ANALYSIS: Aeromexico and Delta bolster cross-border capacity

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Aeromexico and Delta Air Lines have applied for authority to operate at least 13 new routes between Mexico and the USA to date this year, as the carriers maximise their cross-border codeshare business.

New routes on the SkyTeam Alliance members include Cancun to Dallas-Fort Worth, Houston Intercontinental and Memphis, Los Angeles to Huatulco, La Paz and Loreto, and Las Vegas to Puerto Penasco, according to Innovata FlightMaps Analytics.

Aeromexico and Delta combined USA-Mexico routes, July 2013

Innovata FlightMaps Analytics

Available seat kilometres are up 4.2% year-to-date with the new routes even after the discontinuation of 17 largely seasonal routes since December, Innovata shows.

Aeromexico and Delta have applied for at least eight more route authorities from the US Department of Transportation (DOT) that they have yet to begin flying. These include Atlanta to Leon/Guanajuato, Cancun to Kansas City and Pittsburgh, Chicago O'Hare to Ixtapa/Zihuatanejo, Los Angeles to Ixtapa/Zihuatanejo and Leon/Guanajuato, and New York John F. Kennedy (JFK) to San Jose del Cabo and Puerto Vallarta.

Aeromexico and Delta combined new 2013 USA-Mexico route authorities, pending launch

Great Circle Mapper

Ruben Martinez, senior vice-president of corporate strategy at Aeromexico, says that Aeromexico's focus is to maximise connectivity through its hubs in Guadalajara, Hermosillo, Mexico City and Monterrey, while also developing seasonal routes to sun destinations - he says these fulfil the "need of flights for touristic wholesalers" - and expanding its network and connecting points in the USA. He adds that many of the applications were to update previously held permissions in order to include the codeshare with Delta on the flights.

"One of the new agreements with Delta is to include their codeshare to any route to USA in order to feed their flights, as well Delta will include Aeromexico codeshare to any Delta flight to Mexico," he says. "As partners we are increasing alternatives for our customers and more O&D [originating & departing] passengers between Mexico-USA."

Aeromexico and Delta forged an exclusive commercial alliance in August 2011, which included the expanded codeshare as well as the Atlanta-based carrier investing $65 million in the Mexican airline and a new joint MRO facility.

Delta confirms that it and Aeromexico will codeshare on any new cross-border flights that either carrier operates, but notes that they each make route planning decisions independent of the other because they do not have an immunised alliance.

This would explain the separate applications to the DOT for the Atlanta-Leon/Guanajuato route.

Christine Kennedy, general manager of international network planning for Latin America and the Caribbean at Delta, told Flightglobal in February that it planned to expand in the USA-Mexico market by building on its codeshare with Aeromexico with additional capacity to the Mexican carrier's hubs in Guadalajara, Mexico City and Monterrey.

"I'd rather see five-times daily to Mexico City [from Atlanta] and let Aeromexico serve all of the different [small] markets," she said.

Aeromexico and Delta will continue to grow in the market. Combined capacity is slated to increase 4.7% year-on-year by December and this does not include many of the recently authorised - or reauthorised - new routes, Innovata schedules show.

This growth will be driven by Delta with a nearly 8% year-on-year increase in ASKs while Aeromexico's capacity is slated to increase by 3.7%. This is notable as Delta has said that it anticipates flat to up slightly capacity growth this year while Aeromexico has said that international capacity will be up 5% to 7% over the same period.

These numbers may change once more of the new routes, including services to Leon/Guanajuato and some to Cancun, are loaded in the carriers' flight schedules.

Aeromexico and Delta are set to grow their share of cross-border capacity by 2.9 percentage points to 28.8% by December compared to a year earlier, Innovata shows. However, industry capacity is set to decrease over the same period by 5.8% to 2.18 billion ASKs.