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- Paseo de la Reforma 445
Mexico City, D.F., Col. Cuauhtémoc
- Main hub
- Mexico City Juarez International Airport
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- Full Service Carrier
- Domestic | International
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Wholly-owned by Grupo Financiero Banamex, Aeromexico is based in Mexico City and operates an extensive regional network within Central and South America, as well as to Asia, North America and Europe. Aeromexico, together with subsidiaries Aeromexico Connect (regional division) and Aeromexico Travel (charter division), are the largest domestic airline in Mexico and, until Mexicana's apparent demise in Aug-2010, was the second-largest international airline behind Mexicana. Aeromexico is a founding member of SkyTeam.
Location of Aeromexico main hub (Mexico City Juarez International Airport)
AeroMexico share price
784 total articles
48 total articles
VivaAerobus joins Volaris and Interjet in placing large A320neo order. Can Mexico sustain all three?
Competition in Mexico’s dynamic market is set to intensify as the country’s smallest low-cost carrier is poised to at least triple in size over the next eight years following a landmark aircraft order with Airbus.
VivaAerobus has ordered 52 A320s, allowing for a rapid replacement of its current fleet of 19 737-300s and significant growth. VivaAerobus is currently a relatively small player in the Mexican market with only a 13% share in the domestic market and is a non-factor internationally as it has just one trans-border route.
VivaAerobus is now seeking to follow its closest competitor, Volaris, with an initial public offering which should provide the funds to support accelerated fleet and network growth. Market conditions in Mexico have improved significantly in recent years but there is a risk of a return to over-capacity and irrational competition given the fleet expansion plans at the country’s four main carriers.
Mexican airline Interjet has recently introduced a raft of new routes from Mexico City Juarez International including three pairings featuring the carrier’s latest fleet addition – the Sukhoi Superjet 100 – a 93-seat jet that Interjet is banking on for penetration into Mexico’s thinner markets and possibly international service.
In some ways the introduction of the SSJ100 marks a new era for Interjet, which has rapidly grown to become the second largest domestic carrier behind Grupo Aeromexico. The addition of a new fleet type is somewhat of a gamble given the SSJ100’s unproven track record. But Interjet appears willing to roll the dice in order to solidify its competitive standing among the four largest Mexican carriers. The carrier is devising strategies to capture the air travel demand developing among the country’s growing middle class who are opting for cheap air travel in lieu of taking their journeys by bus.
Having recently celebrated the significant milestone of competing an initial public offering, Mexican low-cost carrier Volaris remains bullish over the opportunities inherent in the Mexican aviation market as its domestic share continues to grow and its position in the international transborder space remains steady.
Key to Volaris’ belief in the robust opportunities present in Mexico is the growing appetite for air travel among the country’s increasing middle class. In the short term that thesis may prove tough to execute as the Mexican economy has been slowing and domestic passenger growth has not been as rapid during 2013 as recent years when Mexico’s carriers were scurrying to fill the void left by the collapse of Mexicana in late 2010.
As Volaris works to capture more of Mexico’s middle class, its competitors are devising their own strategies to compete in the dynamic Mexican market place. Aeromexico recently launched a new low-fare product scheme, "Contigo" while Interjet is planning a small market push as the first of its 20 93-seat Sukhoi Superjet 100s comes online. All of those dynamics should make for an interesting market place during the next couple of years as those carriers, along with VivaAerobus work to stake out their respective claims among the growing passenger base. Volaris is basing its future on a fleet comprised only of Airbus A320s while some of its competitors are utilising smaller jets to exploit thinner Mexican and transborder routes.
A new air services agreement recently forged between Mexico and Indonesia opens up an opportunity for a codeshare between Aeromexico and Garuda, which in early 2014 will be joining the Mexican flag carrier in the SkyTeam alliance. The expected partnership should result in the first of many codeshares between carriers from Southeast Asia and Latin America.
Southeast Asian and Latin American carriers are starting to seek out opportunities to partner with each other as ties and trade between their regions increase. The current lack of partnerships between Southeast Asian and Latin American carriers give Gulf and European carriers an advantage in carrying passengers between two of the world’s fastest growing aviation markets.
Aeromexico is the only Latin American carrier serving Asia, where it sees opportunities for expansion using its new Boeing 787 fleet. But Aeromexico only serves North Asia and will need to rely on partnerships to serve Southeast Asia.
Mexico's largest carrier Grupo Aeromexico is preparing to launch its new “Contigo” product offering on 1-Oct-2013 in what appears to be an effort to intensify competition with Mexican low cost carrier Volaris on transborder routes from Guadalajara.
The new lower-fare product is not billed as a low-cost carrier within Gruop Aeromexico’s operating structure, rather it seems to be a small-scale effort to ensure it offers a competitive product to frequent transborder travellers from Guadalajara. However, with Aeromexico’s generally higher cost structure and the track record of these types of experiments at other large global network carriers, Contigo’s staying power is suspect.
Contigo debuts just as Volaris completes an initial public offering that netted nearly USD350 million. The IPO occurred as other Latin American carriers, most notably Brazil’s Azul, have shelved plans to access the public markets.
Domestic passenger traffic in Mexico slowed to the single digits during 1H2013 after recording 10% growth in 2012. The country’s largest carrier Aeromexico is attributing some of the decrease in demand to a softening Mexican economy, which could pressure the country’s low-cost carriers whose business models are built on capturing members of the Mexican middle class that still travel largely by bus.
It is not yet clear how demand patterns within Mexico will shape up for the remainder of 2013, but all of the country’s main carriers continued to record year-on-year growth for Jun-2013 with the exception of Aeromexico. Mexico's only remaining legacy carrier is seeing its domestic market share slide as it focuses more on international expansion.
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