AIFA and lack of market analysis ‘stuck’ Mexicana’s takeoff • Forbes México

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The Mexican state airline would be under restructuring and redesign due to failure to meet expectations due to low passenger demand, according to sources consulted by Forbes Mexico.

The firm operated by the armed forces announced that as of this Monday it would stop operating eight of the 20 routes with which it took off in December 2023.

The company operates mainly at the Felipe Ángeles International Airport (AIFA), which also does not register a large number of travelers compared to other airport terminals.

Fernando Gómez Suárez, a specialist in aeronautics issues, said that the main “ballast” of the airline is the AIFA, since to promote the terminal Mexicana flights were placed at that airport, which caused it to not be as attractive.

“In reality, this is also a burden to be able to grow the airline, since the lack of effective connectivity of the AIFA prevents the passenger from choosing Mexicana,” he commented.

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The airline has been assigned public resources of just over 138 million pesos, with the 2024 budget being the highest, as it was 119 million pesos, while for 2025 it barely exceeded 19 million.

The government of President Andrés Manuel López Obrador spent 815 million pesos to acquire the brand and name of the company that stopped operating in 2010, according to information from the Ministry of the Interior.

The president of the Association of Retirees and Former Mexican Aviation Workers, Fausto Guerrero Díaz, commented that AIFA is an airport with “few opportunities,” and that this “disincentivizes” the use of the airline.

“It’s walking, so the airport has increased its passenger flow, but you have to give it time,” he added.

He pointed out that in 2010, when Mexicana de Aviación went bankrupt, the airlines Interjet and Volaris, which decided to operate from the Mexico City International Airport (AICM), grew 75% and 55% respectively, since their operations took place in a terminal with high travel demand.

“These airlines were not created overnight, until Mexicana leaves the market, these companies resume growth from the AICM,” Guerrero Díaz recalled.

“Mexicana does not depend on good intentions, it is also important to see where it takes off and where the service is promoted,” he added.

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However, he assured that he sees the AIFA as a “wonderful” airport, since it is a terminal that is not “improvised”, like the AICM, where there is a problem for passengers, airlines and people who live nearby.

“We would have to be patient and let this terminal grow in parallel with the airlines,” he mentioned.

However, he mentioned that the AIFA presents problems, such as the way for passengers to arrive or expensive taxis, although he highlighted that there is an effort to improve communication routes, although there is a need for more means of connection.

“I think that if given time it will have a good future,” he said.

Few aircraft and low demand

Gómez Suárez said that the airline’s announcement is an indication that it is going to “readjust” its flights, given that the canceled routes are not “working” for it, since demand is concentrated in other regions and in addition there would be no supply have a small fleet.

“Today it readjusts to profitable routes. But the objective of the company is to serve a market with low purchasing power, but above all to communicate and open routes that are not served, but good intentions are not enough. “Until now, the airline needs to have more planes to handle the connectivity that could occur when there is a cancellation or delay, so that the passenger has options to reach their destination,” he stated.

“There are still 5 (planes) left to reach them,” he added.

Read: Mexicana de Aviación announces that it will stop operating 8 routes starting January 6

Mexicana began operations at the end of 2023 and after a year of flights, the operation of those routes were not profitable. The expert commented that it happened “precisely” because the company did not carry out market studies prior to the relaunch of the airline.

“There are routes where there will always be a market, such as Mexico-Tijuana or Mexico-Cancún,” he commented.

The government seeks to offer low prices to reach people who cannot afford a ticket on private airlines.

Israel García, a Mexicana user, said that flights to Cancun usually cost an average of 800 to 900 pesos, compared to up to 3,000 pesos that he previously paid on private airlines, although the flights are not fully booked.

“It’s not like we benefit much from 20% less in the cost of flights compared to other airlines, since it is subsidized with public resources,” laments specialist Gómez Suárez.

He pointed out that the issue is that the government continues to “not hit” the correct formula for the company to cover its expenses, since the high costs of the sector make it impossible for the airline to “breathe” comfortably.

However, Gómez Suárez hopes that the company will do well in 2025, and that its viability will be analyzed.

“Operating with five planes is not the same as operating with 10. As well as with the number of personnel. The administration of the company must be made more efficient. If you have a payroll to serve a large fleet but in reality you have fewer planes, there is a financial problem too,” he commented.

He mentioned that the price of jet fuel, the fuel used by aircraft, will end up affecting the company if it “continues to increase,” as it represents 30% of an airline’s costs.

Although part of that expense can be transferred to the final consumer, it will not be enough if Mexicana does not have enough customers.

At the end of last year, Leobardo Ávila Bojórquez, director of Mexicana, announced that new routes were being analyzed for the airline, as well as plans to expand the fleet.

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The official mentioned that the airline is expected to be able to transport more than 5.5 million passengers in the medium term.

On December 26, Ávila Bojórquez reported that the airline had transported 382,011 passengers in one year of operations, about 13% of its goal of 3 million annually set for 2027.

In addition, he announced the arrival of five new Embraer aircraft from Brazil by 2025.

The airline company, with an initial investment of 4,000 million pesos, started with three of its own Boeing 737-800 aircraft and two rented Embraer, with the promise of renting five more in the first two months of 2024 and the manufacture of Boeing aircraft.

In its first year of operations, the airline had 7,217 operations to and from AIFA, which AMLO inaugurated in 2022 for the Mexican capital, which was equivalent to 9,637 flight hours and more than 6 million kilometers traveled, but less than 1 % of market share.

The five most requested routes have been Tijuana, Tulum, Mérida, Ixtepec and Ciudad Victoria, all from AIFA.

With information from EFE

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