aviogenex
Posts: 61
Joined: Sat Mar 30, 2002 12:34 pm

RJ's In Mexico

Tue Apr 02, 2002 11:31 am

Since Mexico is a relatively poor country and only 1 to 2% of the population can travel by air: Wouldn't it be smart to establish a regional airline that can operate Regional Jets or Turboprops out of Mexico City to all the small towns and villages where there is no need to send a B737 or a MD80?
It really doesn't make any sense to me cos' airlines in Mexico are complaining that they have poor load factors in their aircraft on several destinations and instead of trying to acommodate a proper size of aircaft (like a RJ's or Turboprops) to the route they keep sending MD80's or B737's . I think they should aquire RJ's or Turboprops in order to keep operating where they are operating without loosing more money.

AVIOGENEX
 
thomasphoto60
Posts: 3686
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RE: RJ's In Mexico

Tue Apr 02, 2002 11:44 am

What about Aeromar and Aeroliterol (Aeromexico afflilites), these guys fly Saabs, ATRs, ect.....

Thomas
"Show me the Braniffs"
 
LatinPlane
Posts: 2471
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RE: RJ's In Mexico

Tue Apr 02, 2002 12:50 pm


I think that the 1-2% estimate is wrong, the country is rather poor but there is still a sophisticated domestic airline route system. However, air travel might not be as popular as in other countries in Latin America because Mexico has a good private highway system and the country isn't situated around high mountains or jungles like Colombia, Bolivia and Brazil.

Mexico is behind the regional jet age by around 10 years. However, RJ's are a newer concept and are quite expensive. RJ's are made to serve high yield business travelers who want the comfort of jet service for smaller segment routes. I believe that only two airlines can profitably fly RJ's on domestic routes, namely, Aeromar and Aerolitoral, who tend to focus on the business travelers.

The smaller Mexican airlines like: AeroCalifornia, Aviacsa, Aerolineas Internacionales and others are just not strong enough to front the cost of new aircraft. These carriers can only afford to get really old cheap aircraft like: 732s, 727s, DC-9s, which can be leased at really good affordable prices. Their intention is to serve the domestic market by offering cheap seats (compared with Cintra's airlines) and the migrant workers flying back home from the border cities.

 Smile LatinPlane





Pan Am - The World's Most Experienced Airline.
 
Flying-Tiger
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RE: RJ's In Mexico

Tue Apr 02, 2002 6:28 pm

I remember that Cintra and Aerolittoral had already expressed interest in RJs; Aerolittoral in the 328JET/ERJ-135 and Cintra in large RJs. But nothing ever happened.

Regards
Flying-Tiger
http://fly.to/rorders
Flown: A319/320/321,A332/3,A380,AT4,AT7,B732/3/4/5/7/8,B742/4,B762/763,B772,CR2,CR7,ER4,E70,E75,F50/70,M11,L15,S20
 
Markus
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RE: RJ's In Mexico

Tue Apr 02, 2002 6:50 pm

Some of these airlines might be interested in some of the 'older' RJ's that US regionals will be getting rid of when newer and better ones begin to arrive. For example, Continental Express has about 25 ERJ-145ER's that they might want to unload as the newer LR and XR's arrive on property.

Cheers,
Markus

Work smart
Not hard
 
ghost77
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RE: RJ's In Mexico

Wed Apr 03, 2002 1:20 pm

AVIOGENEX,

What a poor comment and VERY OLD statidistic table of the 1 or 2% flying in the country.

ghost77  Smile
Ricardo Morales - flyAPM - ¡No es que maneje rapido, solo estoy volando lento!
 
IB6400
Posts: 239
Joined: Tue Jun 01, 1999 12:21 pm

RE: RJ's In Mexico (Rojo, Read This...)

Wed Apr 03, 2002 3:31 pm

Hi!

I think some of you guys are missing a point here...
Riad (Aviogenex) clearly stated: "Wouldn't be smart to start a new Regional airline in Mexico? Wouldn't be nice the idea of having regional jets flying the Mexican skies where there is no need of flying a 737 or MD-80?" I don't think he ever said something about why Internacionales, Aerocalifornia or whatever are not buying regional jets...

I think it's a good idea with a good planification of the airline. Focusing on what customers really need, I would bet for business travelers. Look at Aeromar, a great airline. I think Aeromar could really boost on some routes with Regional Jets.

What is Southern Winds doing in Argentina?

Rojo PLEASE post a reply for this topic, Seriously I would be very pleased reading your comments about this.

(By the way I love what I am studying!!)

Ricardo (Ghost 77) I am really surprised with the quality of your last post. Instead of saying how poor is Riad's post or how wrong the statistics are, why don't you post the real numbers on which part of the population could really fly? Ask Mr. Cerisola Weber, he could help you. Please think before you write, be responsible on your thoughts.

Joaquín  Smile
Mexico City

"Yo soy yo más mis circunstancias"
·Ortega y Gasset·
Yo soy yo más mis circunstancias - J. Ortega y Gasset
 
LatinPlane
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RE: RJ's In Mexico

Wed Apr 03, 2002 5:13 pm

Well, if the statistics are correct and only 1-2% of the 101,879,171 Mexican population (according to statistical data from the Mexican census bureau) that would mean that only about 2-3 million Mexicans are able to fly. Why would anyone then try to establish a new airline flying regional jets.

I must say that I've seen (rather) heard the same numbers from news reports on television, but it just doesn't make clear sense (to me) when I also understand that just MEX city alone handles 20 million passengers per year (of course, considering that it's the main gateway to the country) and what about the rest of the country. However, don't take my word for it, I could be extremely ignorant about the facts since I don't live in the country. And don't anticipate a new airline to start service in Mexico, I found out not long ago that VuelaMex is dead. If the RJ's will ever be flying with Mexican flags, I suspect that they will also hold the colors and logos of Aerolitoral and AeroMar.

I for one would love to see a brand new EMB-170 flying in Aerolitoral or AeroMar colors any day, but I'm not holding my breath for it to happen. As a stated before, business travelers still constitute a small minority of all passengers in the domestic scene.

But then again, nothing is written in stone!





 Smile LatinPlane
Pan Am - The World's Most Experienced Airline.
 
Flying-Tiger
Posts: 3923
Joined: Mon Aug 23, 1999 5:35 am

RE: RJ's In Mexico

Wed Apr 03, 2002 5:25 pm

Aviogenex + Latinplane: do you think that leasing is an option for them? There are quite a few new RJs of various sizes available from the big lessors in the coming years - and most are not yet placed with an airline. Is this an option to replace DC-9s and B737s? Maybe, future will tell.

Establishing a new regional airline makes only sense when you can grab high-yield traffic, otherwise you will have low yields on comparably high cost (per seat) planes.

Regards
Flying-Tiger
http://fly.to/rorders
Flown: A319/320/321,A332/3,A380,AT4,AT7,B732/3/4/5/7/8,B742/4,B762/763,B772,CR2,CR7,ER4,E70,E75,F50/70,M11,L15,S20
 
LatinPlane
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RE: RJ's In Mexico

Wed Apr 03, 2002 5:39 pm

IB6400:

Oh yeah, and Aviogenex didn't say anything about Aerocalifornia, Aerolineas or any other airline,I did, but he did say "airlines in Mexico are complaining that they have poor load factors in their aircraft on several destinations and instead of trying to acommodate a proper size of aircaft (like a RJ's or Turboprops) to the route they keep sending MD80's or B737's ." So obviously he was refering to those airlines.

Flying Tiger:

I believe that these airlines will consider leasing some RJ's in the next few years as they realise that they need to upgrade their equipment to better compete with the American regional airlines. But like I said, the Mexican regionals are a few years behind so it we'll just have to wait and see.

 Smile LatinPlane
Pan Am - The World's Most Experienced Airline.
 
aviogenex
Posts: 61
Joined: Sat Mar 30, 2002 12:34 pm

RE: RJ's In Mexico

Thu Apr 04, 2002 3:27 am

Maybe I didn't made myself clear but I think something like a Southwest in Mexico using RJ's in Mexico would be wise, of course with a good planning and good management.
By charging fair prices and flying a comprehensive route system people will be encouraged to fly more and so that figure of 1 to 2% of the population will change.
And belive me I know the figures and so IB6400.

And belive me guys a lot of the traffic at Mexico City airport is international (watch it I didn't say all of it).
 
MX-757
Posts: 63
Joined: Thu Dec 23, 1999 1:35 pm

RE: RJ's In Mexico

Thu Apr 04, 2002 5:09 am

Yeah, you're all right, Regional Low fare Airlines are so necessary right now in Mexico. Ticket prices on major airlines are just too high and flying travel isn't as popular as in other countries. I mean, people thinks twice before considering traveling by plane. That's a reality.

Regional service with more extensive routes would be great. Not to forget low fares.

So, for me the best thing for Aerolitoral and Aeromar would be improving their fleet, service and expand routes. This isn't utopic, it's just a fact to consider by this airlines.

For example, there was a MD 80 flying from my city (Tepic, Nayarit, Mexico) to Mexico City and I still don't know if this service stopped or what, but a new ATR 42 service by Aeromar is now working. I think an ATR 42 covers the demand for my city. Or maybe the AeroMexico MD 80 is still flying and this regional plane (Aeromar) was added to meet the increase of traffic.
BTW, Aerocalifornia also serves the MEX-TPQ route and it is quite good.
 
MX-757
Posts: 63
Joined: Thu Dec 23, 1999 1:35 pm

Flight Confirmation MEX-TQP-TIJ?

Thu Apr 04, 2002 5:12 am

BTW, can someone confirm me if AeroMexico flight MEX-Tepic-TIJ is still operating?

Thanks in advance.
 
cx340
Posts: 518
Joined: Sat Sep 02, 2000 2:59 am

RE: RJ's In Mexico

Thu Apr 04, 2002 7:53 am

I don't think the figure of 1-2% of the population is correct. I would beleive that a figure of around 10% would be more believable. But I won't stand by that figure until I can confirm it, since we all like facts and not ideas.

P.D. Like Latinplane said, MEX alone handles more than 21 million passangers a year. It is currently No. 38 in the world.
 
AMX
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RE: RJ's In Mexico

Thu Apr 04, 2002 9:16 am

I believe that 1-2% of Mexicans do fly each year, face it, there are almost 40 million people in living in extreme poverty in this country (which obviously don't fly), the 60 million left are classified as poor, middle, upper middle and upper class.

What Mexico really does need is to LOWER aviation-related taxes!! A Mexican plane ticket is divided into three parts: federal taxes, airport-related taxes, and the airline's fare. If the government commits to lower its taxes and the airport's reconsider valuating their landing fees, etc., more people would actually start flying!

What frequent fliers in Mexico want is an airline that would offer direct flights to its destination with no lenghty connections in the airline's hub, which usually is the monopolistic and rather far (for northern cities)Mexico City Intl Airport. Also, with relatively new and modern airplanes! with COMPETITIVE fares, not monopolistic ones!

Aerolitoral is doing a fine job, for example, but I think the airline has long routes operating with its biggest aircraft: the SAAB 340B. That's why they should get CRJ's or EMB's.


AMX
Arriba Sonora!!!
 
ghost77
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RE: RJ's In Mexico

Thu Apr 04, 2002 9:43 am

Joaquin, (IB6400)

Well I think I didn´t expressed myself correct. What I wanted to said was, that AVIO´s comment wasn´t poor, the poor thing I was refering to was the 1-2% stadistic flying in the country. Don´t have correct stats but I think it´s a higher number. BUT also there´s a change I´m wrong i just make a quick visit to Cintra´s website and these were the stats:

Spanish:
http://www.cintra.com.mx/espanol/accionist/operfin/meses01.htm

English:
http://www.cintra.com.mx/cintra_e/espanol/accionist/operfin/meses01.htm

Datos Operativos y Financieros por trimestre:
http://www.cintra.com.mx/espanol/accionist/operfin/trim01.htm

Quarter Operative & Financial stats:
http://www.cintra.com.mx/cintra_e/espanol/accionist/operfin/trim01.htm

Maybe the one with the poor comment was me and I accept it... but I think ROJO will be the best to comment.

About RJ´s in Mexico, I heard Aeromas was very interested. When we less expect maybe they will be flying them.

ghost77  Smile

Ricardo Morales - flyAPM - ¡No es que maneje rapido, solo estoy volando lento!
 
ghost77
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RE: RJ's In Mexico

Thu Apr 04, 2002 9:51 am

MX-757,

AFAIK AM still flies the route with MD80 MEX-TNY. Don´t know if it still continue to TIJ.

ghost77  Smile
Ricardo Morales - flyAPM - ¡No es que maneje rapido, solo estoy volando lento!
 
ghost77
Posts: 4458
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RE: RJ's In Mexico

Thu Apr 04, 2002 10:01 am

AMX,

Compadre, you touch a very good point... TAXES at MEXICO. And what person better than you while you sometimes have to travel from your city to MTY connecting at MEX.

That´s one of the main problem most of us have all the time you paid very expesive taxes while you travel. From the ticket cost around the 25 to 35% of the ticket is destinated to pay the high taxes. Almost all the people it´s against the TUA (Tarifa de Uso de Aeropuerto) while you fly domestic... it would be ok if they charge while you are flying International but you know how things are in Mex. Also specially Cancun it´s on the top 10 list of worldwide airport most expensive to land  Sad .

ghost77  Smile
Ricardo Morales - flyAPM - ¡No es que maneje rapido, solo estoy volando lento!
 
aviogenex
Posts: 61
Joined: Sat Mar 30, 2002 12:34 pm

RE: RJ's In Mexico

Thu Apr 04, 2002 10:53 am

AM,

You're making a good pointhere. For AMX I totally agree with the statement you made about saying that Aerolitoral should use RJ's in the higher capacity routes where the 340's are too small or just not suitable for the route. And about the Taxes, it is unbelivably crazy how much taxes (mexican passengers like me) have to pay every time (naturally) we want to travell.

Cheers,
Aviogenex

P.S. I am gonna check the 1 to 2% figure again, I think I am wrong. But I don't think that percentage won't rise way too much.
 
IB6400
Posts: 239
Joined: Tue Jun 01, 1999 12:21 pm

RE: RJ's In Mexico

Thu Apr 04, 2002 12:32 pm

Hi!

Ricardo (Ghost 77):
It's very nice to talk and set things the proper way... Courtesy. Thanks!  Smile

And on the statistics...

I bet the real numbers of the statistics concerning the percentage of people in Mexico are very close to the 2% or even the 5% of the population.

The hint is seeing thru Mexico City, Guadalajara or Monterrey. These cities are not the entire country. There is a lot of land in this country where there are, as AMX said 40 millions in extreme poverty.
Most of the people's main way of transportation is by bus service. I am sure is the most popular way of transportation for a large part of the population.
Ask why many people and I guess a lot of Mexican users in this forum use a bus or a car instead of an airplane in the Mexico - Acapulco route... It's slower but cheaper. Ask why many people move in the Guadalajara - Puerto Vallarta route by roads (not even highways) instead of the Aerolitoral flight from GDL to PVR.
There is also a Mexico City - Tijuana bus service, that's about 2500 kms. or in other words a ride of two days.

So think about it... You'll see what I am talking about.

What this country and I guess the most part of Latinamerica (if not all) needs are better goverments who can help the airline industries and boost the passanger and cargo services.

Joaquín  Smile
Mexico City

"Yo soy yo más mis circunstancias"
Ortega y Gasset
Yo soy yo más mis circunstancias - J. Ortega y Gasset
 
cx340
Posts: 518
Joined: Sat Sep 02, 2000 2:59 am

RE: RJ's In Mexico

Thu Apr 04, 2002 12:46 pm

Well guys, I was looking at some statistics from the SCT and the National Immigration Institute, and they show that during the year 2000, approximately 58 million passangers traveled through air in the whole country. About 21 million of those internationally.

According to INAMI, around 16 million forms of entry top the country were filed throughout Mexico, and roughly 58% of those at airports, which accounts for about 9 million at airports, but these are just forms of entry, so they are only counting the flights into Mexico, and not the flights going abroad, so I figure that most foreigners went back to their countries and most mexicans returned to Mexico, so I would say the 9 million figure should be multiplied times 2 and then you tentatively would have about 18 million immigration forms and therefore passangers entering and exiting the county during 2000.

The problem is there is no way to know how many of the international passangers were Mexican and how many foreigners, plus how many passangers in domestic flights within Mexico were foreigners. So, anyone care to find out or has this information?

 
AM744
Posts: 1434
Joined: Thu Jun 07, 2001 11:05 pm

RE: RJ's In Mexico

Thu Apr 04, 2002 1:08 pm

RJs are expensive to operate on routes under 300NM, maybe not particularly suited for Aeromar, but they might work for a new airline that makes something like Continental's RJs to Mexico, but in the oposite direction. You get the idea.
 
LatinPlane
Posts: 2471
Joined: Mon Dec 27, 1999 11:05 am

RE: RJ's In Mexico

Thu Apr 04, 2002 3:05 pm


There you go, AM744. You just said everything. An RJ is not meant to serve Southwest type service because they are too expensive to operate on short hops. The RJ's are meant for business travelers.

I guess that it is difficult (for me) to completely understand how many actual domestic passengers the country supports, but it is definitely correct to say that most of the population travels by bus because an airplane ride is a luxury for a great percentage of the population. The true level of extreme poverty is around 55 percent of the population, which also include 30 million or so native indigenous people who are unfortunately under extreme, abject, and desperate poverty.

Let us also remember that a great portion of Mexico's domestic air travel is created by the 10 million or so Mexicans who are not counted because they live outside the country (Like my parents). These people not only directly send a whopping $8.5 billion dollars($8,500,000,000) to support the Mexican economy, (a figure that exceeds the country’s income from tourism and is half the total annual amount of direct foreign investment) but also support Mexico’s domestic airline system. 1 million or so Mexicans living in the U.S. (and this number does not include the American sons/daughters) travel to Mexico at least once or twice a year. However, many of these people may not be counted as these are the ones that travel thru border airports such as: Tijuana, Matamoros, Mexicali, Ciudad Juarez and so forth who are official domestic travelers and not international passengers. These people stimulate domestic air travel tremendously and therefore have an impact on the number of people who travel by air in the country. Are these people being considered in the 1-2% estimate?

 Smile LatinPlane



Pan Am - The World's Most Experienced Airline.
 
aviogenex
Posts: 61
Joined: Sat Mar 30, 2002 12:34 pm

RE: RJ's In Mexico

Fri Apr 05, 2002 8:27 am

I know how a RJ works and I understand it is mainly aimed to the business travellers and should be used on the 300nm plus range.
But I still don't get an answer on what kind of aircraft should be used by a LOW-FARES MEXICAN AIRLINE.

AVIOGENEX
 
Flying-Tiger
Posts: 3923
Joined: Mon Aug 23, 1999 5:35 am

RE: RJ's In Mexico

Fri Apr 05, 2002 8:34 am

Low-Fare regional: either FD928 or EMB190/195. Largest ones available, means costs per seat are lowest possible for this type of aircraft. If smaller necessary down to FD728 or EMB170/175. CRJ700/900 possible but least interesting choice IMO.

Low-Fare domestic: B737-400/800 or 300/700 or A319 with 150 seats or A320-200 with 180 seats.

Regards
Flying-Tiger
http://fly.to/rorders
Flown: A319/320/321,A332/3,A380,AT4,AT7,B732/3/4/5/7/8,B742/4,B762/763,B772,CR2,CR7,ER4,E70,E75,F50/70,M11,L15,S20
 
rojo
Posts: 2254
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RE: RJ's In Mexico

Fri Apr 05, 2002 10:26 am

Aviogenex brought a topic that makes me think a lot: Regional airlines in Mexico and the use of regional jets. I keep discussing this topic with many people because one of my dreams is to establish a regional airline in Mexico.

I keep telling myself that it will be profitable to serve some destinations with regionals. The first time I realized that was two years ago, when I flew AM to Matamoros on a MD83. The airplane was half full. The next day, my brother arrived on the same flight and he told me that the airplane was half full. Two days after my brother arrived, my mother arrived on the same flight and she told me that the airplane was also half full (mmm… weird). I couldn’t believe how AM kept the route running and how they get a profit from flights half full. After discussing this issue with an AM employee, he told me that with the fare structure they use a flight like that needs a 55% load factor to be profitable. Then I realized why AM charges very high fares. For example, Chihuahua used to be a destination exclusively flown by AM. Then MX started one flight a day, and they had to stop service after the creation of CINTRA. After that TAESA flew the route and they had to stop the route after disappointing load factors. Then AeroCalifornia started the route and they decided to compete with AM, but they were intelligent and let AM decide the fares (JR just match AM fares). The cheapest roundtrip fare on the MEX-CUU-MEX route was $350.00 + taxes, making CUU more expensive than flights to US Cities. Today Azteca is flying the route and, although there is not enough evidence on how well they are doing, fares to CUU are 25% cheaper than before. This will be one explanation on why Airlines like AM and MX don’t get regional jets. They prefer to send bigger jets with 55% load factors. If you compare AM and MX load factors with those of any US Carrier you’ll see that airlines in Mexico have very low load factors. AeroMexico and Mexicana averaged a 66% load factor in 2001, when airlines like CO used to had at least a 75% load factor systemwide. Jetblue is getting to the 80%. And you have to add the fact that AeroMexico and Mexicana’s target market is the business traveler. The business traveler wants more frequencies in every route and it is the one that pays the higher fares. So if AeroMexico has a flight half full with “Y” and “J” paying passengers it will make the flight profitable. I will think that what Aviogenex wanted to say is that only 1 – 2% of the population in Mexico travels frequently.

AeroMexico and Mexicana are not used to get competition on the routes they fly in Mexico. AM and MX dominate almost 80% of air travel in Mexico, so it is difficult for other airlines to compete against them if they don’t have enough resources to do it. Azteca is trying hard, but we have to remember TAESA; they try and they failed. AM and MX will always make dumping on the routes they have flown alone when competition arrives in order to kill them. Lets face it. AeroCalifornia challenged AM and MX and know they owe millions to the government and banks.

In conclusion, airlines in Mexico don’t get regional jets to fly from Mexico City because:

1. MEX is a small airport not capable of handling too many regional jets and larger jets at the same time, and the decision of assigning gates is on the size of the aircraft and the amount of money the airline pays to ASA as a hole. That is why AM and MX always get the gates and JR, N4, 6A and ZE always get the remote positions.
2. The business traveler prefers the larger jets, and they will only get into the regionals if there is no other choice. If AM gets a regional and ZE flies a B73G, they will go for the B73G (Although sometimes the regional could be a good compliment in some routes).
3. AeroMexico and Mexicana have a code share agreement with AeroMar (VW) to fly shorter routes with ATR’s. Sometimes AeroMar flies to destinations also served by AM and MX (San Luis Potosí, Acapulco, Leon, etc) to compliment AM and MX service in order to have more frequencies for the business traveler.
4. Regional jets are expensive because they are brand new, airlines like JR, 6A and N4 don’t have the money to get them and they prefer to get DC9’s, B727’s and B737’s to fly the routes with low lease payments.
5. AeroMar decided to fly the ATR, which is cheaper to operate on short flights. They commited to the ATR and they save a lot on maintenance, spares and training by having only the ATR.

If you ask me today, I will say that many mexican destinations flown from Mexico City will be a success using regional jets and there are business travelers (high yield passengers) who need them. AeroMar will have to take some of them in the near future, because they are loosing passengers who don’t like to fly the ATR. Lets face it, flying the ATR in hot weathers is the most disgusting experience I ever had. Once I flew the ATR to get to a meeting, and I was wearing a suit. When we got to our destination, my suit was all wet because the ATR does not have air condition. Which business traveler will like to fly and arrive to a meeting all wet?: NONE. AeroMar flies the ATR because they don’t have competition, if they did have, they wouldn’t be flying the ATR anymore. To explain this, we will have to analyze the case of Southern Winds in Argentina (as IB6400 said) they are the most profitable airline in the country because they tried something different. If any of you have the opportunity to read Southern Winds case, do it, you’ll see that when you innovate instead of imitate, and adapt every situation to the real world you’ll end up in success. Southern Winds has a fleet of CRJ’s and DHC 300. They got the CRJ’s in very good leasing deal because nobody flew bombardier jets in Latin America and Bombardier knew that Embraer was creating a very good product (ERJ) that will keep Bombardier out of the Latin American market. Southern Winds did not want to fly the CRJ, they just wanted the DHC 300, but Bombardier convinced them of getting the regionals and they result was that they hurt very much Aerolineas Argentinas by getting the business traveler. Southern Winds had the advantage of the Aeroparque Jorge New Berry and since they were not a hub and spoke airline, they could fly point to point instead of flying a hub and spoke system from Ezeiza. Aerolineas had to transfer most of their flights to a far away airport (EZE) because they had to feed domestic flights with international flights, and the business traveler did not like that.

IB6400 was talking about people taking the bus instead of an airplane. I once asked a TAESA manager who was the competition of TAESA, and he told me that AeroMexico, Mexicana and AeroCalifornia. And believe me, he was wrong, so wrong that the airline no longer exists. TAESA’s main competition was the bus companies like ETN, Grupo Estrella Blanca, Primera Plus, Estrella de Oro, Omnibus de Mexico, etc. When you study marketing, the first thing you have to do is get to know your target market and your competition, and TAESA never did that, they wanted to get every passenger they could, offering a lousy product with no on time performance. Nobody wanted that. They only got some people trying to fly cheap to Tijuana or people trying to substitute the bus for the airplane.

Another important issue are taxes. As AMX said, taxes for air travel in Mexico are too high. I can see that most of you saw the report in Televisa Channel 2 about the danger on the mexican skies. It was a very good report about how much of each ticket are taxes, about the real situation of most of the airlines and about the expensive services charged by airports in Mexico when they don’t have a good product to offer to passengers. Although they did not comment on the tax structure completely because not all tickets have the same tax structure. Some tickets to mexican destinations have taxes of between 25 – 35% as Ghost said, but it depends where the ticket was issued (SITI or SOTO) and if the destination is international, domestic outside of the border or domestic in the border. Taxes on a MEX-MAM-MEX are only 10% of the ticket while taxes on a MEX-ACA-MEX are between 25 and 35% of the ticket. That is why it is very expensive to fly MEX-ACA-MEX. If the government does not lower taxes for air travel, airlines won’t be able to attract more passengers.

I really try to cover most of the issues discussed in this tread, but believe me, we can discuss this for hours. Some will have one point of view on regional jets, others will say something different, but the real thing is that the history of airlines in Mexico is not good. Lots of them have failed, others are in very bad conditions and we can’t claim we have a company like Southwest, profitable for 30 years, with people that love the company and with a hole success story. I hate that people try to imitate Southwest’s business plan, what people need to see from Southwest is how well the company is managed and the transfer that to another airline with its own business plan and created for the market it will fly. The perfect example of how to tropicalize the Southwest formula to a different situation is Continental. If you can get the book “From Worst to First” you’ll see what I’m talking about.

I will like to see regional jets flying from Mexico City and lower airfares. I could comment on the success of airlines like Southwest, Jetblue, Southern Winds in their markets, but Mexico really needs a good airline with a business plan adapted to the Mexican conditions. Lets face it, if we have very high taxes, why not create an airline capable of offering low fares that could make taxes low. Mexicans always complain about things but they don’t find answers. What makes me mad is the bad managers that Mexican airlines have. They think that the airline industry is so simple and they try to run airlines like normal companies, without knowing the industry. Take for example Mr. Pasquel, he came from Grupo DESC (if I remember correctly) to run an airline without knowing the basics, he could have learned in the process, but most of the times he tried to run the company like a glass company and the airline industry is much more complicated. Take a look at the stupid contract with SAAB for the SF3’s for Aerolitoral. If you make some research, they got those airplanes because SAAB gave the managers of Aerolitoral a bonus for selecting SAAB instead of others. This is well known between the pilots and nobody did anything. They could have sign a better deal for regional jets, but they wouldn’t get them as fast as the SAAB and managers would not have gotten their bonus.

Hope I covered most of the issues discussed in this topic, remember that this is only my point of view and in my opinion there is a market for an airline operating regional jets from Mexico city with a profit. Hope we see them soon…

Rojo

IB6400 / Ghost77, thanks for your support.
IB6400 (is good to know you are happy with your undergrad, it gives you the whole picture of a company)
 
IB6400
Posts: 239
Joined: Tue Jun 01, 1999 12:21 pm

RE: RJ's In Mexico, Rojo...

Fri Apr 05, 2002 11:48 am

Hi!

Rojo: Thank you so much... The post was just what I expected...

You said it... Business Management just gives you a great picture of a company... There are no words to describe the sentence...

Thanks again!

Joaquín  Smile
Mexico City

"Yo soy yo más mis circunstancias"
Ortega y Gasset
Yo soy yo más mis circunstancias - J. Ortega y Gasset
 
cx340
Posts: 518
Joined: Sat Sep 02, 2000 2:59 am

RE: RJ's In Mexico

Fri Apr 05, 2002 11:48 am

Rojo,

I have to say that your reply was one of the best I have ever read. You pretty much summarized the situation of Mexican airline industry. I sincerely hope you can one day start a regional airline here in Mexico, I'm sure it will be sucssesful and I would love to be on the first flight. Ever thought about Toluca for a base?

 
ghost77
Posts: 4458
Joined: Wed Mar 01, 2000 2:07 pm

RE: RJ's In Mexico

Fri Apr 05, 2002 1:02 pm

IB6400: Yeap, it´s always better to solve things out with courtesy!  Big thumbs up

Rojo: Just what I expected you to wrote. Very nice words and very true all you just have said. About the SAAB´s contract second time I heard it.. I was told from a friend but didn´t thought it was true.  Sad Hope Mr. Pasquel don´t do the same thing with the next 25 aircraft AM will received in substitution and get some money as we said here "under the table"... from Boeing or Airbus directors in charge of sales in North America.

About your project, hope you can start an airline in a near future with all the good ideas you got on mind. You will have a lot of success specially knowing all the Aviation Market very well.

If there is something I can do for you, it´s to fly the aircrafts. Count me IN your airline as a pilot!

ghost77  Smile

Ricardo Morales - flyAPM - ¡No es que maneje rapido, solo estoy volando lento!
 
LatinPlane
Posts: 2471
Joined: Mon Dec 27, 1999 11:05 am

RE: RJ's In Mexico

Fri Apr 05, 2002 7:03 pm

Well said everyone! It is so interesting to bring up issues related to Aviation in Mexico and that we all have the democratic opportunity to interact, discuss, share ideas, and argue points about issues relating to growth in the aviation sector of the country. Que bonito, no?

I am glad to see that there are so many people who are really passionate about the pride and joy of the airplanes that fly the flags of their country. The situation is much better now than a few years ago when these airlines where run by complete inept and corrupt people who only cared about their bank accounts. With this being said, the future looks even brighter. Lets hope that it is!

Rojo, I really wish you the best of luck in your future endeavors. My humble suggestions (I'm pretty sure you have already considered this) is to get into the airline business and gain from first hand experience the do's and don’ts of airline management because in the end a book can never teach you what the real world can. I say this from first hand experience! And if there where more people like you (who can see things transparently) in the Mexican government, the country would definitely be a better place.

And the rest of you guys, (especially you IB6400, because you already carry airline blood in you) to one day also have the privilege of working for the industry because it's people like you, who really care, what the industry really needs.

Porque (Mexico) siempre pa' delante y nunca para atras!

 Smile LatinPlane

Pan Am - The World's Most Experienced Airline.
 
rojo
Posts: 2254
Joined: Tue Sep 05, 2000 6:08 am

RE: RJ's In Mexico

Sat Apr 06, 2002 12:15 am

Sorry it took me so much to reply to this topic, but I was out on vacations in Acapulco for "Semana Santa". This month I have done a lot of traveling, so I did not have the chance to check Airliners.net constantly.

IB6400
It is amazing to see people like you really enjoying college. When I was in College (not too long ago, I'm 24 years old) most of my classmates really hated to study and to attend classes, and the majority didn't finish. The good thing of college in Mexico is that you can combine your social life with studying and still manage to get good grades. By the way, how are things in the IBERO?

Ghost77
If you decide to become a pilot, please get an undergrad degree with it. Try to study in the United States where you can get your degree with the undergrad. One of my friends from High School became a pilot in Mexico while I decided to get a BA in Business; we both love aviation, but today, he doesn't have a job nor a degree to get a good job and support himself because there are no vaccancies for pilots in the mexican airline industry.

CX340
Toluca could be an excellent airport to start a regional airline, since Santa Fe, the new financial district of Mexico City is close by. The problem is that AeroMar wanted to start a hub there, but the government didn't let them, claiming that Toluca is the private aviation airport and that commercial flights have to leave from MEX. Today VW is flying from TLC to MTY and MEX, but they are not allowed to open more routes as they wish too. I know that people like me, who live close to Santa Fe, will love to use TLC instead of MEX, specially when you have a same day flight.

LATINPLANE
I have considered moving from the health care industry to the airline industry, but I think that this is not the right time. I mean, the airline industry is in a very bad moment, we are not sure what will happend to AeroMexico and Mexicana, and the other airlines pay very low wages. I think that I will like to wait a little bit and get a masters degree in the near future in order to change to the airline industry, get a good position there, start learning and maybe one day start my own airline.

Thanks to all for your compliments and if you ever need to contact me try my ICQ: 104741528.

Rojo
 
aviogenex
Posts: 61
Joined: Sat Mar 30, 2002 12:34 pm

RE: RJ's In Mexico

Sat Apr 06, 2002 5:20 am


Thank you guys for replying with so much enthusiasm to the topic I wrote.
Honestly I never thought I could find people like you (so pationed) in this forum, I thought I was a freak! but anyway.
I know it sounds a bit crazy but I kind of feel reliefed now that I heard that Rojo wants to establish an airline because I was about to mention that in my first post but I didn't because I was affraid nobody will answer my to Post, but I am also keen to establish a regional jet (or a turboprop carrier for a start) in Mexico.
I know it sounds a bit outrageous cos' I am 20 years old but I 've talked to a lot of people about establishing an airline and two companies seem interested, I know I am not establishing an airline before I finish college but we can start working on it and by the time the airline starts flying (2006-2008) RJ leases will be way lower that they are right now. GUYS we are the future of Mexico and if we are so excited to see RJ in Mexico, Why let them others do it? We can!!
So if anyone is interested let me know,
E-mail/MSN aviogenex@hotmail.com
ICQ 18791235

AVIOGENEX

P.S. Que tal una discucion en vivo?
 
TOMASKEMPNER
Posts: 389
Joined: Wed May 02, 2001 3:21 pm

RE: RJ's In Mexico

Sat Apr 06, 2002 5:33 am

I think that RJ especially CRJ will be great for starting hubs at HMO, BJX, and perhaps MTY and GDL.
People living outside Mexico City always complain about connecting through MEX in order to fly from GDL, MTY etc to CUN and other places.

AM and MX should start developing plans for regional hubs, perhaps AM at HMO and MX at GDL or CUN, so this way they could give their " provincia " passengers better options.

Besides the CRJ fits perfectly. They should take a look of what CO has been doing with their IAH - Mexico network, a big part of it is composed of RJ´s.
 
david_mx
Posts: 189
Joined: Wed Nov 10, 1999 10:44 pm

RE: RJ's In Mexico

Sat Apr 06, 2002 7:39 am

Rojo was totally right.

Guys, here in Mexico all is more expensive (fuel, taxes, tua) but payroll. Our Mexican "Regional" airlines can't afford new RJ's cause their situation, they can't be a competition to other airlines.

Mexican laws are behind other ones, talking about investments and regulations.

MX, AM, Aerocaribe, Aerolitoral MUST be sold A.S.A.P.

I think in order to have better aircraft and airlines we need changes on the government. SCT people aren't doing their Job, what a shame, because I wanted to see a real change on our Aviation system, but so far all is the same.

David.
 
cx340
Posts: 518
Joined: Sat Sep 02, 2000 2:59 am

RE: RJ's In Mexico

Sat Apr 06, 2002 10:55 am

Rojo,

That is precisely why I mentioned Toluca. It would be so good for me to be able to fly a jet to MTY (to where I travel a lot) from Toluca, as my office is at the "Torre Arcos" which I'm sure most of you know, and it is a 25 minute ride to TLC.

It's a shame that the government won't let TLC develop as a commercial aviation airport, but I guess the bottom line is that they don't want an airport competing with MEX and its succesor (if ever built) which is located in a different state. This is ridiculous if you think about it (but then again, we're talking about Mexican Government, "Pejelagarto" and crew. . .), because all airports are governed by federal statues anyway, and any profit goes to the Federation (and of curse the operating companies).

I once called Aeromar to find out the dates, times and fares of their service, but they were not convenient to me. First of all, the flight lasts almost 2 hours (compared to 1:10 hours from MEX and on a jet); in second place, the fare was about US$120 Dollars higher, and finally they only had at that time one flight a day, which was not convenient for me.

I truly believe that a regional jet airline with a hub at TLC would work. Say 5-10 RJs, of no more than 50 seats (maybe even less) to mainly business destinations. . . nice thoughts, but will they ever be true?

Anyway, congratulations again on your detailed and consistent answers. Hope to keep readin' em.


 
david_mx
Posts: 189
Joined: Wed Nov 10, 1999 10:44 pm

RE: RJ's In Mexico

Sat Apr 06, 2002 1:08 pm

CX340,

Your comment about MEX (Pejelagarto one) made me laugh, but sometimes I think is true and know why?? With no offense to graduate people participating in our aviation system I think we don't have people with education (at high levels) thinking what is the best for everyone: You are right if we had better airports that would be great for federation. You are right and it makes sense TLC could be a great relief for MEX. I imagine an schedule like this

From / To Toluca Operated with RJ:
---------------------------------------------------
Monterrey
Saltillo
Guanajuato
Villahermosa
Veracruz
Acapulco
Guadalajara
Ixtapa
Huatulco
All cities betwen a radius 1,500 nm and less 300 nm.

From / To Toluca with Turboprops all with less 300 nm.

From / To Mexico:
----------------------------------------------------
All cities of a radius more than 1,500.

I think your idea will be great.

David.




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