Mexicana De Aviación: Pros And Cons

The Mexican government revealed its intentions last week to establish a fresh national airline under the oversight of the Army. This upcoming airline, named Mexicana de Aviación, is set to commence its operations in December. However, the announcement has sparked significant concerns within the industry. In the subsequent analysis, we will examine the pros and cons associated with this new startup. The new Mexicana de Aviación is an interesting project. It will employ a fleet of ten Boeing 737-800s, which will be leased and will start arriving in the country next month. The government aims to promote air connectivity across the country and give more flights to the Felipe Ángeles International Airport project in Mexico City. One of the strongest features of the new State carrier is its brand. The Mexicana de Aviación brand is still widely recognized across the country. Mexicana de Aviación was Mexico’s oldest airline, ceasing operations in 2010 after a gruesome bankruptcy downfall. Therefore, reviving the brand is a good decision. Mexico needs a stronger regional aviation market. Following the collapse of Aeromar in February, the market is up for grabs. Current regional airlines, such as TAR and Aerus, are not positioned to seize this opportunity (at the moment, because both have plenty of growth ahead); therefore, a new State-run company could improve regional connectivity. The problem is Mexicana de Aviación will not start as a regional airline despite the government's promises. Looking at the cons of Mexicana de Aviación At least on paper, it is far easier to write about the cons of the new State carrier because they are so obvious at first sight. The airline was first announced as the government’s response to the lack of air connectivity in certain parts of the country. With that in mind, Mexicana de Aviación was supposed to give services to small regional airports connecting them with Mexico City. That idea was good, and we see plenty of examples of governments subsidizing air connectivity in non-profitable markets that still require airlines to serve them. But the first 20 routes announced by Mexicana de Aviación are all but regional. These routes are, instead, the same ones that are currently operated by Mexico’s top three, Volaris, Viva Aerobus, and Aeromexico. The destinations are Cancun (CUN), Monterrey (MTY), Guadalajara (GDL), Tijuana (TIJ), Campeche (CPE), Chetumal (CTM), Mérida (MID), Puerto Vallarta (PVR), Zihuatanejo (ZIH), Cozumel (CZM), San José del Cabo (SJD), Hermosillo (HMO), Ciudad Juárez (CJS), Villahermosa (VSA), Huatulco (HUX), Oaxaca (OAX), Acapulco (ACA), Mazatlán (MZT), La Paz (LAP), and León (BJX). These 20 routes have 1,751 weekly flights and over 310,000 seats available from Mexico City’s three airports (MEX, NLU, and TLC) as of August 2023. These routes are definitely not underserved. Mexico City-Cancun, for instance, has 324 weekly flights, the most of the bunch. The destinations with the fewest weekly flights are Campeche and Cozumel, with 13 each. So, how would Mexicana de Aviación be able to crack these well-served markets? The possibility of the State subsidizing the new airline is troublesome at best. During last week’s press conference, the government said Mexicana would be able to offer fares 20% cheaper than its commercial counterparts. The government’s idea to provide more connectivity through an Army-run company could easily backfire if subsidizing Mexicana economically harms the privately run airlines. Future connectivity In the future, Mexicana de Aviación could offer flights to other destinations such as Apodaca, Tulum, Ciudad Ixtepec, Ciudad Victoria, Nuevo Laredo, Ciudad del Carmen, Ciudad Obregón, Loreto, Palenque, Nogales, Puebla, Tamuín, Uruapan, Matamoros, Colima, and Guaymas. These destinations are aligned with Mexicana’s original promise to offer more regional connectivity. So, why is the new Mexicana not starting operations flying these routes? Still, operating a 180-seat Boeing 787-800 on these regional routes could also prove problematic. These destinations would be better served with a regional turboprop. Conclusion There’s plenty to be worried about in the new Mexicana de Aviación. Depending on how it is administered, it could prove ineffective in improving Mexico’s regional connectivity and, instead, impact the current privately-run airlines.

No results