behalf of HAS show that Houston was the point of entry for 64% of Mexican visitors travelling by air to the US in 2010. Through its acquisition of AirTran, previously domestic-only Southwest is gaining knowledge of international operations now that it is managing AirTran’s network, which includes flights to the Caribbean and Central America.

Spirit Airlines marks milestone with Dallas-Toluca flights

Spirit Airlines will mark a milestone in Jun-2012 when it introduces flights from its growing base at Dallas Fort Worth International Airport to Toluca, Mexico. Currently most of Spirit’s international flying is operated from its Fort Lauderdale headquarters, as part of a strategy the carrier adopted during the middle of the last decade to build the airport as an alternative gateway to Miami for service to Latin America and the Caribbean.

Part of Spirit’s tactics included offering lower fares to those destinations than American Airlines, which remains the dominant carrier in Miami. Spirit for many years had a singular focus on penetrating central America, northern Latin America and the Caribbean to capture the significant volumes of visiting, friends and relatives traffic (VFR) that transited to southern Florida, and now offers flights to roughly 25 international destinations from Fort Lauderdale. It adopted a no-frills model that allowed it to offer appealing low fares to that passenger segment and co-exist with American in the Miami metropolitan market.

Mexico City ponders a second airport, again

Mexico City International Airport’s Director General Hector Velazquez, speaking at an event last week in Mexico organised by IATA and Latin American airline association ALTA, stated that in his opinion it is necessary to construct a second airport in Mexico City as current operations at the existing one are "saturated". The original proposal dates back to the late 1990s but ran into political difficulties.

The scale of Mexican aviation is considerable. It has the second largest share of available airline seat capacity in Latin America, after Brazil. But the Mexican industry has not growing nearly as fast as Brazil or other major emerging markets. In fact the Mexican market has shrunk in size in recent years.

Domestic passenger traffic in Mexico has decreased by 8% over the last four years from 27.6 million passengers in 2008 to 25.5 million passengers in 2011 while international traffic has dropped during this period by 1% from 25.7 million passengers in 2008 to 25.3 million passengers in 2011. As the most popular airport in Mexico, Mexico City International was still able to grow its traffic between 2008 and 2011 but only by a paltry 0.6% from 26.2 million passengers in 2008 to 26.4 million passengers in 2011.

Mexican LCCs Interjet, Volaris and VivaAerobus plan more rapid growth for 2012

Mexico’s three low-cost carriers are planning another year of rapid growth as they continue to benefit from the 2010 collapse of Grupo Mexicana. Interjet, Volaris and VivaAerobus saw their combined domestic passenger traffic grow by 41% in 2011 to 13.8 million passengers. Their international operations expanded even faster last year albeit on a very small base, recording 91% growth to 1.2 million passengers. More rapid growth is expected across both the domestic and international networks as the Mexico’s LCC trio plans to take delivery of 17 additional aircraft in 2012, representing 20% growth and resulting in a combined LCC fleet of 101 aircraft.

The LCC penetration rate in Mexico’s dynamic domestic market reached 54% in 2011, compared to 50% in 2010. The total domestic market grew by 4% in 2011 to 25.455 million passengers, which is still 8% below the peak of 2008 when Mexican carriers transported 27.649 million domestic passengers. But the fact Mexico has been able to grow at all the last two years (in 2010 growth was under 1%) is quite an achievement given the sudden collapse in Aug-2010 of Mexicana, which had about a 28% share of the domestic market.

A year after Mexicana's exit, Aeromexico, Mexican LCCs and US carriers are main beneficiaries

One year after the suspension of services at Grupo Mexicana, which became the largest airline casualty since the onset of the global financial crisis, it appears the Mexican market has fully recovered. Mexico’s remaining carriers have been able to quickly absorb Mexicana’s approximately 27% of the domestic market. US carriers have so far been the largest beneficiaries of Mexicana’s demise in the international market but Mexico’s remaining carriers are eager to start narrowing the very wide gap with their foreign competitors.