Mexico’s Commercial Airlines Expand

By Arturo Chretín

• Aeromexico Group (Aeromexico & Aeromexico Connect) led the market with 35.81% share, followed by Interjet and Volaris.
• United, American and Delta Airlines are strong in international service passenger traffic by foreign air carriers with service to Mexico.
• Aeromexico will renew its regional fleet; Volaris will focus on the international market and Interjet may offer shares at the Mexican Stock Exchange.
• “Quinta Libertad” was not approved in order to protect national airlines.

Price Waterhouse Coopers (pwc) recently published that there are strong signs that in the next decade, the commercial aviation industry may not only have many more jets and air travelers—but also more industry players. China is on an aggressive course to build a world-class commercial aviation manufacturing base.

On this report, PWC states: “Mexico continues as an important supplier to the North American industry. Cross-border partnerships further enmesh global players”.

According to the National Chamber for Aerotransport (Canaero as per its acronym in Spanish), during the last 13 years, the traffic and passenger flow in Mexico increased by 63%. Commercial aviation has had an excellent record in matters of safety during the last 20 years, as no accidents during commercial flights have been registered since 1988. In a little more than two decades, more than 250 million passengers have flown with Mexican airlines, and the safety levels helped the growth of both commercial and private aviation in Mexico.

Mexico enjoys a competitive aviation market in Latin America, according to an “El Financiero” report; VivaAerobus is the most competitive airline in Mexico, while Aeromexico is offering better connections from Mexico to the world.

As Mexico´s aviation industry continues to evolve in the post-deregulation era, the country’s largest carriers are working to entrench themselves in their respective business models. With Aeromexico clearly in first place as the country’s full-service carrier and Viva Aerobus and Volaris adopting more ultra-low-cost strategies, Interjet is assuming the role of Mexico’s hybrid carrier – touting both a more upscale product and lower costs. The other national airlines are Aeromar, Magnicharters and Transportes Aéreos Regionales (TAR) along with Aerocalafia.

The Secretariat of Communications and Transportation (SCT) stated several times that Mexico has one of the most modern aircraft fleet for passenger safety, complemented by highly trained air traffic controllers.

Beginning in June 2015, Aeromexico´ s CEO Andres Conesa, will be the next president of the Guild of Global Airlines (IATA). The enterprise has bases in Geneva (Switzerland) and Montreal (Canada). Fernando Flores, CEO of Aeromar, remains as the President of the National Chamber of Air Transportation.

Exhibit 1 shows that during the first five months of 2015 (January–May), Interjet and Volaris led the market share of the National Airlines in the Mexican Market in regard to passengers with 6.9 million each out of a total of 14.2 million. This represents 24.47% and 23.86 %, respectively. But if we take the overall Aeromexico Group (Aeromexico with Aeromexico Connect), together they enjoyed 35.81% of the market.

Alejandro Bravo is a Partner for Transport and Logistics Industries of KPMG in Mexico. He published the following: “The airline industry in Mexico has been growing in recent years, and based on analyzed data, it is expected to continue its growth in the years to come. As for the fleet, Mexican companies have done their homework and most of them have done their part to modernize their fleet.”

Aeromexico will decide this year its strategy to replace its entire fleet of regional Embraer jets. Andres Conesa, CEO of the company said. "We are including in the analysis the new Embraer E-Jet, the Bombardier C Series, and a pair of turboprops to see if it makes sense to operate in some new markets in Mexico," Conesa said.

Some of the options contemplated include the models turboprop ATR and Bombardier Q400. "We're starting to think about what will be our regional fleet for the next 10 years," said the manager. According to Conesa, updates would be a combination of purchases and leases.


The Mexican airline Interjet could resume this year 2015 their plans to enter the Mexican Stock Exchange and launch an IPO share offering. According to its CEO, José Luis Garza, Interjet has a fleet of 51 aircraft, 39 Airbus A320 NEO and 12 Superjet 100s.

Enrique Beltranena, CEO of Volaris, reported that the company will focus in 2015 on the international market, with the objective to grow its routes up to 34 percent.

The Secretary of Communications and Transport, Gerardo Ruiz Esparza noted that Mexico will not open its domestic routes or international flight stop overs to foreign airlines because even tough Mexico seeks to promote tourism and give more options to passengers, it is also necessary to protect the national airlines. He noted that during the review of the Bilateral Air Transport Agreement between the aeronautical authorities of Mexico and the United States what is sought is that national and US airlines complement each other to offer more routes and frequencies to travelers.


Initially the Secretariat of Communications and Transportation (SCT) sought to implement “Quinta Libertad”, where a US airline could get to Mexico, pick up passengers and continue towards any nation in Central and South America for example. But the main Mexican “Unions” of aviation stopped a greater openness in the sector through revisions to the bilateral aviation agreement with the United States.
Given this scenario, the Association of Airline Pilots (ASPA) and the Flight Attendants of Mexico (ASSA) noted that this openness would endanger Mexican companies. Francisco Gomez Ortigoza, Technical Secretary and Foreign Affairs of the ASPA, exemplified in this way the powerful US airlines could follow their flights from the country to Rio de Janeiro Brazil, being unfair competition for companies such as Aeromexico that already operate that route.
The aviation unions sought support of the Mexican Senate and with the aid of protests in the Mexico City airport they got their way.
Thus, in the last table of negotiation between Mexico and the US the point of allowing “Quinta Libertad” was removed and only the “Tercera and Cuarta Libertad” survived allowing unlimited international routes of US airlines into Mexico. As a result, ASPA claimed that it was successful updating the agreement, since domestic aviation and its employees were protected.

Exhibit 2 illustrates the international service passenger traffic by foreign air carriers. United, American Airlines and Delta Airlines remain at the top of the data recorded during the month of May of 2015, with 335,200; 280,300 and 215,100 respectively.