Mexican market responding well to increased competion

Image: Map showing locations of Mexicos airportsA previous anna.aero trendwatch highlighted the accelerating growth in the Mexican domestic market brought on by the emergence of several new private low-cost airlines, and looked at the top domestic city pairs in terms of traffic. In this analysis, some of the new entrants will be examined in more detail as well as taking a closer look at the international market.

Mexico City: exploiting its central role

Analysis of government statistics for 2006 shows the dominant position of Mexico City airport (MEX) with regard to the domestic market.

Chart: Top 10 Mexican Airports
Source: DGAC Mexico

Image: AeroMexico adWith over seven million departing passengers, MEX is more than three times busier than the next busiest domestic airports at Monterrey and Guadalajara. Toluca, the airport some way outside Mexico City being used as a base by both Interjet and Volaris, has come from nowhere to take the number six position with nearly one million departing passengers in its first full year of LCC operations. These top 10 airports account for around three-quarters of all domestic traffic in Mexico.

Airline market shares for the domestic market in 2006 (and the first quarter of 2007) are shown below:

Airline Share 2006 Share 2007 Q1
Aeromexico 27.4% 23.7%
Mexicana 20.6% 17.4%
Aviacsa 14.0% 14.6%
Click Mexicana 6.4% 7.1%
Interjet 5.7% 5.0%
Aerolitoral 5.5% 5.4%
Azteca 4.9% 2.0%
Volaris 4.0% 5.8%
Aeromar 2.9% 2.1%
Magnicharters 2.8% 2.6%
AeroCalifornia 2.6% 4.6%
Avolar 1.9% 3.5%
Alma 0.9% 2.6%
Vivaaerobus 0.3% 3.5%
Source: DGAC Mexico
Note: AeroCalifornia had its licence suspended for six months during 2006. Azteca was grounded in February 2007.

Volaris has overtaken Interjet to now rank as the second largest LCC after Click MX. The start dates, fleet sizes, aircraft types and operational bases of the new carriers are shown below.

Airline Started Fleet (seats) Base
Click Mexicana July 2005 14 F100 (100) Mexico City
Avolar September 2005 8 B737 (136) Tijuana
Interjet December 2005 7 A320 (180) Toluca
Volaris March 2006 11 A319 (144) Toluca
Alma June 2006 8 CRJ200 (50) Guadalajara
Vivaaerobus November 2006 2 B737 (148) Monterrey
Source: JP-Fleets (May 2007)

A total of 50 aircraft are operated by these new low-cost carriers, with many more on order and awaiting delivery. anna.aero will look in more detail at some of these carriers in future weeks.

International traffic booming as well

Ad: Mexicana

The international market is dominated by foreign carriers as the majority of passengers on international flights are foreign. In 2006, Mexican airlines had a 30% share of international passengers, but this has fallen to under 24% in the first quarter of 2007 although Mexicana still transports more international passengers than any other carrier.

Airline Share 2006 Share 2007 Q1
Mexicana 18.6% 14.7%
American 12.4% 11.4%
AeroMexico 9.1% 7.7%
Continental 8.0% 7.7%
Alaska Airlines 6.2% 6.8%
Express Jet 5.6% 4.7%
Delta 5.2% 6.4%
United 4.5% 4.0%
America West 2.9% 3.0%
US Airways 2.5% 2.6%
Source: DGAC Mexico

Delta has made the biggest gain in market share in the first quarter. In terms of which Mexican airports support most international traffic, Mexico City leads the way once again.

Chart: Top 10 Mexican Airports International Departing Passengers
Source: DGAC Mexico

Logo: San Jose del CaboCancun and Guadalajara are second and third with San José del Cabo (SJD) fourth. SJD is primarily a tourist destination on the southern tip of the Baja California peninsula, popular with American and Canadian tourists.

Nine of the 10 most popular destinations for international services are in the USA with only Madrid preventing an all-US top 10.

Chart: Top 10 International destinations from Mexican airports
Source: DGAC Mexico

The only route to show a significant drop was Los Angeles with Madrid growing the fastest. The total growth in international scheduled traffic of four per cent is significantly below the domestic growth rate, reflecting the fact that the new fast-growing Mexican LCCs are currently focusing on domestic operations. Once they start international services the rate of growth is likely to increase.


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