I never thought I’d actually say these words, but… Mexicana is back. The airline is expected to start flying this fall and there may even be a few people who actually fly it. But make no mistake. Mexicana is not really an airline. It’s a jobs program/airport promoter that happens to fly airplanes.
The original Mexicana would have been 102 years old this year. The airline was a full-service carrier that primarily served domestic and US markets with a focus on its hub in Mexico City. The airline failed in 2010, and there have been 384,958 attempts to resurrect the airline ever since — give or take a few thousand. One of the issues in a restart was related to the powerful unions and the money owed.
What was a problem for many trying to bring the airline back was actually an asset for the Mexican government. Mexican president Andrés Manuel López Obrador (AMLO) has received enormous support from the unions, and he is paying them back with the gift of returning Mexicana to the skies.
The government paid 815 million pesos (~$47 million) for the airline to buy Mexicana, and a good chunk of that will go directly to those workers who are owed back pay from more than a decade ago. What did this new airline get in exchange for all that dough? It got three buildings and a flight simulator. This does not seem like the best way to start what is supposed to be a low-cost carrier.
Next up, the government says it will put in another 4 billion pesos (~$235 million) to get the airline off the ground. This includes acquiring 10 Boeing 737-800s and having them flying by year-end with fares that are 18 to 20 percent less than other airlines. Right.
Let’s remember, México has a strong and growing low-cost sector. In fact, it’s the only strong part of the Mexican aviation system. According to Cirium fleet data, Volaris has over 100 aircraft flying today with another 100 on order. Viva Aerobus has more than 50 airplanes flying and 30 more on order. This is where the growth is, and much of that is in pulling people off of buses with low fares.
So why do we need a new Mexicana? As I mentioned, it’s a jobs program, but it’s also an airport promoter. I’ve written multiple times here about how AMLO scrapped the brand new Mexico City airport that was being built and instead opted for a regionalized system that would see growth move to Felipe Ángeles International Airport (AIFA).
Airlines do not want to fly to AIFA. AMLO has forced cargo to move there, and the local airlines have added some flights there because they didn’t want to cross AMLO any more than they already had. In the month of August, there are a little over 30 flights per day from the airport. The main Mexico City airport has more than 450 daily, and it’s only that low because it is at capacity.
So, the new Mexicana will roll into AIFA and use that as its primary base. It will also open a base at the new Tulum airport when that opens. Mexicana will then fly domestic routes throughout the country. Airways reports the initial network will include flights from AIFA to Acapulco, Campeche, Cancún, Chetumal, Ciudad Juarez, Cozumel, Guadalajara, Hermosillo, Huatulco, Ixtapa-Zihuatanejo, La Paz, León, Los Cabos, Mazatlán, Mérida, Monterrey, Oaxaca, Puerto Vallarta, Tijuana, and Villahermosa. The next round will include more airports. Basically, it’s every city in the country with a runway that will see this flying billboard for AMLO’s new toy.
These are markets with a lot of service from the preferred Mexico City airport, and some have service from AIFA already, so what’s the value? Well, the new Mexicana will be cheaper! This isn’t just a kind gesture, and I am SURE it won’t be due to a lower cost structure. No, this is because it has no choice. Demand is going to be lower from AIFA than from Mexico City, and AMLO wants a low-cost carrier. But this will really be a low-fare carrier, not a low-cost one.
In the end, it will be a novelty to see Mexicana flying again — at least, for everyone except Breeze which will now face even more confusion over its MX code — but there’s absolutely no commercial reason for this to happen. That’s never stopped AMLO’s administration before, and there’s no reason for it to change now.
