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MX CEO: Time To Reconsider AeroMex Merger  
User currently offlineLAXintl From United States of America, joined May 2000, 26025 posts, RR: 50
Posted (6 years 3 months 2 weeks 2 days 13 hours ago) and read 2668 times:

I could certainly see the benefit is a unified strong Mexican carrier these days surrounded by handfull of local LCCs.

Quote:
Mexicana CEO: Time Has Come To Reconsider Aeromexico Merger
08/13/2008

Mexicana’s CEO Manuel Borja said high jet fuel costs and the threat of bankruptcies among less solvent carriers may mean its time to reconsider its merger with Aeromexico.

Recalling that only a year ago Mexicana was ready to buy Aeromexico yet antitrust regulator Cofeco rejected the idea. Per Borja the fuel crisis has shown in just 12 months just how right Mexicana was in wanting to create one strong Mexican airline through a merger like those now rescuing troubled airlines elsewhere in the world.

Merger or no merger, Mexicana however is taking its own steps to face the ongoing crisis. It is reducing capacity in the second half of this year and is also saving money through the use of new technologies in marketing, route selection and airfare options.

Full story (subscription required)
http://www.aviationweek.com/search/A...l/2008/08/13/25.xml&query=mexicana


From the desert to the sea, to all of Southern California
13 replies: All unread, jump to last
 
User currently offlineXA744 From Mexico, joined Mar 2004, 734 posts, RR: 3
Reply 1, posted (6 years 3 months 2 weeks 2 days 10 hours ago) and read 2538 times:

Now this is really an interesting topic on Mexican aviation... It has been so boring these days... Nothing serious and of substance to be discussed ! ! !

I recall having mentioned, about a year ago in some A.Net thread, that the only way by which both Aeromexico and Mexicana could survive in an increasingly hostile and competitive environment, was by merging and thus in this manner being able to create a really solid and viable enterprise.

Excuse me if I may sound pedantic to all of you, my friends at A.Net, but Mr. Borja looks like he is now seeing how things really are, and together with Mr. Azcarraga and fellow memebers of the board at Mexicana, just don't have a choice but to get down to earth....


... No more fallacy and intangible dreaming ! ! !

Best regards

Edited for typo... My apologies.

[Edited 2008-08-14 12:23:29]


No matter how you fly...just never get your wings clipped !
User currently offlineMarcus From Mexico, joined Apr 2001, 1808 posts, RR: 2
Reply 2, posted (6 years 3 months 2 weeks 2 days 9 hours ago) and read 2482 times:

If so then I can see smaller lower cost competitors liek Volaris, Interjet and Alma gaining more market share at the expense of Mexicana, Aeromexico and Aviacsa.

Both AM and MX should concentrate on trunk routes within Mexico and on growing internationally, the onslaught from the LCC is relentless.

I believe is a good business case to have one strong international carrier with a solid national feeder network, not the too fragmented market we currently have.



Kids!....we are going to the happiest place on earth...TIJUANA! signed: Krusty the Clown
User currently offlineFLY2HMO From , joined Dec 1969, posts, RR:
Reply 3, posted (6 years 3 months 2 weeks 2 days 9 hours ago) and read 2441 times:

So what would the new airline be named, AeroMexicana? Big grin

What AM and MX need is a strong management team. They should take lots of hints from Volaris. They're barely 3 years old since they officially started ops and they're already #3 in terms of passengers flown in Mexico. All that thanks to Carlos Slim's infinite wallet (Inbursa), Televisa's marketing, and TACA's technical expertise.


User currently offlineJuventus From United States of America, joined Dec 2004, 2835 posts, RR: 2
Reply 4, posted (6 years 3 months 2 weeks 2 days 9 hours ago) and read 2401 times:

I hope this never happens, if it does, MX/AM will create a monopoly on international flights out of Mexico. Buy Aviacsa, Aerocalifornia, Avolar, but stay clear of each other......

User currently offlineLAXintl From United States of America, joined May 2000, 26025 posts, RR: 50
Reply 5, posted (6 years 3 months 2 weeks 2 days 8 hours ago) and read 2365 times:



Quoting Juventus (Reply 4):
I hope this never happens, if it does, MX/AM will create a monopoly on international flights out of Mexico.

Monopoly hardly.

As you should know there is an abundance of service to Mexico -- look at all the options with basically every US airline offering something to Mexico, while the market is served also by other Central and South American carriers, several European and even an Asian airline.

Personally I agree with Senor Borja and a.net posters such as XA744 and Marcus that Mexico could very much use a strong single international supplemented by a bunch of smaller regional or LCCs.
Look at other nations such as Canada, Australia, France, Germany, Spain etc which after various battles or mergers have settle on a single strong carrier and a bunch of smaller regional players. I think at the end of the day, such a set up would benefit Mexico very much instead of having two trunk carriers bleed.



From the desert to the sea, to all of Southern California
User currently offlineJuventus From United States of America, joined Dec 2004, 2835 posts, RR: 2
Reply 6, posted (6 years 3 months 2 weeks 2 days 8 hours ago) and read 2328 times:



Quoting LAXintl (Reply 5):
Monopoly hardly.

As you should know there is an abundance of service to Mexico -- look at all the options with basically every US airline offering something to Mexico, while the market is served also by other Central and South American carriers, several European and even an Asian airline.

I'm the first one to admit when I'm wrong, and yes you are correct, there weren't be a monopoly on int'l flights out of Mexico. Foreign airlines control 75% of the int'l traffic in and out of Mexico. I guess what I'm trying to say is I'd hate to see the Mexicana or Aeromexico brand disappear.....


User currently offlineGhost77 From Mexico, joined Mar 2000, 5226 posts, RR: 51
Reply 7, posted (6 years 3 months 2 weeks 2 days 4 hours ago) and read 2224 times:



Quoting XA744 (Reply 1):
Excuse me if I may sound pedantic to all of you, my friends at A.Net, but Mr. Borja looks like he is now seeing how things really are, and together with Mr. Azcarraga and fellow memebers of the board at Mexicana, just don't have a choice but to get down to earth....

One word to sum it up... with all respect, he knows shit about aviation. MX is leading in so many areas and they have so many years ahead of many and big strengths, and still Interjet is yet not entering to MEX, they will publish their schedule this Aug 19th 08, and still I repeat, IJ has yet not make appearance. He's such a crying baby for the last weeks.

With big help from Azcárraga, Slim, los Aleman, Banamex and 15 more... they wanted less competition and they won, they have closed A5, JR, Nova, what else they want??? To eliminate Aeroméxico? Volaris? Interjet? Cmm' on!!! Get real and serious.... LEARN something from JJ and LA... ask for help to LA... bring Bethune down... et al...

Borja is an ex Posadas key player, he knows what I lack in the hotel industry...

g77



Ricardo Morales - flyAPM - ¡No es que maneje rapido, solo estoy volando lento!
User currently offlineFyano773 From Mexico, joined Mar 2004, 784 posts, RR: 1
Reply 8, posted (6 years 3 months 2 weeks 1 day 23 hours ago) and read 2096 times:



Quoting LAXintl (Reply 5):
Personally I agree with Senor Borja and a.net posters such as XA744 and Marcus that Mexico could very much use a strong single international supplemented by a bunch of smaller regional or LCCs.

In my opinion, a merger between MX and AM is like a proposal to merge InterJet and Volaris. Borja's comments are driven by chairman Azcárraga's persistence after they failed to purchase AM. If Azcárraga had taken AM instead, we would´t be seeing 787s, 777s, E190s, NRT, PVG, EZE, BCN, FCO, etc. No way!

Quoting LAXintl (Reply 5):
Look at other nations such as Canada, Australia, France, Germany, Spain etc which after various battles or mergers have settle on a single strong carrier and a bunch of smaller regional players. I think at the end of the day, such a set up would benefit Mexico very much instead of having two trunk carriers bleed.

There are many other nations with two o more flag carriers and I don't see a cook recipe to solve the current downturn in the industry.

Fyano773


User currently offlineGhost77 From Mexico, joined Mar 2000, 5226 posts, RR: 51
Reply 9, posted (6 years 3 months 2 weeks 1 day 10 hours ago) and read 1962 times:



Quoting Fyano773 (Reply 8):
There are many other nations with two o more flag carriers and I don't see a cook recipe to solve the current downturn in the industry.

True, and add to that the fact we have lots of beaches, very nice resorts all, 3 big cities and a few more and we double the population of many of those countries. South of USA. Mexico is able to have 2 big carriers and a 3rd is showing up, Volaris.

Before we had MX, AM and GD. Later MX, AM and JR., then MX, AM and 6A. And now we will have MX, AM, Y4 (Volaris) and 4O (Interjet).

g77



Ricardo Morales - flyAPM - ¡No es que maneje rapido, solo estoy volando lento!
User currently offlineEddieDude From Mexico, joined Nov 2003, 7618 posts, RR: 42
Reply 10, posted (6 years 3 months 2 weeks 1 day 10 hours ago) and read 1954 times:



Quoting FLY2HMO (Reply 3):
All that thanks to Carlos Slim's infinite wallet (Inbursa), Televisa's marketing, and TACA's technical expertise.

You have to give some credit to the chairman, Mr. Aspe, too. And it's not a matter of Slim's endless wallet... he has never been shy or hesitant to pull the plug when a business does not perform in line with his expectations. Remember Pastelerías El Globo (sold to Bimbo) and CompUSA (sold for pennies to a liquidator). It goes against his investment policy to inject cash over and over to losing businesses. His merit is how he most of the times really turns around bad businesses that he buys cheap and makes them winners.

Quoting Ghost77 (Reply 7):
He's such a crying baby for the last weeks.

LOL. Well, he may or may not be a crybaby, but he is right in my opinion. The current landscape has changed dramatically from 3 years ago. A merger might not be such a bad idea.

Quoting Fyano773 (Reply 8):
In my opinion, a merger between MX and AM is like a proposal to merge InterJet and Volaris. Borja's comments are driven by chairman Azcárraga's persistence after they failed to purchase AM. If Azcárraga had taken AM instead, we would´t be seeing 787s, 777s, E190s, NRT, PVG, EZE, BCN, FCO, etc. No way!

I definitely like AM's push to become an internationally-focused airline. I really hope they can grow their longhaul fleet and become LatAm's new LA. As a personal comment, if a merger between AM and MX were to happen, I'd actually like to see AM taking over MX, using only the AM brand (the MX brand could be used for the charter division maybe) and furthering the international expansion.



Next flights: MEX-GRU (AM 77E), GRU-GIG (JJ A320), SDU-CGH (G3 73H), GRU-MEX (JJ A332).
User currently offlineGhost77 From Mexico, joined Mar 2000, 5226 posts, RR: 51
Reply 11, posted (6 years 3 months 2 weeks 1 day 10 hours ago) and read 1922 times:



Quoting EddieDude (Reply 10):
LOL. Well, he may or may not be a crybaby, but he is right in my opinion. The current landscape has changed dramatically from 3 years ago. A merger might not be such a bad idea.

Very true the landscape is somehow different to the past, or 3 years ago, but it's always been that day, changing, we can mention 9/11th, Iraq's 2003 war, increase of oil and hassle at US airport and still traffic has shown big increased with the arrivals of Interjet, Volaris, Viva and more.

I think CEO's from MX and AM, Azcarraga with Borja and Conesa both have resulted as big crying babies for the last weeks, all, IMHO of very wrong paradigm's of what's supposed to be Mexico's aviation.

OTOH, we have Interjet, Volaris and Viva, which all are very optimistic for 2 reasons:

1) They know pretty well that MX, AM and 6A have done the things wrong for years.
2) They are confident of a different model and the most important... big passengers volume... scale economies.

As much as I love MX, I'm glad they have more competition in their most important terminal. I would have done now so many different things on MX and QA... only if they were on my hands... perhaps in a few more years  Smile

g77



Ricardo Morales - flyAPM - ¡No es que maneje rapido, solo estoy volando lento!
User currently offlineRojo From Spain, joined Sep 2000, 2476 posts, RR: 9
Reply 12, posted (6 years 3 months 2 weeks 1 day 7 hours ago) and read 1879 times:

Merger or no merger between AM and MX, this two airlines have been doing things wrong for many years and now they are paying the price. The best solution is for one of the CEO's to go public with merger plans. In my opinion, mergers tend to destroy value instead of creating it, but when there is no value (AM and MX book value is close to cero today), it is not difficult to do it. What both airlines need is a strong business plan and to realize that they are competing against airlines like Volaris, Interjet, ALMA and VivaAerobus who have business plans in place and a strategy.

Quoting Ghost77 (Reply 7):
One word to sum it up... with all respect, he knows shit about aviation. MX is leading in so many areas and they have so many years ahead of many and big strengths, and still Interjet is yet not entering to MEX, they will publish their schedule this Aug 19th 08, and still I repeat, IJ has yet not make appearance. He's such a crying baby for the last weeks.

Today, Interjet published MEX schedules. They will fly MEX-CUN, MEX-MTY and MEX-GDL starting August 19 (temporary) just to take over JR slots and later they will release improved schedules for these and other routes, since IJ needs more time to do some marketing and sell seats...

Quoting Ghost77 (Reply 7):
Borja is an ex Posadas key player, he knows what I lack in the hotel industry...

Agree... Borja and Azcarraga thought that running an airline was an easy task... and what a surprise!!!!!! The only problem is that time keeps running...

They have to learn a lot about running an airline, but in the meantime, Azcarraga and investors have lost a lot of $$$$$$ in this venture.

Quoting Ghost77 (Reply 11):
I think CEO's from MX and AM, Azcarraga with Borja and Conesa both have resulted as big crying babies for the last weeks, all, IMHO of very wrong paradigm's of what's supposed to be Mexico's aviation.

The Mexican airline industry needs real aviation experts, not Borja (ex CFO of Posadas) or Conesa (ex SHCP employee). When you don't know about the industry, you try to solve problems the old fashion way = using politics (friends in the government). This is why I applaud the effort made by Volaris and VivaAerobus who have CEO's with a real career in the airline industry (one working for TACA and the other for EasyJet)... so far they are sticking to their strategy and it is working!!

Quoting Ghost77 (Reply 11):
1) They know pretty well that MX, AM and 6A have done the things wrong for years.
2) They are confident of a different model and the most important... big passengers volume... scale economies.

It is time to pay the price of doing things wrong!!


User currently offlineGhost77 From Mexico, joined Mar 2000, 5226 posts, RR: 51
Reply 13, posted (6 years 3 months 2 weeks 1 day 5 hours ago) and read 1837 times:



Quoting Rojo (Reply 12):
Merger or no merger between AM and MX, this two airlines have been doing things wrong for many years and now they are paying the price. The best solution is for one of the CEO's to go public with merger plans. In my opinion, mergers tend to destroy value instead of creating it, but when there is no value (AM and MX book value is close to cero today), it is not difficult to do it.

Totally, but you're forgetting something my friend, the pride and the lack of knowledge of this industry. Were a merger would be seen as a real and good solution in the north or countries where there are too many airlines and its normal to see some falling and debilitating but very important and sometimes useful to merge in order to get a strong market share which in this industry it's very important.

In that case, a WISE merger would be something like MX+ Interjet or Volaris and it would be great to trade Airbuses, I.E. transfer IJ's A320s to MX mainline and in return give them A319s for all LCC's operations and certainly let Click go and wiser to let work alone each administrations as separate entities and just trying to avoid competition between them and create a plan to destroy the rest with IJ's model which is a fresh new model.

MX and AM is like mixing water with oil. MX only thing they could envy AM is their 4 B777s and its long haul destinations, the rest, is in a way, still is being handed OK.

Quoting Rojo (Reply 12):
Today, Interjet published MEX schedules. They will fly MEX-CUN, MEX-MTY and MEX-GDL starting August 19 (temporary) just to take over JR slots and later they will release improved schedules for these and other routes, since IJ needs more time to do some marketing and sell seats...

Right, and they will have an important number of frames in MEX and more destinations to be announced on September 1st. Here's a little more info for those interested:

http://www.apm-group.com.mx/foro/phpBB2/viewtopic.php?t=240&start=17
http://www.apm-group.com.mx/foro/phpBB2/viewtopic.php?t=57&start=34

Quoting Rojo (Reply 12):
The Mexican airline industry needs real aviation experts, not Borja (ex CFO of Posadas) or Conesa (ex SHCP employee). When you don't know about the industry, you try to solve problems the old fashion way = using politics (friends in the government).

1) You go for the old fashion way...
2) They have surely spent a lot of time learning first, what's going on inside their own airline...
3) Trying to figure out what's going on outside their own airline...

And after all this time, I'm sure both lack sooo many knowledge of how industry has work today and since deregulation.

MX fired some key people which new a lot and probably all money invested in consulting is less worth of what many new. If I were Posadas, I would have brought Flores back for help instead.

But they will pay for their errors...  Smile

Quoting Rojo (Reply 12):
This is why I applaud the effort made by Volaris and VivaAerobus who have CEO's with a real career in the airline industry (one working for TACA and the other for EasyJet)... so far they are sticking to their strategy and it is working!!

That's affirmative, still many wonder why Volaris and Viva are doing so nice fully, its no magic nor a miracle, and why Interjet is doing so fine too...?? Well they are thanking a lot all ex. MX and AM people they let go.

Quoting Rojo (Reply 12):
It is time to pay the price of doing things wrong!!

True and AM is already paying that price...

http://www.apm-group.com.mx/foro/phpBB2/viewtopic.php?t=242

Hence fore the big necessity to start acting political and try to fade competition the easy way...

Magni, Avolar, AeroCalifornia and Nova Air and lets see who else is on that list...

g77



Ricardo Morales - flyAPM - ¡No es que maneje rapido, solo estoy volando lento!
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