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Experts In Mexico Encouraging A MX-AM Merger  
User currently offlineJuventus From United States of America, joined Dec 2004, 2835 posts, RR: 2
Posted (5 years 1 month 1 week 2 days 15 hours ago) and read 3265 times:

article in Spanish

http://eleconomista.com.mx/notas-onl...-puerta-fusion-mexicana-aeromexico

In a nutshell, the article says due to the global reccession now in progress, which means less people traveling, both airlines would benefit from a merger of the two. Both could create a stronger and healthier international carrier, and would be easier to get financing.

What I get from the article- Mexicana has a good business model, and its financially stable, it looks like they're going to be just fine. Aeromexico is struggling and needs a merger or else... These aviation experts think Mexicana is well positioned and "will survive"... Aeromexico is "swimming against the current"


opinions are welcome

26 replies: All unread, showing first 25:
 
User currently offlineDeltaMD90 From United States of America, joined Apr 2008, 7276 posts, RR: 52
Reply 1, posted (5 years 1 month 1 week 2 days 14 hours ago) and read 3215 times:

Anyone have any idea what this would mean for the alliances?


Ironically I have never flown a Delta MD-90 :)
User currently offlineGhost77 From Mexico, joined Mar 2000, 5197 posts, RR: 51
Reply 2, posted (5 years 1 month 1 week 2 days 14 hours ago) and read 3202 times:

MX is joining 1W, MX stays, and AM would leave Skyteam.

What it would be interesting, is if the government would allowed 2 brands to stay, that way MX and AM could stay/secure privileged/key routes, i.e. MEX-LAX due to the bilateral.

What it would be amazing it would the the aircraft types...

03 CRJ200ER
35 E145
06 E190
25 F100
10 A318
21 A319
29 A320
43 B73G/8
05 B762 (MX has CF's and AM is PW)
05 B763 (same here)
02 A332
04 B772

Total: 188 aircraft

To deliver:

12 CRJ200ER
07 E145
10 E190
25 Boeing 717
10 B737-700
02 A332
05 B787

Total: 69 aircraft

What a mix!!!

We're just only missing Russian!!

g77



Ricardo Morales - flyAPM - ¡No es que maneje rapido, solo estoy volando lento!
User currently offlineN623JB From United States of America, joined Sep 2007, 703 posts, RR: 0
Reply 3, posted (5 years 1 month 1 week 2 days 14 hours ago) and read 3199 times:

Did you miss the A330 for the current fleet? I believe Mexicana has the A330 now.


Bring JetBlue To Mexico City! (TLC and/or MEX would be great)
User currently offlineNAVEGA From United States of America, joined Nov 1999, 741 posts, RR: 0
Reply 4, posted (5 years 1 month 1 week 2 days 13 hours ago) and read 3171 times:

I have for a long time been a supporter of such a move...

I see beyond the individual company romanticism and see it as a necessary business move.

Both companies have fought and competed with each other for many, many years and
have disregarded other competition allowing US and other Mexican airlines to grow and prosper instead.

I have always believed that ONE great airline in Mexico can these two carriers make. If they
merge that will be great, if they don't, there is a good change one will survive and the other disappear.

This is a very interesting scenario to keep a watch on....


User currently offlineGhost77 From Mexico, joined Mar 2000, 5197 posts, RR: 51
Reply 5, posted (5 years 1 month 1 week 2 days 13 hours ago) and read 3159 times:



Quoting N623JB (Reply 3):
Did you miss the A330 for the current fleet?

I didn't!

Quoting NAVEGA (Reply 4):
I have always believed that ONE great airline in Mexico can these two carriers make. If they merge that will be great, if they don't, there is a good change one will survive and the other disappear.

And if they disappear it's not because of Mexico's market or economy, it was AM's admin inefficiency!!!

g77



Ricardo Morales - flyAPM - ¡No es que maneje rapido, solo estoy volando lento!
User currently offlineAM744 From Mexico, joined Jun 2001, 1752 posts, RR: 0
Reply 6, posted (5 years 1 month 1 week 2 days 13 hours ago) and read 3144 times:

My take on this:

- Incompatible fleets.
- What will happen when the economy recovers? Will we be kept on the sidelines looking how foreign carriers increase their market share MEX-elsewhere? It's pretty tough as it is now, let alone with only one long haul carrier.


User currently offlineIAD380 From United States of America, joined May 2006, 804 posts, RR: 0
Reply 7, posted (5 years 1 month 1 week 2 days 11 hours ago) and read 3081 times:

In my opinion, a merger makes sense for international routes. However, would a merger result a near monopoly on domestic routes? When the economy improves, would the merged airline face strong competition on domestic routes? If not, Mexico's large domestic aviation market may be plagued with high fares and inefficient service.

User currently offlineSeemyseems From United Kingdom, joined Jan 2009, 967 posts, RR: 7
Reply 8, posted (5 years 1 month 1 week 2 days 10 hours ago) and read 3045 times:



Quoting Ghost77 (Reply 2):

Wouldn't they join SkyTeam, as AM is Mexico's national airline and the biggest (not in term of fleet).

I think it would just be easier if they joined Sky.



seemyseems
User currently offlineGhost77 From Mexico, joined Mar 2000, 5197 posts, RR: 51
Reply 9, posted (5 years 1 month 1 week 2 days 10 hours ago) and read 3018 times:



Quoting Seemyseems (Reply 8):
Wouldn't they join SkyTeam, as AM is Mexico's national airline and the biggest (not in term of fleet).

In terms of passengers, MX is bigger 2007,8 and 9. And in the 90s MX was also bigger and before that since 1921, Mexicana is/has been Mexico's flag carrier.

g77



Ricardo Morales - flyAPM - ¡No es que maneje rapido, solo estoy volando lento!
User currently offlineFLY2HMO From , joined Dec 1969, posts, RR:
Reply 10, posted (5 years 1 month 1 week 2 days 10 hours ago) and read 3007 times:



Quoting AM744 (Reply 6):
- Incompatible fleets.

That seems like a huge issue in my eyes. AM is mostly Boeing, and MX is mostly Airbus.

Quoting IAD380 (Reply 7):
However, would a merger result a near monopoly on domestic routes?

I'm sure it would. There is a monopoly at some airports nowadays anyways, i.e. at HMO, AM has the most flights.

On the flipside, the new guys (Volaris and Interjet) seem to be doing well so I'm sure they'd be worthy competitors to one big national mega airline.


User currently offlineHloutweg From United States of America, joined Aug 2007, 199 posts, RR: 0
Reply 11, posted (5 years 1 month 1 week 2 days 10 hours ago) and read 3003 times:

What aviation experts are these?

I don't think an alliance can't do what a merger would without wiping competition. In a country with roughly a third of the population of the United States, the idea that the market can't sustain two major airlines is not all correct.

Can someone pinpoint exactly how Mexicana's 'looking up' model is much better than Aeromexico's 'dissapointing' model?

What I'm sure it's happen even in the times in which both airlines were commonly owned, is that they failed to expand their operations beyond the United States and Canada and providing only a handful of other flights to Latinamerica. This has changed, specially dramatically, since their privatization, but because they and the government did not consider developing sustainable markets that don't depend all alone of the Mexican traveling to the United States. It wasn't till the LCCs came into play that they started to suffer if not worry.

They need to take on the LCCs.



In Varietate Concordia
User currently offlineJuventus From United States of America, joined Dec 2004, 2835 posts, RR: 2
Reply 12, posted (5 years 1 month 1 week 2 days 9 hours ago) and read 2990 times:



Quoting Ghost77 (Reply 2):
What it would be amazing it would the the aircraft types...

03 CRJ200ER
35 E145
06 E190
25 F100
10 A318
21 A319
29 A320
43 B73G/8
05 B762 (MX has CF's and AM is PW)
05 B763 (same here)
02 A332
04 B772

Total: 188 aircraft

To deliver:

12 CRJ200ER
07 E145
10 E190
25 Boeing 717
10 B737-700
02 A332
05 B787

Total: 69 aircraft

What a mix!!!

Agree, this is not a logical merger at all. Too many aircraft types, Aeromexico is virtually all Boeing and Embraer, Mexicana is the complete opposite, Airbus and Embraer (exept the 25 B717s). NOT A GOOD MIX at all.

Personally I'd hate to see the Aeromexico brand disappear, I grew up with that, its part of Mexico's identity....

I wish AM's management would study LAN's management, maybe learn how to properly run an airline.


User currently offlineJuventus From United States of America, joined Dec 2004, 2835 posts, RR: 2
Reply 13, posted (5 years 1 month 1 week 2 days 8 hours ago) and read 2955 times:

Well it only took a couple of hours to get a response from Mexicana. Just hours after some aviation experts said a Mexicana-Aeromexico merger would be the next logical step, Mexicana's management spoke to the media, "there's room for two int'l carriers in Mexico, Mexicana DOES NOT NEED or want a merger"...

Its all for the best, we all know what can happen when a healthy airline gets engaged with a struggling one, we all remember the Canadian and Air Canada merger.

here's the link
http://eleconomista.com.mx/notas-onl...olineas-troncales-gaston-azcarraga


User currently offlineNAVEGA From United States of America, joined Nov 1999, 741 posts, RR: 0
Reply 14, posted (5 years 1 month 1 week 2 days 8 hours ago) and read 2939 times:



Quoting Juventus (Reply 13):

Juventus,

This does not sound good for Aeromexico. They are very vulnerable at this most difficult
moment. I thought that maybe another airline in Mexico would buy them and therefore
rescue them but after reading what you posted from the Economista, I don't think so.

Hopefully they can restructure and come out of this fine..


User currently offlineN328KF From United States of America, joined May 2004, 6482 posts, RR: 3
Reply 15, posted (5 years 1 month 1 week 2 days 7 hours ago) and read 2898 times:

Maybe both companies are looking in the wrong direction for a merger. Perhaps both carriers should pick a partner outside of Mexico (but elsewhere in the Americas.)


When they call the roll in the Senate, the Senators do not know whether to answer 'Present' or 'Not guilty.' T.Roosevelt
User currently offlineLipeGIG From Brazil, joined May 2005, 11365 posts, RR: 59
Reply 16, posted (5 years 1 month 1 week 2 days 7 hours ago) and read 2893 times:
AIRLINERS.NET CREW
FORUM MODERATOR



Quoting Juventus (Reply 12):
Agree, this is not a logical merger at all. Too many aircraft types, Aeromexico is virtually all Boeing and Embraer, Mexicana is the complete opposite, Airbus and Embraer (exept the 25 B717s). NOT A GOOD MIX at all.

Besides the fact of the fleet being so different, what about competition, and also the jobs (considering 2 administrative staffs). This seems to be a good merger only for shareholders because passengers and staff probably will pay all the costs.
Does Mexican Authorities would approve such merger ??



New York + Rio de Janeiro = One of the best combinations !
User currently offlineJuventus From United States of America, joined Dec 2004, 2835 posts, RR: 2
Reply 17, posted (5 years 1 month 1 week 2 days 6 hours ago) and read 2858 times:



Quoting LipeGIG (Reply 16):
Besides the fact of the fleet being so different, what about competition, and also the jobs (considering 2 administrative staffs). This seems to be a good merger only for shareholders because passengers and staff probably will pay all the costs.
Does Mexican Authorities would approve such merger ??

Not sure if the Mexican Authorities would approve this merger, but you are correct, this would create another monopoly (international flights) if approved, plus all the job losses.

Quoting NAVEGA (Reply 14):
Juventus,

This does not sound good for Aeromexico. They are very vulnerable at this most difficult
moment. I thought that maybe another airline in Mexico would buy them and therefore
rescue them but after reading what you posted from the Economista, I don't think so.

Hopefully they can restructure and come out of this fine..

My reference was to the Air Canada-Canadian merger. A good friend of mine flies for Air Canada. He said back in the 90s Air Canada was financially healthy, and stable. Then came the merger with Canadian, they inherited Canadian's aircraft and debt, that merger really hurt Air Canada, financially speaking.... I'm not sure if the same happened in Brazil, I don't think GOL experienced the same when they inherited Varig's debt... But a bad adquisition can hurt a healthy airline like MX.

I do hope Aeromexico gets some kind of help, maybe a new management, but I most definetly want them around for many, many years... How many Mexican brands are better known around the world than Aeromexico's? a few, but not many


User currently offlineTimeToFly From United States of America, joined Mar 2007, 34 posts, RR: 0
Reply 18, posted (5 years 1 month 1 week 2 days 6 hours ago) and read 2835 times:

The possibility of such merger poses a terrible threat: Passengers paying exhorbitant fares for domestic flights -even more expensive than the present ones on routes where LCC's haven't entered.
While it may be true that both airlines "only" concentrate 48% of the domestic market -as pointed by former Mexican Secretary of Communications Luis Tellez- the truth is that both AM and MX have a dominant power in the industry. And both airlines don't give a second thought before expoliating rent from passengers in those markets where competition is limited or nonexistent.
Has anybody ever thought why is it twice or thrice more expensive to fly to CTM than CUN even when the distance and operational costs are the same? But MX and Aviacsa can fix fares as they please, and hence, a roundtrip ticket MEX-CUN may be 100+taxes while a MEX-CTM is never below 200+taxes. And the same has always happened with LTO and -since Aerocalifornia is only a memory- LAP (when compared with fares to SJD) or PXM when compared with fares to OAX or ACA.
I seriously doubt that the Comisión Federal de Competencia will ever authorize a merger like the one discussed here as long as the market remains in the present conditions, and as long as Mexico City's airport keeps posing entry barriers to other airlines.
For passengers, this would be a sad happening.

Quoting Juventus (Reply 17):
How many Mexican brands are better known around the world than Aeromexico's?

Corona and probably Negra Modelo would be my guess.........
And surely José Cuervo


User currently onlineFlaps From United States of America, joined Feb 2000, 1227 posts, RR: 4
Reply 19, posted (5 years 1 month 1 week 2 days 5 hours ago) and read 2800 times:



Quoting Juventus (Reply 17):
My reference was to the Air Canada-Canadian merger. A good friend of mine flies for Air Canada. He said back in the 90s Air Canada was financially healthy, and stable. Then came the merger with Canadian, they inherited Canadian's aircraft and debt, that merger really hurt Air Canada, financially speaking.... I'm not sure if the same happened in Brazil, I don't think GOL experienced the same when they inherited Varig's debt... But a bad adquisition can hurt a healthy airline like MX.

I think that the above is an excellent example. I find it exceedingly difficult to see any positives for anyone in a combined AM/MX.


User currently offlineItalianFlyer From United States of America, joined Nov 2007, 1077 posts, RR: 2
Reply 20, posted (5 years 1 month 1 week 2 days 4 hours ago) and read 2762 times:

IMHO AM has not been helped by its SkyTeam membership very much. DL/DLC has made it clear that they can handle US-Mexico traffic themselves, thank you very much....kind of squeezing their partner out. Now what would be interesting is if AM were to get in cahoots with COPA (another Boeing and E-jet airline) that is well run thanks to its CO ties. That would be a brand to be reckoned with.

User currently offlineCX340 From Mexico, joined Sep 2000, 609 posts, RR: 3
Reply 21, posted (5 years 1 month 1 week 2 days 4 hours ago) and read 2754 times:

First, opinions from these so-called "experts" need to be taken with a grain of salt. Most of these firms make statements like these based on little study and knowledge of the industry, and cannot really tell the difference between an airline and a car manufacturer's business plan, let alone the difference between an A330 and a 777. They are, mostly, trying to sell their services.

Second, let's get one thing clear: Mexicana may indeed have a better financial, cash and operational position that AM at this junction, but such position is BY NO MEANS healthy in all respects. In other words, it is not like MX is in the best position to go out and spend time, efforts and money in a merger that would be nothing less that titanic, given the multiple known factors (ie. fleet, busines models, unions, costs, etc) that are in play - but also all of the "unknowns". Also remember that Mexicana has quite a heavy bank debt and its creditors may not be keen on having Mexicana absorb AM and all of its problems; like in most of these situations, creditors will need to sign off such a merger.

Finally, IMHO, MX is just waiting to see AMs next move. If things continue to be the way they have been at AM for the past few months, it is only logical that AM will eventually run out of cash and be unable to operate. . .and MX might just be there to pick up the assets, without their problems. Who knows. . .


User currently offlineNAVEGA From United States of America, joined Nov 1999, 741 posts, RR: 0
Reply 22, posted (5 years 1 month 1 week 2 days 3 hours ago) and read 2722 times:



Quoting Juventus (Reply 17):
How many Mexican brands are better known around the world than Aeromexico's? a few, but not many

Patron Tequila.......................

Don Julio Tequila.......


User currently offlineAM744 From Mexico, joined Jun 2001, 1752 posts, RR: 0
Reply 23, posted (5 years 1 month 1 week 1 day 13 hours ago) and read 2545 times:



Quoting Hloutweg (Reply 11):
is that they failed to expand their operations beyond the United States and Canada and providing only a handful of other flights to Latinamerica

I wouldn't say they failed. They didn't try at all, being all comfy with their Mexico and US flights (not even Canada) and finally looking beyond their noses when new competition on the domestic turf arose. Of course, I don't condone that lack of foresight.


User currently offlineNAVEGA From United States of America, joined Nov 1999, 741 posts, RR: 0
Reply 24, posted (5 years 1 month 6 days 14 hours ago) and read 2329 times:

Over the past 3 days have been reading in APM forums from Mexico, that Mexicana
owners say that they did want too purchase Aeromexico but the Mexican Government would not let them and that now because of AM finances they are not interested, and then that MX has hired a Bank to investigate AMs finances for the possibility of a purchase etc. etc., etc.

Is there any truth behind this or is this just a rumor ???


25 Juventus : I read on this forum Mexicana though about buying Aeromexico a few years back.. But at present it does look like Mexicana wants nothing to do with Ae
26 NAVEGA : Thanks Juventus, The last posting I read in APM said tha Mexicana is indeed interested etc. Hope we hear more news about this. I do agree that it woul
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