Depressed pricing still hangs over Mexico’s domestic market, but demand holds steady

Premium Analysis

Mexico's domestic market continues to grow at a steady pace, with passenger levels increasing 9% year-on-year for the first nine months of 2017. But pricing in the country's domestic market was depressed during 3Q2017, creating challenges for the larger airlines operating in Mexico.

The country's second largest airline, Volaris, continues to be under pricing pressure in 4Q2017, while Aeromexico believes its capacity rationalisation in the domestic market is helping its yield performance. For Aeromexico, the more challenging geographical region is the US transborder market.

Aeromexico does expect some capacity rationalisation in the US transborder market, but the region remains competitive, and is strategically important for both Aeromexico and Volaris. Their respective performances on US routes could remain challenged until leisure demand firms up.

Become a CAPA Member to access Analysis Reports

This CAPA Premium Analysis Report is 1,239 words.
Become a CAPA Member

Our Analysis Reports are only available to CAPA Members. CAPA Membership provides exclusive access to in-depth insights on the latest developments in the aviation and travel industry, developed by our team of dedicated analysts located in Europe, North America, Asia and Australia.

Each report offers a fresh perspective on the latest industry trends and is available online or via the CAPA mobile app, with customisable alerts to help you stay informed and identify new business opportunities.

CAPA Membership also provides access to our full suite of tools, including a tailored selection of more than 1,000 News Briefs every week and comprehensive data and analysis on thousands of companies around the world.