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

Hypothesis: What If The Government Shut Down Am?

Mon Jun 04, 2007 1:43 pm

We've been reading that AM is in real trouble since its costs are too high. If we are honest the best solution for the airline should be bankruptcy and then arise as a slimmer and better focused carrier. Please no hurt feelings!!! It's the best solution for the company not the employees!

We all know the conditions in the market are quite difficult and new comers are grabbing a nice piece of what used to be AM gold mine. AM's value in the market is really low. Let's suppose, for a minute, that the LCC in Mexico and MX, all in private hands, lobby government to ground AM for good sake arguing that they should help strength the aviation business for all carriers in the domestic market (Volaris, Interjet, Click, Mexicana, Viva, Alma & A Volar), and end up with one so called flag carrier (MX). Long-haul fleet transfered to MX as well as some destinations not in MX's current international map. Domestic market split between the airlines being able to adapt to that new market conditions.

The scenario to me looks interesting: government ends up with its tax-drain in an airline that is not profitable, it strengthens new LCC (with big airbuses orders) and MX since there would only be left a flag carrier. Obviously the big winner would be the government leaving behind all the debt & the labor issues.

The big losses: employees, loyal passengers and airline itself since it has a good presence in some markets and with a reputation of ontime performance and above level meal service onboard.

Please keep in mind this is a discussion. What I just wrote is a hypothesis of something that could happen, it is not real nor a rumor, but an idea to discuss and read some of your opinions.
Posts: 63
Joined: Tue Sep 26, 2006 6:21 am

RE: Hypothesis: What If The Government Shut Down Am?

Tue Jun 05, 2007 5:58 am

I think that would be a terrible or catastrophic scenario. Mexico (read families, employees) and the industry would loose a lot. AM has a lot of legacy, and althought it has had more support from the goverment when Cintra than MX in the last decade, the airline needs to be rescued and continue to grow. We need two flag carriers. MX and AM or AM and MX (however you want to call it). Mexico has a big potential market in the future to have 2 big airlines. Just like Brazil has Tam and Varig. Aeromexico i think it will be fine...with a lot of understanding of the workers of the current finantial situation and good buyers which i truly hope is a mexican company.

As well as MX. I myself am a MX loyal passenger and i worked there years ago and love it, and i really hope everything gets better there as well because right now is not... I read in todays news at El Universal stilll big issues about FA conflict, and i also feel as well that probably Posadas Groups was a big mistake for MX. I really havent seen any grow in MX but just in Click expansion. MX closed BWI, and left PHX pending. No word for new wide bodies promised since 2 years ago. No new flights to South America or Asia...dont even think about Europe. Its sad.  Sad

Probably the problem is that Posadas got so much debt that doesnt want to risk anything in new routes.

I really feel both airlines are flag carriers. If u think about it MX is a flag carreir between MEXICO-US maket, Canada-Mexico, Central America-Mexico and pretty much South America as well.. BOG, CCS and EZE are big for them. The excpetions are MAD, CDG, GRU, SCL and NRT.,..but 5 destinations dont change the fact in the continent MX is well known..

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