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 Business News | January 2006 
Network 2006: Mexican Wave
 FlightInternational.com
The Alamo is a reminder of San Antonio’s Mexican heritage. Today it is part of Texas, but the city’s Mexican links are still strong, both in terms of culture and commerce. It is fitting that in March San Antonio will offer route planners some insight into the profound changes under way south of the Rio Grande.
Mexican aviation has awakened from a deep sleep. Its two major airlines are being privatised and a swarm of start-ups aim to exploit Latin America’s largest emerging market. In no other country in the world has commercial aviation changed so much so fast.
Cintra’s split has sparked an outbreak of liberalisation. For a decade Mexico debated whether, when and how to divest government control over Cintra, the holding company for Aeromexico and Mexicana. Last year Cintra pressed ahead with the decision to privatise with its sale of Mexicana to the Posadas group, a large Mexican hotel operator.
Emilio Romano (pictured), Mexicana’s chief executive, will be a keynote speaker at Network 2006, where he will explain what this move to private ownership means for one of Mexico’s biggest airlines. Excited at the change, Romano has already announced new routes to the USA and as far abroad as China.
Cintra’s privatisation has one more step to go – the sale of Aeromexico. Last November’s bids were too low, so plans are under way to re-offer the airline. If all goes as hoped, by May Aeromexico will also be in private hands. Mexico’s government will be out of the business of owning airlines.
Its decision to end a decade of airline ownership has prompted unprecedented confidence in market forces. Domestic routes remain regulated, but the government has opened the door for new entrants. It has approved more air operator’s certificates in the past year than in the past decade.
The decision to convert one of Mexicana’s subsidiaries into Click, Mexico’s first low-cost carrier, has fired the imaginations of investors. As Cintra chairman Andres Conesa notes, low-cost carriers could lure many of Mexico’s 2.5 billion bus passengers on to aircraft.
Six low-cost start-ups have emerged. Three, including Click, are already flying. Two have international ties – Vuela with Central America’s TACA, and a yet-to-be-named airline backed by Brazil’s GOL, Latin America’s most successful low-cost carrier. With government incentives, these startups are putting Toluca, 40km (25 miles) northwest of Mexico City, on the map as Mexico’s new low-cost capital.
In contrast to this rush to the low-cost sector, less attention has been paid to the new US bilateral. It allows a third Mexican airline on all cross-border routes. Carriers such as AeroCalifornia, Aeromar and Azteca, which now have a limited presence in the USA, could be eyeing more routes to the north.
Rightly so, says Aaron Dychter, Mexico’s transport subsecretary, who predicts 2006 will launch “a new era in Mexican aviation”. |
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