Aeromexico Tries to Grow in the US

For the last several years, Aeromexico has been a one note airline. It’s been all about Mexico City, but now the airline is finally trying to grow out of that shell once again. With Delta as its joint venture partner, Aeromexico seems to be thinking there’s a lot more opportunity out there. Or at least, that’s what Delta is telling the airline.

If we go back 10 years, Aeromexico had a life outside of Mexico City.

Aeromexico July 2014 Non-Mexico City North America Route Map

via Cirium

The airline connected Guadalajara to several important cities in Mexico alongside a ton of California flying which serves that migrant/ethnic traffic. From Monterrey, it had 15 domestic destinations plus Las Vegas and San Antonio. Tijuana served 7 in addition to acting as the gateway to Shanghai and Tokyo since Mexico City was too hot and high to go nonstop. The airline even served other cities around Mexico like Ciudad Juárez, Culiacán, and Hermosillo with a handful of flights to important destinations. That wouldn’t last.

Even before the pandemic, Aeromexico had pulled back to a shell of its former self outside of Mexico City. After all, Volaris and Viva Aerobus were eating the airline’s lunch, and Interjet was the wildcard, losing money and making life difficult for everyone. Aeromexico just couldn’t compete, so it didn’t.

The airline still had a larger presence in Monterrey and Guadalajara, but nearly everything else had become a spoke serving one of those big three cities. And then when the pandemic hit, even that mostly went away.

Not only did the airline shrink during the pandemic, but it kept pulling back each subsequent year. By 2023, Aeromexico’s domestic market included a mere 5 routes that didn’t touch Mexico City or the new Santa Lucia airport that the government decreed to be the only way to grow in the region. Those five routes?

Guadalajara – Monterrey, Tijuana Monterrey – León, Querétaro, and San Luis Potosí

All of those were exited after that summer with the exception of Monterrey – Querétaro. Sure there was still some flying from places like Guadalajara to the US, but this was bad.

Aeromexico July 2024 Non-Mexico City North America Route Map

via Cirium

Relying on slot hoarding at Mexico City was never a winning growth strategy. After all, the government has done nothing but shrink the number of slots available at the airport, so the airline had no choice but to get smaller if it couldn’t find another place to put airplanes.

Of course, shrinking wasn’t a big issue when the airline filed for bankruptcy protection. In fact, that was its best plan until it emerged leaner in March 2022. But that was far from its only issue.

Aeromexico’s joint venture with Delta was a lifeline, but in 2021 the US Federal Aviation Administration (FAA) put Mexico down to category 2 meaning that the joint venture with Delta was effectively on ice. Aeromexico couldn’t grow into the US even if it wanted to do so. This wasn’t lifted until after summer 2023. The joint venture is still in a tenuous situation thanks to politics putting a wrench in any US/Mexico air cooperation, now Aeromexico is making moves again… at least in the US.

In the domestic market, the airline is still effectively dormant. It continues to fly the Monterrey – Querétaro route, and it brought back Guadalajara – Tijuana for summer, but that’s it. It has now made Monterrey the gateway for Asia flights, but there is very little feed to be had there. The ULCCs have just pushed Aeromexico out of everything outside Mexico City.

But in the US market, growth abounds. Aeromexico acted like Delta was running its network planning department initially. (Actually, it may very well be doing that….)

It brought back a slew of flights into Delta hubs and focus cities from throughout Mexico with service starting in 2024, trying to take advantage of Delta’s massive feed opportunities. Those routes?

Atlanta – Guadalajara, León, Mérida (already exited), Monterrey, Querétaro Boston – Mexico City Detroit – Guadalajara (already exited), Querétaro Raleigh/Durham – Mexico City Salt Lake City – Mexico City (winter only), Monterrey (already exited)

All of these routes were meant to feed Delta at lower cost than Delta could feed itself. And the joint venture could take advantage of big traffic flows on either side of the border.

None of this was particularly surprising, but it’s what came later that I found more interesting:

Denver – Monterrey flies weekly in winter, presumably for Mexicans looking for a ski vacation McAllen – Santa Lucia Atlanta and Los Angeles – Manzanillo flies weekly in winter, presumably for Americans looking for a beach vacation Tampa – Mexico City

In the case of the former two, it looks like Aeromexico is actually doing its own network planning, finding opportunities to make the airline attractive to Mexicans. For the latter two, well, it looks like Aeromexico is just doing Delta’s work, probably with some free aircraft time that makes it even cheaper to operate and provide utility for Americans in those cities. Maybe Tampa is a mix of both.

It didn’t stop there. The airline has added even more flying to the US with an eye on what’s most valuable for Mexicans. It is doing Mexico City – Newark and Washington/Dulles. Neither of those are Delta hubs, obviously, but they are gateways to important cities (and New Jersey) that should have service from Aeromexico if it’s going to be Mexico’s only full-service airline.

The airline’s most recent add is another hard turn in a different direction. It’s flying from Miami to Cancún once daily year-round.

This is a hotly-contested market, but it’s one without a premium option from the Mexico side. It’s a big market, and it’s a very short hop, but it looks like the airline has realized that if it wants to compete in Cancún, it probably needs to be able to get those people to the unofficial capital of Latin America in Miami. Further, Aeromexico is partners with LATAM, so this can create connecting opportunities. That shouldn’t be a top priority since connecting through the US if you’re a foreign national is absolute hell, but it can help fill some seats.

Is this going to make money? Meh, probably not. But I can see the strategic value if it helps to get more Cancún travelers using the airline for the rest of their travel needs. Aeromexico can’t just be all about Mexico City and Delta — ok, maybe it can — but it seems like it wants to break out beyond that box.

Am I skeptical this is going to work? I sure am. But it’s very low risk, and it’s worth trying.