| | |  Travel & Outdoors 
Airlines Boost Service to Mexico
 Megan Neighbor - Arizona Republic
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October 25, 2010
The number of flights from the United States to Mexico is up, fueled by the bankruptcy of Mexico's largest airline, a resurgence of leisure traffic and a tepid economic recovery.
Since last fall, several major airlines, including Tempe-based US Airways; United Continental Holdings Inc., the parent company of Continental and United; American; Delta and Frontier have increased their reach into Mexico's business and leisure destinations or have announced plans to grow.
Even Southwest, traditionally a domestic carrier, will gain access to Mexico, assuming the acquisition of AirTran is approved by the company's stockholders and federal regulators.
Phoenix is at the heart of US Airways' international flights to and from Mexico. Within the past year, the Tempe-based airline has dramatically increased direct service to Mexico from Phoenix Sky Harbor International Airport.
Los Angeles, Dallas and Miami also serve as gateways to the south for other carriers.
US Airways and its competitors' moves to provide additional service to destinations such as Mexico City, Cancun and Guadalajara come in response to a 19.2 percent year-over-year increase in international air traffic to Mexico. Much of that demand comes from the United States.
In part, demand is driven by a spike in business traffic to cities such as Guadalajara and Mexico City. It's also from a reinstatement of flights to leisure destinations such as Los Cabos and Cancun after the 2009 swine-flu scare caused traffic to Mexico's tourism destinations to plummet.
Couple the increased demand with the bankruptcy of Mexicana, Mexico's largest airline, and U.S. carriers have found a lucrative niche.
Alfonso Sumano, regional director for the Mexico Tourism Board for the Americas, attributed the air-traffic spike mostly to leisure travel.
"In addition to having several of the top sun and beach destinations of the world, Mexico has 30,000 archaeological sites, 110,000 monuments, 31 UNESCO World Heritage Sites and is second only to the U.S. in its number of spas," Sumano said. "It's a powerful mix."
Mexican airlines stymied
U.S. airlines have opted to take advantage of demand that Mexican airlines cannot meet.
Mexican airlines were stymied by a Federal Aviation Administration safety downgrade in July, when the country's airlines failed to meet the top-tier standards of the International Civil Aviation Organization.
Under Category 2 status, Mexican airlines can maintain flights to and from the United States but cannot increase service.
AeroMexico, which had added two new routes and some additional summer service to the United States, could expand no further.
A country's airlines can be downgraded for a number of reasons, including shortcomings in laws or regulations necessary for overseeing airlines, or shortcomings with the country's civil-aviation authority.
Ian Gregor, a spokesman for the FAA, did not disclose specifics about why Mexico has been downgraded or when its status might improve.
Just a month after the FAA's downgrade, Mexicana, Mexico's largest airline, which carried 11.1 million passengers to 65 national and international destinations in 2009, announced it was suspending all operations because of bankruptcy and restructuring.
Flights from Mexico City, Guadalajara and Quintana Roo were canceled on Aug. 27.
Passengers in major U.S. airports such as Chicago, Houston, Los Angeles, Sacramento, San Francisco, San Jose, New York and Washington, D.C., were unable to board Mexicana flights for which they had purchased tickets.
In court papers, Maru E. Johansen, Mexicana's U.S. vice president for legal affairs and corporate affairs, attributed the bankruptcy to "a flu epidemic that had a severe, immediate and unexpected impact upon Mexican tourism and business-related trips and travel."
Three days after Mexicana's suspension of flights, American Airlines and its regional affiliate, American Eagle, announced a 20 percent fare discount for customers who had tickets for the bankrupt carrier.
Shortly after, U.S. airlines moved to fill the void that Mexicana left, said industry consultant Bob Mann of R.W. Mann & Co. in New York.
"There was revenue to be had," Mann said.
U.S. carriers boost flights
From January to August, the Mexico Tourism Secretariat announced a 19.2 percent increase in international air traffic compared with 2009.
Of the 7.1 million foreign visitors to Mexico during that time, 4.3 million were Americans, a 15.7 percent increase compared with 2009 and a 1.9 percent increase over 2008.
The first year-over-year air-traffic increases were noticeable in the spring, a year after the H1N1 outbreak severely affected Mexico.
"We (Continental and United) had reduced our capacity in Mexico (because of swine flu) and have since brought it back," said Rahsaan Johnson, a spokesman for both United and Continental. "We chose to boost the (number of) flights that we had scheduled because we saw an opportunity, a bump in demand."
Earlier in October, United announced the launch of several flights from Los Angeles, San Francisco, Denver and Chicago to Mexico City, with new service beginning this month through January.
The same day, Continental Airlines announced daily non-stop service between Los Angeles International Airport and Leon/Guanajuato, beginning Nov. 1.
Other airlines announced new services from Charlotte, N.C., Dallas, San Jose, Sacramento and Minneapolis-St. Paul to Guadalajara, Leon, Mexico City, Puerto Vallarta and Los Cabos.
Year-over-year Latin passenger traffic increased significantly for US Airways, Continental, United and Delta, according to the carriers' September traffic reports. Carriers do not separate Mexico's passenger traffic from Latin passenger traffic.
Of the five major hub-and-spoke carriers, US Airways' September consolidated Latin passenger traffic had the largest year-over-year gains.
According to US Airways' September traffic statement, the airline has seen a 54.1 percent increase in its consolidated Latin traffic, which includes other Central and South American destinations, as well as traffic to the Caribbean. The airline did not provide data specific to Mexico.
US Airways' approach
Since January, US Airways has largely maintained the destinations it flies to in Mexico - with the exception of adding flights from Charlotte, N.C., to Puerto Vallarta and Los Cabos in June - but boosted the number of flights and its planes' capacities, said Andrew Nocella, senior vice president, marketing and planning.
Sky Harbor Airport is central to US Airways' stake in Mexico's air market.
"Phoenix is very Mexican-specific, but not Latin-specific," Nocella said.
Since 2009, the number of US Airways flights from Phoenix to destinations such as Guadalajara, Mexico City, Puerto Vallarta and Los Cabos, have doubled in some instances, according to data provided by Sky Harbor Airport.
September flights to Mexico City and Puerto Vallarta increased to 60 from 30 and to 68 from 34, respectively, over the same month in 2009. Flights to Guadalajara spiked to 90 from 57. Capacity for the flights to Guadalajara also grew, as mainline jets replaced smaller planes, Nocella said.
Mainline jets are also used for all Mexico City flights, Nocella said.
"Last year, there was a temporary dip in our beach capacity due to the flu. We've reinstated those flights," Nocella said. "The business markets of Mexico City and Guadalajara represent real year-over-year growth."
AeroMexico is the only other carrier with service from Phoenix to Mexico. Since September 2007, it has decreased its flights to 30 from 73 and eliminated Guadalajara and Mexico City as destinations. It currently has one daily flight to Hermosillo.
In August, AeroMexico's passenger traffic was down 56.6 percent at Sky Harbor Airport, compared with the same month a year before. It has reduced the size of its aircraft "to increase operating efficiency" in the past six months, said Claire Stern, a spokeswoman for the airport.
AeroMexico did not return calls, despite multiple interview requests.
In the future
An annual survey conducted by Mexico's Center of Advanced Tourism Studies suggests air traffic to Mexico will only increase in the coming months and years, said Sumano, of the Mexico Tourism Board for the Americas.
Mexico scored a 9.1 out of 10 on the survey in 2010. |
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