Mexico’s airlines welcome signs of a modest economic recovery after a tough CY2014

Mexico's publicly traded airlines are seeing signs of a gradual recovery in the country's fragile economy, which is fuelling hope that their fortunes will improve in CY2015 after battling weak domestic demand in CY2014.

As a result of sagging domestic yields, both Aeromexico and Volaris have attempted to push the bulk of their capacity into international markets, with varying outcomes as the introduction of five Boeing 787s has continued to pressure Aeromexico's yields in the short term. Volaris' recent transborder push does appear to be mitigating some of Mexico's domestic weakness.

Both airlines were profitable in 3Q2014; but Aeromexico's profits declined while Volaris increased its net income by shoring non-ticket revenue and opting to trade in load factor to boost yields.