Aeromexico keeps a close eye on domestic capacity

Washington DC
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Aeromexico is emphasising capacity discipine for the rest of 2013 as it expects pressure on domestic yields to continue through the second half of the year.

Domestic yields declined about 3% in the second quarter, says Aeromexico chief financial officer Ricardo Sanchez Baker in an earnings call today.

The SkyTeam carrier reduced domestic capacity by 1.8% in the second quarter in response to weaker than expected traffic conditions, says Aeromexico chief executive Andreas Conesa.

This is as domestic passenger traffic in Mexico grew 6.3% in the first five months of 2013, down from the 8.3% growth in the same period in 2012.

"We reacted quickly and proactively, adjusting domestic capacity to these new and unexpected conditions," says Conesa. The airline, however expects the second half of 2013 to be "more robust" than the first half.

Aeromexico expects systemwide capacity to grow by about 4.5% in 2013, and its fleet plan for the year remains unchanged. Most of the capacity increase will go towards the international market, although the airline expects to add more seats in the domestic market than it did in the first half of the year, says Conesa.

It will close 2013 with 115 in-service aircraft, one fewer than at the end of 2012.

The carrier will phase out nine Embraer ERJ-145s this year, of which five were cut from the fleet in the first half of 2013. These aircraft will be replaced with larger Embraer jets.

Aeromexico will also phase out two Boeing 737-700s and one 767 in 2013. For the full year, it will add four 737-800s, three 787s, one Embraer 190 and three Embraer 175s.