US airlines vacate Mexico City: US LCC model ultimately not viable

After JetBlue Airways ceases flights to Mexico City in early 2020, no US low cost airline will serve the market. JetBlue, along with Southwest and Alaska Airlines, had high hopes for Mexico City after they gained slots divested by Aeromexico and Delta as a requirement for those two airlines to launch their joint venture.

But over the course of the past year each of those low cost operators has pulled out of Mexico City, which is largely a business market. Given the dominance of Mexican airlines at Mexico City Juarez International airport, low cost operators targeting VFR or leisure passengers faced an uphill climb in making the market work, since capacity was growing at a fast pace.

Even as those airlines faced heightened capacity in the market, JetBlue is uncontested in two markets it is pulling from Mexico City and has suggested that routes to Juarez were simply not producing satisfactory margins.

The exit of all of those airlines shows that even the best predictions of a successful route performance can change quickly as market conditions shift.