Karen Walker

Mexico's chief regional airlines mean to work closer together with the possible aim of becoming a single operation while retaining individual names, shunning concerns about monopolistic behaviour among Mexican airlines.

Mexico's major airlines, Aeromexico and Mexicana, and the regionals Aerocaribe, Aerocozumel and Aerolitoral, are affiliates of the Cintra holding company. In November, the Mexican chamber of deputies' anti-monopoly committee began hearings to examine Cintra's operations amid charges of monopoly.

But despite recommendations from some Mexican federal agencies that Aeromexico and Mexicana should be separated, the president of Aerolitoral, Carlos Trevino, makes it clear that he sees potential for closer cooperation with at least two other regionals, namely fellow Cintra affiliate Aerocaribe and independently owned Aeromar. Trevino concedes that monopoly concerns could be a problem for now, but adds: 'everything could change'.

Trevino says he sees the possibility of 'more and more cooperation' among the three airlines. Aerolitoral already has marketing alliances with the other two. 'In the future, we could look for more ways to save costs and resources in areas such as maintenance, parts and pilot training. It has been difficult in the past because we don't have the same aircraft right now, but we have to decide which fleet to operate. The names are very strong, so I think we will keep them and promote them.'

Aeromar has ATR42s and Aerocaribe a mix of Fokker F27s and Douglas DC-9s. Aerolitoral has just purchased six Saab 340s to join its fleet of 27 Fairchild Metro IIIs and will make a decision by the end of the year about a 50-seater, possibly the Saab 2000 but, Trevino thinks, more likely a regional jet.

Trevino says it is important for the three airlines to face up to low-cost competition that is building up on some domestic business routes, such as Torreon to Juarez, as well as cross-border competition from American Airlines and Continental Airlines. In its ten-year business plan, Aerolitoral envisions adding 76 new routes to its existing 53, concentrating mainly on central and northern Mexico, and border cities in the US. The airline also plans to create minihubs in Culiacan, Juarez, Leon, Tampico, Tijuana and Torreon. 'I think the regional industry will grow tremendously,' says Trevino. 'There is a need for more frequency and for more routes that don't go through Mexico City.'

Cintra has approved Aerolitoral's long-term growth plan, including a goal to serve almost 1.2 million passengers by the year 2000. In 1997, Aerolitoral carried 793,000 passengers. The airline began operations in 1991, as a wholly owned subsidiary of Aeromexico, with a $100 million investment. 'Part of the success of this company was due to the fact that we came at the right time to a country that was lacking a regional service,' says Trevino.

In the shorter term, Trevino says he expects to sign an alliance with Delta Air Lines within the first quarter of 1998 and perhaps also begin alliance talks with Japan Air Lines. Both Delta and JAL already have alliances with Aeromexico. A Delta alliance would establish a bridge between the US carrier's hub at Los Angeles and Tijuana, one of Aerolitoral's planned minihubs. Trevino anticipates a five times daily service between LA and Tijuana. JAL could also serve to feed traffic to Aerolitoral from LA.

Source: Airline Business