Aeromar responds to Aeromexico’s regional expansion

Mexico City
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Mexican ATR 42 operator Aeromar claims Aeromexico's expansion into new regional markets is "irresponsible" and warns many of the routes being added will not be able to sustain two carriers.

Aeromexico last month unveiled plans to launch Embraer ERJ-145 service on four routes currently only served by Aeromar - Mexico City to Ciudad Victoria, Colima, Lazaro Cardenas and Tepic. Aeromar senior VP and CFO Ami Lindenberg claims none of these routes have enough demand to support multiple carriers. He points out that over the last year Mexicana Click briefly served Ciudad Victoria and Colima, and Aviacsa briefly served Tepic before pulling out due to heavy losses.

"Aeromexico says they'll enter. I have my doubts. It makes no sense. You're talking about destinations that have a very low density of passengers," Lindenberg says.

"If an airline is managed under strict commercial basis you look at the market, make an analysis and make a decision based on facts and needs. I'm not sure what are the reasons driving the decision [at Aeromexico] on where to go and what aircraft to use, but I'm sure they aren't economical reasons because if they were they wouldn't announce the routes they are going to enter."

"I don't think it's useful but it's a free country and airlines are free to do what they want," Lindenberg adds. "We'll see in the medium term what the results will be."

Speaking to ATI last week, Aeromexico CEO Andres Conesa defended the carrier's decision to launch the new regional routes, and its decision about two years ago to stop codesharing with Aeromar. The two carriers have since become bitter rivals as Aeromexico has rapidly grown the regional jet fleet at Aeromexico Connect, formerly known as Aerolitoral.

"We think the ERJ-145s are better than the ATRs," Conesa says. "If we can be profitable with those planes why do we need Aeromar?"

Referring to the four exclusive Aeromar routes Aeromexico plans to begin serving Conesa adds: "It's a 50-seater versus a 50-seater with a significantly better product. Let the consumer chose. [The ERJ] is a faster plane. It's more reliable."

Conesa says the four routes are an important part of Aeromexico's new strategy to cover all domestic markets. This year the carrier is adding nine domestic destinations, giving it a total of 48.

This is made possible the by the addition of seven ERJ-145s, which will give Aeromexico 37 of the type. Aeromar currently operates a fleet of 10 ATR 42-500s and four ATR 42-320s.

Conesa adds Aeromar also complained when Aeromexico launched Mexico City-Morelia that the route wasn't large enough for two carriers, but in the end it has worked out for both of them. Aeromar currently operates 31 weekly ATR 42 flights between Mexico City and Morelia while Aeromexico Connect operates 17 weekly ERJ-145 frequencies, according to Innovata.

In addition to previously codesharing on Aeromar ATR 42 flights, Aeoromexico until late last year had a fleet of Saab 340B turboprops operated bt Aeromexico Connect. Conesa says the carrier decided to remove all turboprops from its network after customer surveys done by the carrier concluded its passengers prefer jets over turboprops.

Lindenberg, however, claims Aeromar's high frequency of service, high reliability and business lounges helps it attract business passengers and overcome competition from larger carriers on those routes where there is competition. Aeromar now operates lounges which are free of charge to all its passengers in Mexico City and Jalapa. Lindenberg says new lounges will open later this month in Colima, Ciudad Victoria and Tepic.

"We're used to competition," Lindenberg says. "We've seen it before and have survived."

Lindenberg complains Aeromexico is stepping up competition domestically against all carriers, including, Interjet and Mexicana, at a time when market conditions are already weak. "To enter into war against all the airlines in the [Mexican] industry at one time on all routes is irresponsible," he says.