ALTA 2010: Aeromexico adds three 737-800s and one 767

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Aeromexico is adding three Boeing 737s and one 767 to its fleet this month as part of a plan to further increase capacity ahead of the upcoming peak season.

Aeromexico CEO Andres Conesa says the SkyTeam carrier has agreed to lease three 737-800s from Transavia. He says Aeromexico has committed to dry leasing the aircraft, which will be operated in all-economy configuration with 180 seats, for an initial period of six months.

All three additional 737-800s will be in service by the end of this month. Conesa says Aeromexico also has just taken delivery of an additional 767 which will be placed into service by the end of this month.

Grupo Aeromexico has not added any aircraft since rival Mexicana suspended operations in August. But Conesa says the carrier was able to quickly add the equivalent of seven to eight aircraft by increasing the average utilisation of its existing fleet from about 12 to 14 hours per day. He says domestic capacity was also increased by moving the three Boeing MD-80s operated by the Aeromexico Travel unit from the charter to scheduled market.

Conesa says the additional 767 will be used to bolster frequencies to Barcelona from three to four flights per week and to Buenos Aires from seven to 10 weekly flights. Following Mexicana's suspension Aeromexico already increased its Mexico City-Buenos Aires service from three to seven weekly frequencies using its existing widebody fleet. Buenos Aires was one of Mexicana's strongest international markets and was served by Mexicana with two daily flights.

Conesa says the three Transavia 737-800s will be used to further bolster domestic frequencies. He says Aeromexico opted for six-month temporary leases on the aircraft because it will not commit to permanently growing its fleet until it forges a new contract with its pilots.

"We are working with the pilots. We will grow as soon as we can get an agreement. Once we have a long-term agreement we will get long-term aircraft," Conesa said in an interview with ATI and Flightglobal at the ALTA 2010 Airline Leadership Forum in Panama.

"We've explained to them in order to grow we need competitive conditions with other airlines. We're working on them with that. We need to reduce the gap with our competitors."

A spokesman for Aeromexico pilots unions ASPA says members overwhelmingly rejected a new contract proposal three weeks ago. The new contract would have reduced benefits and increased the number of hours pilots work per month.

The ASPA spokesman says most pilots are upset about Aeromexio's failure to meet a prior promise to increase the mainline fleet to 60 aircraft. He says Aeromexico as part of its last proposal offered to add several aircraft but is still not willing to guarantee a fleet of 60 aircraft. The union believes that since Mexican's suspension Aeromexico has been operating its 44 mainline aircraft at very high load factors and the airline has been highly profitable.

The ASPA spokesman says talks with Aeromexico's management have resumed. Conesa says he is confident the carrier and its pilots can agree on a new contract.

"Obviously we have the best pilots and the best flight attendants. We want for them to be the best paying in the industry but we want to reduce the gap we today have with our competitors. We want a contract that is more productive and less costly than the one we have now," Conesa says.

A spokesman for Aeromexico flight attendants union ASSA says there are currently no negotiations with the carrier. He says a new contract was just completed earlier this year but ASSA is willing to renegotiate conditions and productivity but not salaries.

Conesa says Aeromexico would be willing to significantly expand its fleet if it can reduce its labour costs. He says the carrier is already working with leasing companies to potentially add 737-700/800s beyond the delivery slots it already has with Boeing for 2012 and 2013.

Conesa says the regional jet fleet at Aeromexico Connect will also be expanded if new union contracts can be forged. Aeromexico Connect currently operates seven E-190s with an additional nine aircraft on order. Conesa says the carrier plans to take one more E-190 this year with the remaining aircraft to be delivered in 2011 and 2012.

Without a new pilot contract Conesa says Aeromexico will keep the total size of the fleet at Connect stable by reducing its ERJ-145 fleet as additional E-190s come on line. But if it gets a new contract with its pilots Aeromexico would be willing to grow the Connect fleet by keep its ERJ-145s while taking the E-190s it has order as well as potentially additional E-190s.

According to ASPA, there are currently 812 pilots at Aeromexico mainline, 456 at Connect and 25 at Travel. Conesa says Aeromexico was able to increase aircraft utilisation and capacity after Mexicana's suspension because the company had the equivalent of about 100 excess pilots on its payroll.

The ASPA spokesman says before August Aeromexico pilots were only flying on average 75 hours per month. As the current contract allows up to 85 hours per month and Mexican law allows up to 90 hours per month, the ASPA spokesman says there is still some room to further increase capacity without having to hire extra pilots.