Mexicana is 75 years old this year

Geoffrey Jones/MEXICO CITY

MEXICANA, THE OLDEST airline in North America, celebrates its 75th anniversary this year. Under the new leadership of chief executive Fernando Flores, Mexicana has an optimistic vision for the future as it consolidates its market strengths, both within Mexico and internationally.

Flores, the airline's former senior vice-president of human resources, has worked for the airline for 50 years. He took over as chief executive a year ago and set about turning the airline's financial - and business - image around. Flores immediately established a "100-day plan", with several major objectives, including a far greater flow of information on "-what is happening in the airline" to its employees. A programme aimed at to guaranteeing operational safety, reliability and special care for the needs of all its customers, it has resulted in some dramatic changes within Mexicana.

While Mexicana's passenger traffic has remained stable under Flores' leadership, the employees now adopt a far more commercial attitude to their customers. Mervyn Roig, Mexicana's vice-president of corporate communications, says: "Originally, Mexicana didn't really have to sell itself - we're now here to sell. We have good routes, good schedules and an experienced and dedicated staff. This is now the basis of Mexicana's new-found success."

Critical in the turn-around process at Mexicana was the action in March of capitalising all of the airline's debts. This turning point was made possible by the trust of the Mexican banks involved, the airline's new owners and, to a small extent, the Mexican Government, which retains a small holding interest. In June, a new holding company was formed - CINTRA (Corporacion International de Aviacion) - headed by Flores, with controlling interests of elements of Mexicana and Aeromexico (Aerovias de Mexico), although it is not a formal merger of the two airlines.

Mexicana stock (and a percentage of Aeromexico's) has been changed to CINTRA stock which will hold this on behalf of Mexicana, plus its associated regional airlines Aerocaribe, Aerocozumel, Aeromonterrey and several other, smaller non-airline companies. The Mexican anti-trust laws are controlled by an independent body, CFC, responsible for assessing the financial structure of the element companies under CINTRA, but, at the same time, helping both the major Mexican airlines in their battle for survival against the many foreign carriers which seek to capture more of the Mexican market.

Both Mexicana and Aeromexico are relatively small airlines with fleets of 44 and 56 aircraft, respectively. There are different "brands" to identify the two airlines clearly, but their strength is the niche market between the USA and Mexico, particularly in carrying Mexicans now living in the USA back "home" (many of these are the paisanos, or agricultural workers), as well as tourists.

The Mexico City base operates as a hub, feeding traffic in from the USA, Canada and points in northern Mexico, on to the other destinations. There is a deregulated market in Mexico so Mexicana (and Aeromexico) have to compete against other new low-cost operators, such as Mexico City-based TAESA.

Mexicana has consolidated its fleet, disposing of its McDonnell Douglas DC-10s about 18 months ago because they were becoming to costly to maintain and were not suitable for its route structure. The ageing Boeing 727 fleet, which has been halved in size to 22 aircraft, recently underwent cabin refurbishment. Although the 727s comply with all environmental requirements throughout the network, a re-engineing programme is being considered, to maintain compliance in to the next decade. The rest of the fleet consists of ten leased Fokker 100s and 12 Airbus A320s, some of which are leased and some owned. The number of A320s will be increased to 28, of which 22 will be owned and six leased.

Mexicana's diversified commercial strategy includes its Alas d'America (Wings over America) programme, new codesharing agreements with AeroPeru and a new service from Mexico City to Santiago and onwards to Buenos Aires, due to start this summer. Codeshares also exist with KLM and, most recently, with Japan Airlines through Los Angeles. Mexicana has also signed joint-venture agreements with Venezuelan airline Avensa (on services to Caracus) and with Aeroflot. It also has a cargo division, Aeromexpress, which operates 727-200 freighters on scheduled services from Mexico City.

Back from the brink of bankruptcy, Mexicana has a new lease of life and self-confidence under Flores and CINTRA. It is appropriate that, as the airline's 75th anniversary celebrations continue this year, Mexicana's customers and staff can now share in this new optimism.

Source: Flight International