Aeromexico has decided to pull out of Canada entirely less than a year after launching services to both Toronto and Montreal.
The VP of Aeromexico's North America division, Frank Galan, says the carrier has already terminated scheduled service to Montreal and is now working on a plan for withdrawing from Toronto. "We'll be pulling out of Canada completely," Galan tells ATI and Flightglobal.
Aeromexico decided early last year to launch scheduled services to Canada, which was previously only served by rival Mexicana. Aeromexico launched one daily flight on the Mexico City-Toronto route in March 2009 followed by two weekly flights on the Mexico City-Montreal route in April 2009.
Galan says Aeromexico has only been operating a few flights per week to Toronto over the last several months due to low demand and expects to drop the route entirely in late February or early March. No specific date for the withdrawal has been set because Aeromexico is now working with wholesalers to make sure it honours all its existing commitments.
Galan says while Aeromexico has already stopped serving Montreal on a scheduled basis it has been operating a few charter flights to Montreal, which will continue until it fulfils all its contracts with wholesalers.
Galan blames new Canadian visa requirements for driving down demand on Mexico-Canada services to the point the routes are not sustainable. Last July the Canadian government suddenly began requiring visas for Mexican citizens.
Galan says Mexicans now must go through a difficult and expensive visa application process before travelling to Canada. The result is several Mexican families that were intending to holiday in Canada have "chosen to go elsewhere".
He says the new visa requirement, which Canada has kept in place despite intense lobbying from travel agent groups and Latin American airline association ALTA, had a significant impact on Aeromexico's Mexico-Canada traffic because 90% of the passengers travelling on the carrier's Canadian services are Mexicans.
Galan says Aeromexico decided to continue serving both of its Canadian routes after the new visa policy was suddenly implemented in July, hoping demand would return. But in the end most Mexicans have decided the visa was simply too much hassle. "We tried waiting it out to see if it was impactful," Galan explains.
A Mexicana spokesman says the carrier also has been impacted by the new Canadian visa requirement, with traffic on its Mexico-Canada routes down 30% since the requirement was implemented. He says the reduced demand prompted the carrier to suspend last month its Mexico City-Edmonton service, a route it only launched in 2008. But Mexicana continues to serve Toronto, Montreal, Calgary and Vancouver from its Mexico City hub.
According to Mexican DGAC data, the number of scheduled passengers on the core Mexico City-Toronto route dropped 28% in the fourth quarter of 2009 compared to the fourth quarter of 2008 from 53,000 to 38,000 despite the entry of a third carrier, Aeromexico. Air Canada also offers flights in the Mexico City-Toronto market.
Canadian carriers were likely not as impacted by the new visa requirement because Canadian carriers focus more on the Canadian leisure market with flights to Mexico's beach destinations. According to Innovata, Air Canada currently operates scheduled flights to six destinations in Mexico - Cancun, Cozumel, Ixtapa, Mexico City, Puerto Vallarta and Los Cabos.
Canadian carriers last year carried two million passengers to and from Mexico, according to DGAC data, including 1.1 million passengers on scheduled flights and 900,000 passengers on charters. Traffic was much higher in January through April and again in December but this primarily reflects the seasonal nature of the market as well as the impact of the H1N1 virus.
Source: Air Transport Intelligence news
