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Aeromexico looks to pressure Volaris with a new low-fare branding exercise, Contigo

Analysis

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.

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