After failing to buy Aeromexico, Mexicana looks ahead

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It certainly would have been a big deal if Mexicana Airlines had succeeded in buying its largest rival, Aeromexico. But since the bid was rejected by antitrust regulators (Banamex, a Citigroup subsidiary, had the winning offer), Mexicana has been focusing on other strategies.

Even without a major merger, Mexicana has gone through important changes in recent years. Since Mexicana was privatized after the government sold the airline to Grupo Posadas in 2005, Mexicana has strengthened its ties with partner airlines and increased the presence of its low-cost subsidiary, Click Mexicana, which launched in 2005.

Changes in corporate structure and practices are taking place this year, and Mexicana has even opened its own museum, in Mexico City's San Juan de Aragon district that is open to the public. The facility has a replica of a Lincoln Standard, the first aircraft used by the company in the 1920s, plus a Boeing 727 flight simulator.

In addition, the airline moved its Chicago staff to a new facility in April.

Adolfo Crespo y Vivo, Mexicana's senior vice president of customer service and corporate communications, answered questions about how the airline has evolved and where it's headed.

Travel Weekly:Mexicana's merger with Aeromexico was turned down. How does that change the airline's strategy moving forward?

Crespo: Mexicana's objective and Plan A has always been to operate the best airline in the region. The possibility of acquiring Aeromexico came up as an alternative, or Plan B. We are now focused on Plan A.

TW:How will the sale of Aeromexico to Banamex affect airline competition in Mexico?

Crespo: Mexico's air transportation market has undergone unprecedented changes. In less than 18 months, we went from six airlines to 14, creating pressure on yields. Domestic markets have experienced a 35% increase in capacity, and the overall stimulation, or growth, in the market is less than 20%. Mexicana believes that Mexico's market is too small for two trunk carriers and expects consolidations in the near future.

TW:It's been a couple of years since Mexicana was bought by Grupo Posadas. How would you describe the differences at the airline today?

Crespo: The restructuring initiatives recently implemented have resulted in greater cash flows, guaranteeing solid growth. There's a long-term objective to strengthen the airline and set forth a positive impact. This process, and the input of our outstanding employee participation, demonstrates the [goal] to position Mexicana as one of the top airlines in the world.

TW:To what extent has Mexicana benefited from synergies with the other Posadas brands, such as Fiesta Americana? 

Crespo: Our operation continues to work independently. Mexicana Airlines works with Posadas as well as with other companies in the hotel industry.

TW:At what stage is Mexicana's management reorganization, and how different will the airline be when it's complete? 

Crespo: The 18-month period of stable, ordered transition following the acquisition of the company, which was agreed would be spearheaded by Emilio Romano, has come to an end.

This change was intended to meet the challenge of a highly competitive market and create greater value for our clients and stockholders.

TW:We've been hearing about new products. Is the new Mexicana Vacations packages feature, available through World Wide Travel Exchange (Expedia's private-label booking engine), something that will be of use to travel agents or just consumers? How is Mexicana marketing its packages to travel agents? 

Crespo: Mexicana Vacation packages through WWTE are only for consumers. However, Vacation Travel Plus packages are offered through travel agents and booked through Mexicana's call center.  

TW:How long has the "Pay One Price and Fly Five Times" promotion been around? Has it helped to grow traffic between Miami, New York and Mexico City? 

Crespo: The Pay One Price and Fly Five Times promotion was launched five months ago, and it has helped the growth of the corporate market from Miami and New York. It's a promotion exclusively for passengers through the Mexicana sales office.

TW:Since Click Mexicana just passed its second anniversary, how would you describe the carrier's growth? What percentage of Mexicana's business is through Click, and do you know what percentage of the domestic Mexican market Click controls?

Crespo: As of today, Click Mexicana's participation in the domestic market is at 7.1%, and it serves 26 routes, which is a significant increase of approximately 62.5%, compared with routes served when it launched in 2005. Presently, [the fleet] is comprised of 17 Fokker 100 aircraft with the Coach Plus configuration, which offers great comfort.

TW:What has been the effect of the growing number of low-fare carriers on Click and Mexicana Airlines?

Crespo: Mexicana Airlines' main focus is offering a product with foremost quality, with exceptional service. Click Mexicana's objective is to offer competitive advantages that are distinguished from other low-cost carriers.

Click is the only low-cost carrier sustained by the experience and tradition of a company like Mexicana de Aviacion. Click customers accrue miles with Mexicana's Frecuenta loyalty program, which offers greater advantages in accumulating miles.

TW:What additional growth is planned for Click Mexicana? Will there be more international expansion across the border? 

Crespo: Click Mexicana continues exploring diverse route alternatives that would satisfy our clients' needs. However, at this point we're unable to confirm any additional information.

TW:Mexicana's most recent codeshare agreement was with Avianca (Colombia's national carrier), correct? What other plans does Mexicana have to expand its presence in Latin America?

Crespo: This is correct; recently Mexicana Airlines confirmed its alliance with Avianca. At this time, Mexicana is exploring diverse options that could offer our clients outstanding benefits and also expand Mexicana's alliance network.

TW:The new Mexicana Airlines museum sounds interesting. How did you decide that the time was right to open a museum? 

Crespo: After 86 years of uninterrupted service, the items on exhibit reflect many years of hard work and effort on behalf of Mexicana employees, whose desire was to have an area to display the extensive collection of artifacts and memorabilia that portrays Mexicana's history.

TW:What is the name of the museum, and where is it located? Is there a phone number, Web site and street address where visitors can find the museum when visiting Mexico City? 

Crespo: It's the Mexicana de Aviacion Museum. The museum is open to the general public, and guided tours are available on Thursdays from 9 a.m. until 5 p.m. by calling 5786-6511. The address is Avenida 602 No. 161A, Colonia San Juan de Aragon, C.P. 07920, Mexico City.

To contact reporter Mark Chesnut, send e-mail [email protected].

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