DAVID KNIBB SEATTLE Mexico's third and fourth largest airlines have both experienced problems that harm their ability to compete against the duopoly of Aeromexico and Mexicana.

Taesa, Mexico's number three carrier, remains grounded for safety reasons following a fatal crash on 9 November. Mexico's communications and transport ministry says inspectors found "a series of anomalies" that prompted it to ground Taesa two weeks later.

In December, Juan Antonio Barges Mestres, director general for civil aviation at the ministry, said inspectors were working as quickly as possible to review the records and condition of Taesa's 26 aircraft, but he would not predict when the Mexico City-based carrier might be allowed to resume flights.

Taesa's grounding comes at a delicate time. It has been working through a difficult restructuring programme for several years. By early 1999 it had retired all foreign debt and reached an agreement with most of its Mexican creditors. If Taesa's grounding drags on, that could impair its ability to pay debts as agreed, jeopardising the entire restructuring.

Meanwhile, AeroCalifornia, Mexico's next largest airline, has lost its codeshare alliance with American Airlines. Last August, AeroCalifornia and American had asked to add six routes to their extensive codeshare network. Now they have filed a joint notice announcing, without explanation, the termination of all codeshares between them. American declines to comment.

Some observers suspect that American withdrew because of growing pressure from Washington DC for US carriers to monitor the safety of airlines with which they share codes. With Aeromexico and Mexicana already linked with Delta and United, respectively, American becomes the largest US carrier without a Mexican partner.

Some Mexican aviation analysts think the declining financial strength of Mexico's independent airlines is due to the dominance of the domestic market by Cintra's two carriers, Aeromexico and Mexicana.

Source: Airline Business