Mexico's Interjet adds A320s from CIT and ACG

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Mexico's Interjet has taken delivery of two additional Airbus A320s which it is using to add capacity in the Mexican domestic market.

Interjet CEO Jose Luis Garza says the carrier's 16th A320 was placed into service at the beginning of this month and operations with the 17th A320 began at the end of last week.

Garza says the CFM56-powered A320s are being leased from CIT and Aviation Capital Group (ACG) for terms of four to six years. He says one of the aircraft was built in 2008 and previously operated by Mexicana while the other was built in 2004 and previously operated by Spain's Vueling.

ATI first reported January that Interjet was seeking to lease two additional A320s for delivery in mid 2010. Interjet has an outstanding order for 12 A320s but its next delivery slot is not until 2011 because the low-cost carrier elected in late 2008 to defer all its 2009 and 2010 deliveries due to the economic downturn.

"Next year we'll resume our expansion with Airbus," Garza tells ATI. He adds Interjet is now committed to taking four new A320s in 2011, four more aircraft in 2012 and the final four aircraft from its order in 2013.

An improvement in market conditions and consolidation in the domestic Mexican market, which has led to several carriers ceasing operations, prompted Interjet to reconsider expansion for 2010 with leased aircraft. "We believe the market can accept the additional capacity," Garza says.

He says the first half of 2010 was "much better than last year". Garza says privately owned Interjet had a net margin of about 6% through the first six months of this year and "we expect to run in the second half a little higher - probably 6% to 8%".

The two additional A320s have allowed Interjet to launch new routes earlier this month from Mexico City International to Acapulco, Chihuahua, Puerto Vallarta and Ixtapa/Zihuatanejo. Interjet previously only served these four destinations from Mexico City alternative airport Toluca.

Interjet also launched at the beginning of this month a new Guadalajara-Cancun service. Garza says the new Cancun service expands Interjet's Guadalajara operation to six routes, joining Mexico City, Toluca, Monterrey, Tijuana and Los Cabos.

Garza says about 65% of Interjet's flights currently operate from Mexico City, 25% from Toluca, and 5% from Guadalajara. Garza says going forward "our expansion will be more focused on Mexico City" but the carrier will continue to use Toluca to serve several leisure routes and "a couple of dense business routes such as Guadalajara and Monterrey".

Interjet has been gradually building up its Mexico City operation since 2008, when it gained access to the airport by acquiring slots from grounded carrier Aerocalifornia. But it has always said it remains committed to also serving Toluca, where it has its headquarters and maintenance base.

The four new routes give Interjet 20 destinations from Mexico City. Interjet now serves eight destinations from Toluca - all eight of which are also now served from Mexico City.

Interjet is currently operating a 17-aircaft schedule but Garza says this will be reduced to 16 aircraft this fall with frequencies on some of its leisure routes being reduced. He says the capacity reduction is part of Interjet's strategy to use the slower months to perform heavy checks on its A320s.

He says Interjet's single heavy maintenance line is currently not being used as the carrier was unable to secure a third-party customer for the current summer season. Last summer Interjet overhauled its first third-party aircraft, an ACG-owned A320 which was subsequently delivered to Frontier Airlines

Garza says Interjet's maintenance hangar at Toluca, which opened in 2007 and secured FAA certification in 2008, just completed work on the two newly acquired A320s. Interjet performed c-checks on both A320s, reconfigured the aircraft and repainted them. Typically leasing companies hand over aircraft with a fresh maintenance check but Garza says it made sure to take the aircraft without the check. "It was part of the deal. It's good for our MRO business," he says.