jopavon
Posts: 282
Joined: Wed Nov 05, 2003 12:53 am

United, Mexicana End Code Share Agreement

Sat Nov 08, 2003 9:12 am

This is a UA press release, does anyone know something about what happened to their relationship? Is MX going to pull out of Star Alliance?

UA Press release----


United, Mexicana End Code Share Agreement

November 07, 2003

CHICAGO, November 7, 2003 – United Airlines (OTCBB: UALAQ) and Mexicana Airlines today announced that their code share and regulatory cooperation agreement will end, effective March 31, 2004. United customers currently ticketed on an itinerary that includes a Mexicana codeshare flight beyond that date will be fully accommodated in their travel plans.

Mileage Plus accrual on Mexicana flights will also end on March 31, 2004. All Mileage Plus award reservations on Mexicana must be booked and ticketed by December 31, 2003, and travel must be completed by March 31, 2004. Customers will continue to enjoy reciprocal lounge access until March 31, 2004.

“United customers can continue to book with confidence on United for their future travel needs to Mexico,” said Graham Atkinson-senior vice president, worldwide sales and alliances, United Airlines. “United Airlines remains fully committed to the Mexican market and to its customers traveling to and from the region. We have had a mutually beneficial agreement with Mexicana for the past seven years, and both airlines will ensure that this is a smooth transition for all our passengers.”

United will continue to offer daily service to Mexico City from its U.S. hubs in Chicago, Los Angeles, San Francisco and Washington – Dulles. In addition, United recently announced that it will begin service from Washington Dulles to Cancun, Mexico on February 14, 2004, pending government approval.

United customers currently booked on an itinerary that includes a Mexicana codeshare flight after March 31, 2004 should contact United Customer Service at 800-241-6522 for further information on how they will be accommodated.
 
bistro1200
Posts: 312
Joined: Sat Nov 01, 2003 7:13 am

RE: United, Mexicana End Code Share Agreement

Sat Nov 08, 2003 9:20 am

I think it is due to TED serving Chipotle burritos.
Measure to the millimeter, mark with a crayon, cut with an axe.
 
usairways85
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RE: United, Mexicana End Code Share Agreement

Sat Nov 08, 2003 9:37 am

I wonder if Mexicana and US have something in the works
 
syncmaster
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RE: United, Mexicana End Code Share Agreement

Sat Nov 08, 2003 9:46 am

Mexicana is a part of Star Alliance, I'm a little confused how if they drop there code-share with United, and not the rest of the Star Alliance?

Usairways85 - That wouldn't make much sense either, considering the fact that US is joining the Star Alliance early next year.
 
SegmentKing
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RE: United, Mexicana End Code Share Agreement

Sat Nov 08, 2003 9:48 am

Mexicana must be bailing from Star because part of the Star Alliance is the ability to check-in all the way to your final destination & mileage accrual.

so what gives......


-n
~ ~ ~ ~ pRoFeSsIoNaL hUrRiCaNe DoDgEr ~ ~ ~ ~
 
LAXintl
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RE: United, Mexicana End Code Share Agreement

Sat Nov 08, 2003 9:48 am

Mexicana will be dropping out of the Star Alliance. Standy by for a public announcement.
From the desert to the sea, to all of Southern California
 
usairways85
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RE: United, Mexicana End Code Share Agreement

Sat Nov 08, 2003 9:53 am

where does it say Mexicana will be leaving Star??? That's just pure speculation on everyone's part. Granted it sounds peculiar that Mexicana would drop code-share with UA and still be in Star. But does every Star carrier code-share with each other?
 
A2
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RE: United, Mexicana End Code Share Agreement

Sat Nov 08, 2003 10:03 am

Not all Star Alliance carriers code shares with each other. However, AFAIK there's mileage accruals and redemptions on all Star carriers.
 
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mariner
Posts: 18253
Joined: Fri Nov 23, 2001 7:29 am

RE: United, Mexicana End Code Share Agreement

Sat Nov 08, 2003 10:09 am

It affects Denver quite seriously.

In the press release UAL talks about continued service to Mexico City from it's other hubs, but, since they don't serve DEN/MEX, except seasonally, that route goes with the code share.

Unless UAL plans to fly that route themselves. But they don't mention that.

And since it was Mexicana that chose to end the code share, I wonder why.

And now it looks like Mexixana's star Alliance membership will go. Hmmm.

http://biz.yahoo.com/rc/031107/airlines_staralliance_mexicana_1.html

cheers

mariner
aeternum nauta
 
alexchao
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RE: United, Mexicana End Code Share Agreement

Sat Nov 08, 2003 10:10 am

Well, here's a release on Yahoo! News

SA - Florida">NEW YORK, Nov 7 (Reuters) - The Star Alliance, the world's largest air alliance by international scheduled revenue passenger miles, on Friday said it may end the membership of Mexicana Airlines after that carrier terminated its code-share arrangement with United Airlines.

Star said its members will discuss terminating Mexicana's membership at a Nov. 13 meeting in Frankfurt, Germany. Mexicana did not immediately return calls seeking comment.

In a joint statement, the other alliance members said they "regret this development but do not see any other solution for the future of our business partnership." They said its membership will continue to serve Mexico and the international air travel market.

A spokeswoman for United, a unit of UAL Corp. (OTC BB:UALAQ.OB - News), said Mexicana decided not to renew its seven-year code-share agreement with the No. 2 U.S. carrier "due to evolving business trends in the Mexican aviation industry."

Star Alliance members include United, Mexicana, Air Canada (Toronto:AC.TO - News), Air New Zealand Ltd. (NZSE:AIRVA.NZ - News), All Nippon Airways Co. (Tokyo:9202.T - News), Asiana Airlines (KOSDAQ:20560.KQ - News), the Austrian Airlines Group (Vienna:AUAV.VI - News), British Midland Airways, Lufthansa (XETRA:LHAG.DE - News), SAS AB (Stockholm:SAS.ST - News), Singapore Airlines Ltd. (SES:SIAL.SA) and Svea Flyg (Sweden)">SI - News), Spanair, Thai Airways International Ltd. (SET:THAI.BK - News) and Varig (Sao Paolo:VAGV4.SA - News)


http://biz.yahoo.com/rc/031107/airlines_staralliance_mexicana_1.html
 
StarFlyer
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RE: United, Mexicana End Code Share Agreement

Sat Nov 08, 2003 10:13 am

Do not forget UA is still one of the founding airlines of Star as well as one of the largest so they have some sort of power. Whether MX will be able to afford leaving Star (some 30,000,000USD) should be another issue, though I cant see why they would do that!
Yours truly - StarFlyer
 
rojo
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RE: United, Mexicana End Code Share Agreement

Sat Nov 08, 2003 10:18 am

This is very strange!!!!

I just don't understand why Mexicana will exit StarAlliance, unless they have a very good offer from OneWorld. I won't be able to accrue Star miles on my Frecuenta anymore...
 
navega
Posts: 467
Joined: Tue Nov 02, 1999 10:58 pm

RE: United, Mexicana End Code Share Agreement

Sat Nov 08, 2003 10:23 am

I believe Mexicana will join another Alliance. It has
been very difficult dealing with United with all of it's
problems during the past years.
Quite frankly, Mexicana does not need United but United
needs Mexicana.

Maybe another Alliance will pay for Mexicana to leave
Star. Mexico is a hot destination and Mexicana is the
top carrier in number of passengers carried between
both countries. They are probably being wined and dined
right as we speak.

Very confusing but Mexicana should do well. United to
Mexico now has serious problems.
 
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lindy field
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RE: United, Mexicana End Code Share Agreement

Sat Nov 08, 2003 10:31 am

Do you suppose this has to do with (A) the new difficulties that non-Americans have when transitting through US airports on to way to somewhere else or (B) Mexicana's plans to start flying wide-bodied aircraft (767s) to possibly avoid the need to connect through the UAL network or (C) plans to eventually hook up with One World?
 
rojo
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RE: United, Mexicana End Code Share Agreement

Sat Nov 08, 2003 10:41 am

My bet goes to OneWorld. Mexicana benefits from StarAlliance partner flights to connect passengers to every continent. Every time I flew to LAX with MX, many of the passengers were connecting to other *A flights. In fact, I did choose MX only because they flew me to AKL with MX/NZ codeshare. They are running StarNet in which they spent lots of $$$ and everything was going smoothly. But since last month, MX has given us many surprises!!! So they must have something on their back that they will announce shortly. I really want to see what it is???
 
AR385
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RE: United, Mexicana End Code Share Agreement

Sat Nov 08, 2003 11:05 am

CINTRA is desperate to privatize the two airlines it controls. It makes no sense in a country like Mexico to have a proliferation of airlines. What I believe is going to happen, is that Mexicana and Aeromexico will be consolidated in one airline, Mexicana being taken out of Star Alliance is the first step, then Aeromexico will be taken out of SkyTeam, second step. Afterwards they will be consolidated and sold as one. Then they will be a real juicy fruit for any alliance. But mark my words, you'll soon see Aeromexico leaving SkyTeam too.

AR385
 
ghost77
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RE: United, Mexicana End Code Share Agreement

Sat Nov 08, 2003 11:30 am

WOW! That's all I have to say with this kind of news..... Never thought MX was leaving STAR..... hope it is for gooooooodddd!!!!!!!!!!

My thoughts....

1. Lately, there's been a rumor around that MX has been sold to the Mexican Millionaire Carlos Slim, who's investing a lot of money in the new airline.... As an example... 15 new A319s... 12 A320s coming soon and the reintroduce of widebodies to the fleet the B767.

2. According to some rumors.. looks like MX will open routes to Europe between October-December of 2004.

3. MX has been invited to join... ONE WORLD???

4. Government is planning to make a flag carrier.... AM/MX.... but I guess THAT WON'T HAPPEN..... PERFECT EXAMPLE THIS FAR RG/TAM.... in Mexico RG is AM and TAM is MX. If RG/TAM merge is successful we probably might see something like this with AM/MX!!!!! For instance, in a beginning they could mix the fleets.... later they would definitely turn into an Airbus or Boeing airline.

5. We cannot discard what AR385 said... in case MX haven't been sold, maybe both airlines will go out from their alliance, merge and be sold together... then they will be back soon in either Star, Sky or OneWorld.

** Finally, just like NAVEGA said... UA will be in real serious problems... MX doesn't need UA, but UA needs MX. MX is the top carrier in number of passengers carried between Mexico and United States... AND now it's also the number one between Mexico and Canada....

Well, hope AM/MX merge and become a real powerful flag carrier! Also, if they do this, other airlines such as 6A, ZE could have possibilities to expand their route networks!!! Hope the best for Mexico's aviation!!!

Ricardo Morales - APM  Smile

Ricardo Morales - flyAPM - ¡No es que maneje rapido, solo estoy volando lento!
 
Trvlr
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Joined: Thu Feb 17, 2000 9:58 am

RE: United, Mexicana End Code Share Agreement

Sat Nov 08, 2003 11:58 am

So Mexicana leaves the largest and most integrated alliance in the world--and will probably have to pay a fair number of millions to do it. Smart move.

I really don't see what the reasoning behind their departure is, unless as Ar385 says, they're going to be merged with AM.

Aaron G.
 
MAH4546
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RE: United, Mexicana End Code Share Agreement

Sat Nov 08, 2003 12:51 pm

So Mexicana leaves the largest and most integrated alliance in the world--and will probably have to pay a fair number of millions to do it. Smart move.

From the sound of the PR, it appears as if other members are considering kicking MX out. If MX is kicked out, then I doubt there is a fine. The $30M fine is only if they choose to leave.
a.
 
navega
Posts: 467
Joined: Tue Nov 02, 1999 10:58 pm

RE: United, Mexicana End Code Share Agreement

Sat Nov 08, 2003 1:07 pm

Just got a tip from a Mexicana friend in top managment
that apparently MX has been sold.

He thinks it is to American Airlines. This would be great
for Mexicana and for the aviation of Mexico.

This explains the new A319s, A320s, B767s and the
announcement 3 days ago about the A318s that will
replace their 10 Fokker 100's.

Good Luck to Mexicana, it's a great Airline and deserves
to be in the leadership of Mexicana Aviation where it
was for years and not in second place.


Watch out Aeromexico, Mexicana is taking back its
rightfull place.

Things are getting exciting and I cannot wait to see what
news there will be next Monday Morning.
 
Trvlr
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RE: United, Mexicana End Code Share Agreement

Sat Nov 08, 2003 1:13 pm

MAH4546: Very good point. The PR does sound like Star wants MX to go. However, considering that Mexicana was the one that terminated the UA codeshare, MX seems to want to leave as much as Star wants them to. I wouldn't be surprised if Star tries to squeeze a severance sum out of MX, saying that the airline "is not living up to its commitments in the alliance" etc etc. We'll see, I guess!!

Aaron G.
 
Mexicana757
Posts: 2635
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RE: United, Mexicana End Code Share Agreement

Sat Nov 08, 2003 1:25 pm

I didnt see this coming. Im shocked. Wonder why MX left. I'm sure they will have press release soon to tell what the reason was. I think the other star carriers wont fine MX since it says they are going to kick them out. All of the Star members are going to be affected by this, especially United and Air Canada.

MX has something up it's sleeve and will not say what it is probably until the end of this year or beginning of next year. All of the fleet renewal and now they are adding widebody aircraft to their fleet. It says a lot.

I wish MX the best of luck in whatever it does, but United needs it more becuase they are going to be left with a huge gap. As you can see United is already doing something about it by adding Cancun. Dont know why they only have had MX), Mexico">MEX as their only destination in Mexico. Oh well it's their fault.

I bet AA and CO are happy this happened. After all both have a lot of routes to Mexico and will probably take some of those passengers with them along with MX.

 
BA
Posts: 10134
Joined: Fri May 19, 2000 11:06 am

RE: United, Mexicana End Code Share Agreement

Sat Nov 08, 2003 4:02 pm

This is quite sad and disappointing.

Mexicana, although small, is quite a crucial carrier for the Star Alliance as it provides the primary framework for the Star Alliance's Mexican network. United does not serve Mexico sufficiently and cannot fill in the void that Mexicana would leave behind.

Not to mention that Mexico City (MEX) itself would suffer as a hub since it relies on connections from Star Alliance carriers.

People fly to Mexico City (MEX) on Lufthansa for example, then connect onto a Mexicana flight to another Mexican city.

Regarding Denver (DEN). While it's true that United does code-share on Mexicana's daily flight on the A319, the flight does not arrive early enough for connections onto United flights. The Mexicana flight arrives in Denver at 6:45PM when there aren't many United departures.

The Mexicana flight overnight, and departs the next day at 8:45AM. Again, it departs too early to recieve any feed from United flights.

I have heard that this route was launched to serve the sizable O&D market between Denver and Mexico City and was not intended to be coordinated with connections for United.

United's Mexico gateways are Los Angeles, San Francisco, Chicago, and to a smaller extent, Washington D.C. Denver isn't one of them. United never has been motivated in serving the Denver - Mexico market despite operating a short seasonaly 1x weekly flight last winter on an A319 (which was simply for aircraft utilization so the aircraft didn't sit on the ground).

We'll see how this affects the Denver flight. I think it'll be fine for now. What might possibly happen is Mexicana will reduce frequency to maybe 4x or 5x weekly. Although I have heard loads are good.

Either way...this is disappointing......

Does anyone know exactly why Mexicana terminated the agreement with United? The feed that United provided, surely must substantially help Mexicana's profits. That's the advantages of alliances. Everyone within the alliance is a winner benefitting off of each other.

Regards
"Generosity is giving more than you can, and pride is taking less than you need." - Khalil Gibran
 
The777Man
Posts: 5923
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RE: United, Mexicana End Code Share Agreement

Sat Nov 08, 2003 4:17 pm

I have to agree with Ar385; MX and AM will be merged to one carrier and then privitized. Too bad for UA and Star Alliance.

The777Man
Boeing 777s flown: UA, TG, KE, BA, CX, NH, JD, JL, CZ, SQ, EK, NG, CO, AF, SV, KU, DL, AA, MH, OZ, CA, MS, SU, LY, RG, PE, AZ, KL, VN, PK, EY, NZ, AM, BR, AC, DT, UU, OS, AI, 9W, KQ, QR, VA, JJ, ET, TK, PR, BG, T5, CI, MU and LX.. Further to fly.. LH 777
 
User avatar
mariner
Posts: 18253
Joined: Fri Nov 23, 2001 7:29 am

RE: United, Mexicana End Code Share Agreement

Sat Nov 08, 2003 4:23 pm

BA:

You slightly miss my point. While the DEN/MEX flight may not have a great deal of feed from UAL, it surely has some - there are people (I'm one of them) who will deliberately overnight in Denver when they don't need to.

There are also people who need to stay in Denver, for business reasons, before going on.

These may not be a large group of passengers, but every passenger helps. Recently, one of the Denver papers did an article on Denver's fast growing Hispanic community - but that article indicated the DEN/MEX wasn't enjoying the highest load factors, at least in off season.

So I suspect there is a deal more to this than we presently know. I would guess that we'll start to understand it better over the coming weeks, as more information comes out.

cheers

mariner
aeternum nauta
 
SInGAPORE_AIR
Posts: 11619
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RE: United, Mexicana End Code Share Agreement

Sat Nov 08, 2003 5:21 pm



Star Alliance to discuss termination of membership of Mexicana Airlines

November 07, 2003 - The members of Star AllianceTM have today agreed to discuss a termination of the membership of Mexicana Airlines in the global alliance at the next regular Alliance Management Board meeting on November 13 in Frankfurt, Germany.

The decision follows the official announcement of the termination of the bilateral relationship between United Airlines and Mexicana Airlines earlier today.

In a joint statement, the members of the alliance “regret this development but do not see any other solution for the future of our business partnership. The combined strength of the Star Alliance membership will ensure that the international air travel market, and in particular Mexico, will remain well served by our team of high quality airlines.”

--------

Mexicana - A Member of Star Alliance


Anyone can fly, only the best Soar.
 
Leskova
Posts: 5547
Joined: Wed Oct 08, 2003 3:39 pm

RE: United, Mexicana End Code Share Agreement

Sat Nov 08, 2003 5:46 pm

Urgh, I've got a customer on a UA/MX codeshare between GDL and ORD on 18NOV - so far, the flightnumber still exists and the booking hasn't been cancelled or changed by the airline... but I had a look at the availability of the UA/MX codeshares between GDL and ORD that day - and while they're all still being displayed, there isn't a single seat available anymore, so I guess that they've already blocked them for new sales...
Smile - it confuses people!
 
MAH4546
Posts: 24594
Joined: Wed Jan 24, 2001 1:44 pm

RE: United, Mexicana End Code Share Agreement

Sat Nov 08, 2003 6:07 pm

Very good point. The PR does sound like Star wants MX to go. However, considering that Mexicana was the one that terminated the UA codeshare, MX seems to want to leave as much as Star wants them to.

Yes, I agree that MX seems to want to leave. Terminating thier codeshare with UA is probably the first step towards getting themselves kicked out. If they are kicked out, no $30M fine, so they are much better off getting the dissaproval of Star than just saying "I'm out". Saves them quite a lot.
a.
 
rojo
Posts: 2257
Joined: Tue Sep 05, 2000 6:08 am

RE: United, Mexicana End Code Share Agreement

Sat Nov 08, 2003 7:23 pm

I don't agree with the merger. If the government wants to merge AM and MX, why did CINTRA approved the package to buy 15 A318's for MX two days ago??? Their short/medium haul fleet will be a total mess if merged...

My new hypothesis is that American Airlines does not have the money to buy another airline in this moment, so if OneWorld wants MX to join, the money should come from British Airways or Qantas. And if we start thinking south, the money could come from LanChile (good financial situation) with the backup of QA, BA and AA. They might get their ultimate dream, a LANMEXICO created with the purchase of MX. But there also has to be a Mexican investor who is behind this. I don't know if Grupo Carso is the one, but who knows!!!

I'm really impressed with the work Edelman and the PR department of Mexicana have done in order to keep the information of MX's future well protected!!!!

 
jopavon
Posts: 282
Joined: Wed Nov 05, 2003 12:53 am

RE: United, Mexicana End Code Share Agreement

Sat Nov 08, 2003 8:13 pm

A merge with AM sounds strange since it looks like they are going in different directions regarding fleet commonality. MX with short/haul Airbus, and AM with short/haul Boeing. They only thing in common is their B757 and the arrival of the 767 in Mexicana also will make it a common plane for both. If they were to stick together, it would have been smart to renew F100 with Boeing in order to have more common types with AM, or AM ordering Airbuses. If so is the case, then CINTRA should have opted for Boeing or Airbus only.

But if the merger is true then MX would go to Skyteam (where AM is a founding member). I don't see AM pulling out of Skyteam to form a new flag Mexican carrier and rejoin an alliance. It is too much money you need to invest. If they merge they will stick to Skyteam.

But why move from the leading alliance to the third Oneworld? Skyteam is going to become the second shortly with KL, CO & NW.

If things were going well with Star, the fact that has been sold to Slim, shouldn't affect the fact that MX was a member of Star Alliance. MX early flights to LAX have people connecting to Asia, flights to ORD connecting to other UA destinations in the US and beyond. Well, maybe we'll get Sanborn's enchiladas on MX flights  Smile

Could this code-sharing thing be some sort of negotiating strategy? Who knows, Slim puts good pressure on its partner to make better deals. Remember Sears in Mexico, he got 5 yrs. of no brand revenue. He is a good businessman, he has a plan for sure.

But being in Star, I guess it was only working very well with UA, AC and LH.

Currently MX doesn't fly to Europe on its own so partnering with BD (little American presence); JK, NG and VO (no American presence); SK, OS, LO (few destinations in America, and not really in the same places were MX flies regularly) add few value to MX since codeshare or connecting flights don't seem to be interesting for both sides.

They don't work close at all with NH, SQ, TG, OZ (since all they can offer is a connecting flight from/to LAX or SFO).

Regarding South America, RG has few flights to Mexico, and having MX receiving their 767s I guess they will offer more destinations on the south through nonstop flights. They already codeshare on Santiago with LA.

On the other hand, UA could start more services to Mexico (they have a lot of planes grounded), the same will go with AC, so MX will have more competition it didn't use to have on their routes to the 3 major Canadian cities and US: SFO, LAX, ORD, DEN. It doesn't seem to be a good move, hope it proves wrong and MX doesn't have that many planes to compete back.

But same thing will happen it they move to Oneworld: they will only work closely with AA, BA and IB (the only difference is that there will be 2 Europeans that fly to Mexico). Maybe one new MX flight would be ZRH instead of FRA if they pull out of Star and LX doesn't serve ZRH-MX), Mexico">MEX, and complement BA LHR-MX), Mexico">MEX & LHR-CUN flights.

If they go to Oneworld, I guess AA-MX wouldn't create synergies. AA flights into Mexico go nonstop to major destinations: GDL, MTY, CUN, ACA, PVR, SJD, BJX. AA only common nonstop flights with MX to Mexico are: Chicago (to various Mexican destinations where they compete) and Miami. And AA doesn't have big hubs on the other mexican important US gateways like LAX and SFO.

Again, MX couldn't really start DFW since AM flies there. Also true is that AA has good connecting service through their hubs in MIA, ORD and DFW, but MX wouldn't be as helpful as it was to UA. Here is a summary:

Asia: AA has almost no presence (no value added, contrary to UA)
South America: AA has a powerful route network, why MX?
Central America: AA has an agreement to serve with Grupo Taca. Why MX?
US: MX doesn't go to DFW and AA serves MX), Mexico">MEX-MIA with 757 and A300 three times a day, and MX only twice with A319. AA offers all their connections with the flights they currently operate.
Europe: MX doesn't go there, for now, but AA has great connections with their own flights. Why use MX?

A2
"Not all Star Alliance carriers code shares with each other. However, AFAIK there's mileage accruals and redemption on all Star carriers."
That is true, but their natural working partners are UA and AC. Mexicana is the airline that transports more passengers between Mexico and the US and Canada. Also lounge access will end.

Leskova
"Urgh, I've got a customer on a UA/MX codeshare between GDL and ORD on 18NOV"
The agreement will come to an end on March 31, 2004.

Ghost77,
You said on another forum that the one of two new A319s joining the fleet later this year had a surprise, may that be the new alliance announcement?

Rojo:
"a LANMEXICO created with the purchase of MX"
That could be, but LAN Chile is renaming itself to LAN America (creating a unique brand to all its airlines), but airline ownership in Mexico to foreigners is restricted to small percentage. Mexicana has a well established name, brand and image, it would be a waste to rename it.

Finally:
FFs, Oneworld only accrues 25% of miles in discounted economy fares, so that will be something passengers will dislike. They only accrue 100% on Y and B economy full fare classes. Unlike Star and Skyteam so far. That is no good news to Frecuenta.
 
rojo
Posts: 2257
Joined: Tue Sep 05, 2000 6:08 am

RE: United, Mexicana End Code Share Agreement

Sat Nov 08, 2003 8:29 pm

Jopavon:

Just to clarify, Mexicana has dormant rights to fly Mexico City-DFW and they can start whenever they want, that is why the government never approved JR flight Mexico City-DFW in 2000. 10 years ago, MX was the one serving DFW and not AM. If you take a look at AM's performance in the DFW market they have been loosing money, they used to have 3 daily flights and now they just have 1. And this was because DL downgraded its hub in DFW.

It is a mystery what MX is doing and I hope they come out with a press release soon enough!!
 
rojo
Posts: 2257
Joined: Tue Sep 05, 2000 6:08 am

RE: United, Mexicana End Code Share Agreement

Sat Nov 08, 2003 9:58 pm

I was talking to a friend who is in the mexican airline industry and he tells me that MX had a shareholder meeting last week where MX executive committee approved the new fleet plans (B763's, A318 and more A320 to replace old ones), the new routes and decided the future of the airline. He said MX is not willing to quit StarAlliance, but the problem is that they reached the moment where they had to decide if the airline will be more valuable to investors if there were no ties to a big airline from the United States. That way CO, DL and AA could be more interested (they already showed interest in mexican airlines) and maybe they could buy a stake in MX and get the airline into their alliance. That is why there has been no press release from MX so far. They just couldn't extend the 7 year contract with UA for the moment, but there is a hope they will do it in the next months. The current contract is still valid and will end until March 2004, so they have from today to March 2004 to work something out. This is more sensible than all the rumors that have been hanging around and I hope MX finds investors and maybe SAS could buy 25% in MX with another Mexican investor keeping the other 75%. That way MX will stay in StarAlliance. But if AA approaches to MX and closes a deal, MX is not tied to UA with a contract that will be very difficult to brake.

This was a very sensible moment for MX future and they took a decision that shocked everyone following the airline industry, specially the alliances in the airline industry. But they needed to do it this way in order to increase the value of the airline and not closing the doors to potential buyers. I know that MX is going to show to the November 13 StarAlliance meeting and explain why they didn't renew the contract with UA.

Hope MX comes with a press release soon to clarify all this mess!!!
 
rojo
Posts: 2257
Joined: Tue Sep 05, 2000 6:08 am

RE: United, Mexicana End Code Share Agreement

Sat Nov 08, 2003 10:35 pm

Finally, there is an article from Reforma newspaper written by Cinthya Bibian, a columnist of this newspaper with an interview to a private counselor of Mexicanas executive committee. It is not the official word on MX, but it could help (spanish only):

Prevé Star Alliance excluir a Mexicana

Entre las 13 aerolíneas que integran Star Alliance perciben ingresos por 67 mil 500 millones de dólares

Por Cinthya Bibian
Grupo Reforma


Ciudad de México (7 noviembre 2003).- Los miembros de la mega alianza Star Alliance evalúan la desafiliación de Mexicana de Aviación de esta agrupación de aerolíneas tras el rompimiento del acuerdo de código compartido de la subsidiaria de Cintra con United Airlines.

"Star Alliance evaluará durante la próxima reunión regular de la junta directiva de la alianza el 13 de noviembre en Francfort, Alemania, terminar la afiliación de Mexicana", señalaron fuentes de la asociación.

Mexicana decidió no renovar el acuerdo bilateral con United, que vence el 17 de noviembre, debido a que considera que no es conveniente para su plan de negocios del 2004, señaló Fernando Martínez Cortés, asesor de la dirección general de la aerolínea mexicana.

"Se ha hecho una evaluación de lo que se logró con la alianza y se decidió no continuarla, es una decisión comercial y ahora Mexicana buscará mejores alternativas para atender el mercado de Estados Unidos", dijo.

Según información de Martínez Cortés, Mexicana cuenta con una participación de mercado de más del 20 por ciento del tráfico de pasaje entre Estados Unidos y México y enfrenta una competencia con 12 aerolíneas.

Agregó que por el momento Mexicana seguirá ampliando su oferta hacia el mercado estadounidense y hasta ahora no ha contemplado si se incorporará a otra alianza puesto que la decisión definitiva sobre su participación en Star Alliance aún no se ha tomado.

Directivos y especialistas de la industria aérea revelaron que el pertenecer a una mega alianza permite a una línea aérea incrementar sus ingresos entre 10 y 12 por ciento gracias a que pueden ampliar su oferta de destinos.

Así, Mexicana puede ofrecer 815 destinos gracias a que pertenece a Star Alliance, cantidad superior a los 50 destinos que ofrecía antes de su integración en julio del 2000.

Una mega alianza es un acuerdo entre diversas aerolíneas de distinta nacionalidad que implica la venta de boletos entre las socias según el destino al que una persona desee viajar en prácticamente cualquier ciudad del mundo y por lo que la línea vendedora percibe una comisión.

To learn more about this news, go to Reforma's website www.reforma.com


Just as I was told, the article states that Mexicana reviewed their 2004 business plan and they thought the codeshare agreement with UA has not given them what they expected and they decided not to extend the agreement. In my opinion, this is a way of hiding the truth about the future of Mexicana and how more valuable it could be if they sell the airline without a 7 year contract tied to UA...
 
JAVOMD88
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RE: United, Mexicana End Code Share Agreement

Sun Nov 09, 2003 1:51 am

Hi guys!
Well im really shocked! All employees always were braging about their alliance, and now all we can see is that somebody is in problems, MX or UA or even the star alliance its self maybe be breaking apart and this is just the start of it!

I cant imagine all the passengers that maintained their miles with MX just for the alliance, and now, BYE BYE! That's going to take a HUGE hit on passengers!

Now MX future is uncertain, but hopefully they are doing what they think is best for them!

My best regards!

JAVO.
aeromexico.....the only true carrier of mexico
 
LHR001
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RE: United, Mexicana End Code Share Agreement

Sun Nov 09, 2003 2:14 am

If Mexicana is to merge with Aero Mexico wouldnt it make sense for Mexicana to then join SkyTeam?

If Mexicana is **not** to merge with Aero Mexico wouldnt it make sense for Mexicana to join One World?



LHR001
 
LeoDF
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RE: United, Mexicana End Code Share Agreement

Sun Nov 09, 2003 3:31 am

This is Mexicana's worst stupidity!!!!

Reading the news at Yahoo, there was a paragraph that said that Mexicana is not considering code sharing with United anymore because they think Mexican aviation is evolving, WHATEVER THAT MEANS!!!!

If they were to join another alliance, it would be for the worst! Star Alliance is the largest and most recognized alliance in the world!

Now all of the sudden, Mexicana believes it is too much for Star Alliance HAHA!
I think they'll pay for this. Markets show us that alliances are made to support one another. Few airlines will survive in the future without alliances, mostly low cost carriers!

Really hope it's for the best, but I doubt it!!!

Good luck, Mexicana!

A. De Leo
Lloyd Aereo Boliviano
 
F9Widebody
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RE: United, Mexicana End Code Share Agreement

Sun Nov 09, 2003 3:49 am

This is potentially a huge loss for Star  Angry . If I were them I would make it as painful as possible for them to leave. I would not kick them out, because then they wouldn't have to pay. Especially if they are going to join another alliance.

Regards,
F9W
YES URLS in signature!!!
 
ConcordeBoy
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RE: United, Mexicana End Code Share Agreement

Sun Nov 09, 2003 3:51 am

So Mexicana leaves the largest and most integrated alliance in the world

I'd call it very difficult (if not impossible) to argue that Star is a more integrated alliance than SkyTeam.




As for a merged AM/MX to join SkyTeam... why bother (speaking of SkyTeam)? Yes, it'd keep the competitors from getting it... but the antitrust issues would be enormous.

Without AM, CO would actually have some non-redundant use in SkyTeam, so either way they win.
Faire du ciel le plus bel endroit de la terre c'est impossible sans Concorde!
 
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mx330
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RE: United, Mexicana End Code Share Agreement

Sun Nov 09, 2003 5:17 am

WOW!!
I'm kinda shocked... This is not the kind of news you specially want to read waking up in a Saturday morning.
There are some points that have not been discussed here...

So if MXA pulls out of Star Alliance will the 767's still be arriving to MX???? Remember they come form SAS...

I don't think specially that AA would buy MX. Just because MX got A318's last week instead for going with Boeing...

Changing form Star Alliance to One World could work out OK for MX:
BA and IB serving Europe.
Just imagine the kind of monopoly in the region with AA, COA and MX. Huh.. Amazing.

Jopavon:
US: MX doesn't go to DFW and AA serves MX), Mexico">MX), Mexico">MEX-MIA with 757 and A300 three times a day, and MX only twice with A319. AA Offers all their connections with the flights they currently operate.

This could probably have more connections in all of Mexico, meaning AA pax could now fly MXA...
Europe: MX doesn't go there, for now, but AA has great connections with their own flights. Why use MX?

MXA door to Europe is LH. Pulling out of StarAlliance will pull out MX out of Europe. AA Flights to Europe, connections and flights to Mexico represent better possibilities that what LH does.

AA can probably help MXA grow their 767 fleet.

Finally. AA Has a much more imponent presence in Mexico than UA. COA Also has amazing operations to regional airports in Mexico.



Lets hope for some great news Monday.

MX330
All Canon! EOS 5D mk III, 8mm, 17-40, 24-105, 70-200 f2.8, 100-400L
 
aaway
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RE: United, Mexicana End Code Share Agreement

Sun Nov 09, 2003 5:43 am

Does anyone know if UA still holds the rights to fly MEX- Central America? UA flew MEX-UA / MGGT), Guatemala">GUA/SJO at one time.
"The greatest mistake you can make in life is to continually be afraid you will make one." - Elbert Hubbard
 
AR385
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RE: United, Mexicana End Code Share Agreement

Sun Nov 09, 2003 6:21 am

Rojo,

Thre are many factors why I believe at thispoint in time a foreign airline will not be allowed by the governet to participate in the process of privatisartion.

1. After the banks, the petrochemical industry and the Hydrocarbon E & P. amongst others, there is no political will to force down our throats that wow!! another key industry for us is handed on to the foreigners.

2. Don't forget the unions. They won't let it happen. I had a mice talk to an F/A who had been in an exchange program with Delta and said never again. Let's just see AMLO. Alejandra Barrales and Rodriguez Alcaine embracing the unions non privatization demands.

3. What is a foregin airline going to provide that CINTRA hasn't already? Capital? Let the government sign for it and be a guarantor. The alliances an mileages can come from anywhere.

4. There are some industrial and financial groups in Mexico with the money and the desire to buy CIntra. BANORTE, Slim, TFM , CEMEX, VITRO, VAMOS MEXICO, etc.

Foreign Privatization of CINTA, it won't happen.

AR385

 
jopavon
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RE: United, Mexicana End Code Share Agreement

Sun Nov 09, 2003 6:43 am

MX330:
"MXA door to Europe is LH. Pulling out of Star Alliance will pull out MX out of Europe. AA Flights to Europe, connections and flights to Mexico represent better possibilities that what LH does."
True to some point, I guess part of the deal is not only selling tickets for a LH flight or IB & BA (if they move to Oneworld), they'll get more money if they at least fly part of the journey to a gateway in the US or Canada as they currently offer various destinations through ORD with UA, BD, OS, LO, SK and through YUL & YYZ with AC. If they move to Oneworld there will be less destinations with one stop if MX delivers at least one leg of the trip in order to get more revenue.

American has 7 destinations in Europe:
Via JFK: Paris, London Heathrow, Zurich. MX doesn't fly there, they go to EWR.
Via OS / KBOS), USA - Massachusetts">BOS: London Heathrow. MX currently doesn't go there.
Via DFW: Zurich, London Gatwick & Frankfurt. MX currently doesn't go there and AA has it's own plenty of flights MX), Mexico">MEX-DFW.
Via MIA: Madrid & Paris. MX doesn't offer other destinations from MIA besides MX), Mexico">MEX and CUN, both well served by AA. They compete, not complement.
Via ORD: Frankfurt, Manchester, London Heathrow & Brussels. AA does ok on its routes to ORD, so little help from MX which two or three more destinations to Mexico from Chicago, but still they compete, not complement.

MX330:
"So if MXA pulls out of Star Alliance will the 767's still be arriving to MX???? Remember they come form SAS..."
Most likely yes, because SAS wants to lease them, so they shouldn't really care if MX leaves or not Star Alliance, a lease is business for SAS.

Rojo:
I agree with you, that they still have plenty of time to reinstate the code-share with UA if they get a Star Alliance investor, or an independent investor soon...but they only have 4 months or so...is CINTRA ready to sell?
 
gigneil
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RE: United, Mexicana End Code Share Agreement

Sun Nov 09, 2003 7:39 am

I'd call it very difficult (if not impossible) to argue that Star is a more integrated alliance than SkyTeam.


I'd call you crazy.

Until NW/KL/CO join, there's no argument on your side.

N
 
JOSEMEX
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RE: United, Mexicana End Code Share Agreement

Sun Nov 09, 2003 8:16 am

>>I had a mice talk to an F/A<<
.............^^^^....

A "mice" talk? So you both dressed like Mickey and Minnie Mouse and talked about whose cheese was bigger? Big grin

[Edited 2003-11-09 00:17:40]

[Edited 2003-11-09 00:18:15]

[Edited 2003-11-09 00:18:53]

[Edited 2003-11-09 00:19:43]
 
ual777
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RE: United, Mexicana End Code Share Agreement

Sun Nov 09, 2003 8:30 am

To call Skyteam better connected than Star is absurd! Just look at the destinations!
It is always darkest before the sun comes up.
 
rojo
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RE: United, Mexicana End Code Share Agreement

Sun Nov 09, 2003 8:41 am

On another post I talked a little bit about CINTRA's situation, so I guess I will post here the facts of CINTRA so everyone understands why MX needs to be sold immediately and for a good amount of money (high value). CINTRA is owned by a federal institute called IPAB, which is the same as the USA - FDIC. IPAB is the new name of the FOBAPROA which was created after the 1994 collapse of the Mexican Peso and of the hole Mexican Economy. During the crisis, most mexican banks went bankrupt after companies and people took their savings out to buy US Dollars and some of them never paid their debts. All this debts, which were unpaid credits given by banks to companies and persons, were transferred to the FOBAPROA and banks were cleaned up. Mexicana and AeroMexico had big unpaid debts with mexican banks and they had their own shares as warranty of the credits, so the mexican banks took control of AM and MX. Since FOBAPROA took control of most of the mexican banks they automatically took control of AM and MX. Later, banks were cleaned up and AM and MX were assets in FOBAPROA's balance sheet.
The FOBAPROA or IPAB is supported by mexican taxes, so in order to spend less taxes cleaning all the mess, they had to sell every company they had in their balance sheet (assets). FOBAPROA started selling all these companies to investors (foreign or local) in order to collect cash and in 1999 they were ready to sell AM and MX, but they wanted to merge both airlines and sell them as one entity in order to get a better deal (they were selling a monopoly). Since Mexico had the TELMEX case which was privatized as a monopoly, the Mexican Fare Competition Agency created by the government didn't allow the merge. During that time, the airline industry was in good shape and there were investors like CO,DL, UA and AA interested in both AM and MX. IPAB thought that if they waited a little longer, the buyers will increase their bids for AM and MX, since they were about to enter an alliance and everything was running smoothly. IPAB valuated AM and MX in their balance sheet in around 2.1 billion USD so they were expecting to get that much money for both airlines. The problem was that in the year 2000 the airlines industry started struggling, so IPAB decided to wait a little longer, but 9/11 finished with their expectations of selling AM and MX for a good price. Today IPAB is facing the problem that the government won't give them more money from tax payers to work and the market value of AM and MX is around 700 million USD. They need to get rid of AM and MX because they have been loosing lots of money and they don't have more money to spend in the airlines. Additionally they need to explain the gap of 1.4 billion USD that they won't get from MX and AM since their market value is a lot less. To see the performance of AM and MX in the year 2003, we have CINTRA's numbers:

NET INCOME

First trimester 2003: -$1,059,726,000 MXP
Second trimester 2003: -$ 698,807,000 MXP
Third trimester 2003: -$ 68,920,000 MXP

Total Jan-Sep 2003: -$1,827,452,000 MXP or

Both airlines have lost -$166,132,000 USD in 9 months...

The government needs to sell them to investors right away. And MX had their meeting last week because they had this crucial contract that will tie them to UA and *Alliance for 7 more years limiting the possibility to sell the airline to a competitor. If AM codeshare contract with DL was about to expire (don't know the day it expires) they would have done the same. MX also modified their business plan to become more attractive to investors, opening new routes, getting new airplanes, analyzing potential destinations and shrinking their labor structure. I imagine they are working on a deal to sell the airline right now, but I really don't know for sure. I just hope they do the right thing this time and sell both airlines so they become more efficient (financially speaking) and in the future we can see the mexican airline industry working in perfect competition...
 
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mx330
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RE: United, Mexicana End Code Share Agreement

Sun Nov 09, 2003 9:00 am

Jopavon:
Ok right. There is no MX in JFK, BOS and DFW. This last one I think that nobody can match AA presence in DFW, its simply dominating. I fly at least twice a year AA (always via DFW) and there is only on name in that airport... AA. The most clear example is DL and AM having almost insignificant presence in DFW (DFW-MX), Mexico">MEX route obviously) after a couple of years ago, in which they were real competence for AA.

MX has decent presence in MIA, of course not comparable to AA's A300 and 757 flights to MX), Mexico">MEX but lets say MX is "in the deal" there.
What could probably help lots its ORD, MX has flights to ORD form MX), Mexico">MEX, DL), Mexico">GDL and MLM considering that ORD is the principal point of flights to Europe (AA) (Frankfurt, Manchester, London Heathrow & Brussels) that sounds a decent move.
Let's also remember that AA will not be the only gate for MX to Europe, if MX gets to join OneWorld, IB and KLM have daily non stop flights to MX), Mexico">MEX (IB has 10x a week) and BA has 3x service to MX), Mexico">MEX which could probably finally be upgraded to daily service with MX and BA working together

Last but not least.
Ok, so I think there is no problem with those 767's that is also good, but the AA deal doesn't keep me away from thinking that lots of the 767's mostly 762 will be given to MX when AA gets the 7E7 (I might be going to far but this is a serious possibility if MX really goes to OneWorld)

That's my "humilde opinion"

Mx330
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AR385
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RE: United, Mexicana End Code Share Agreement

Sun Nov 09, 2003 10:16 am



UAL and Star Alliance may think Mexicana is a puny airline with a small influence in Star Alliance. But how is UAL going to feed traffic South and Central American into its SFO, LAX, ORD hubs. This traffic is very high-premium and usually consists of high-end businessmen from Brazil, Argentina, Chile, etc. some staying in those cities but many connecting on to Europe and Asia. How much more money is UAL going to loose with this dumb move. This traffic is going to go to Aeromexico and Air France in Skyteam.

AR385
 
copaair737
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RE: United, Mexicana End Code Share Agreement

Sun Nov 09, 2003 11:09 am

I think that MX is codesharing on US flights instead of UA flights. On Expedia, they usually show UA codeshares on MX flights, now they show US codeshares instead.
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mattnrsa
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RE: United, Mexicana End Code Share Agreement

Sun Nov 09, 2003 11:39 am

AR385...
It is not UA's "dumb move", but MX's decision to leave. I don't think MX provided much feed from the Deep South, but rather from Mexico and Central America. Anyone from Brazil, Argentina, and Chile would most likely end up on two MX flts before stepping foot on a UA plane. I think Varig provides more feed from that region.

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