Aeromexico the second largest air carrier in Mexico

Aeromexico the second largest air carrier in Mexico

The North American country of Mexico has a long and rich aviation tradition. Mexico’s airlines are not as well known as those of many other countries because they have not developed the extensive international route networks for which carriers of the United States and Europe are famous.

However, the early history of aviation in Mexico was as turbulent and exciting as that of any country in the world. In the first half of the twentieth century, over one hundred airlines started domestic service inMexico.

Many of these airlines later merged with one of Mexico’s two national carriers, Mexicana and Aeromexico. These two carriers have been competitors almost since their beginnings.

Each has strived to be the predominant domestic and internationalcarrier of Mexico. Through a series of mergers, Aeromexico developed a strong domestic route structure linking Mexico City, the United States, and Canada tomost of the tourist destinations of Mexico. Although its international network continues to be weaker than that of Mexicana, it has grown to serve destinations in the United States, Central America, South America, and Europe.

Aeromexico the second largest air carrier in Mexico 1935 

Early Years:

Aeromexico, then called Aeronaves de Mexico, began as a small regional carrier serving the Pacific coast of Mexico in 1934. At that time, it operated flights between Mexico City and the newly developing tourist destination of Acapulco.

It continued as a small, regional carrier until the U.S. air carrier Pan AmWorld Airways purchased 40 percent of its equity in 1940.With the newcapital provided by

Pan Am, Aeronaves de Mexico began acquiring a series of other small carriers along Mexico’s Pacific seaboard.

In 1952, the airline expanded into north central Mexico with the acquisition of Lineas Aereas Mineras, S.A. (LAMSA) from the U.S. carrier United Air Lines. The following year, Aeronaves deMexico purchased Aerovias Reforma to further serve the Pacific coast.

The 1957 opening of service to NewYork City heralded Aeronaves deMexico’s entry into the international air transport market. This same year they joined the International Air Transport Association (IATA), an organization of airlines affiliated with the United Nations and responsible for promoting safe and secure air travel throughout the world.

IATA is the premier organization for coordinating airline policies and procedures and training airline personnel in all aspects of aviation.

Financial Troubles:

Aeronaves de Mexico’s expansion was temporarily halted when a strike in January, 1959, threatened the company’s financial health. The Mexican government moved quickly to assume control of the company, taking official ownership in July of that year. The board of directors appointed by the Mexican government proceeded to upgrade Aeronaves de Mexico’s fleet and merged it with Aerovias Guest, the first Mexican carrier to serve Europe.

Aeronaves de Mexico continued to expand its domestic and international route structure throughout the 1960’s. Its acquisition of Servicios Aereos Especiales (S.A.E.) in 1970 left Mexico for all intents and purposes with only two airlines, Aeronaves de Mexico and Mexicana.

Aeronaves deMexico underwent a second financial crisis in the early 1970’s. In an attempt to revitalize the airline, the aircraft color scheme was changed to red, the Aztec warrior tail design was modernized, and the company name was shortened to Aeromexico.

The company’s financial health improved following efforts to upgrade its fleet and enter new markets in North America opened up by the United States deregulation of its own airline industry in 1978.

However, Aeromexico was forced to declare bankruptcy in 1988 due to economic uncertainty and overcapacity in the Mexican market. The companywas reorganized under the name Aerovias de Mexico, retaining the Aeromexico name for marketing purposes. As part of the reorganization, Aeromexico laid off approximately ten thousand staff, hired industry outsiders to help them improve quality and financial performance, and strengthened their route structure.

The company also purchased 47 percent of the shares of Aeroperu in 1992, allowing it to open a hub in Lima, Peru. This provided the first South American connecting point for Aeromexico, allowing them to tie together the Americas from Canada to Argentina.

The financial crisis that struck Mexico in 1994 brought Aeromexico and its competitor Mexicana to the brink of bankruptcy. In 1995, both companies were purchased by the Corporacion Internacional de Aviation (CINTRA), a consortium of banks. The two airlines now cooperate on ground handling, training, and computer reservations.

These efforts have allowed the two carriers to improve service and lower costs. Although both companies are subsidiaries of CINTRA, they remain separate entities and continue to compete in many areas.

Aeromexico continues to be the stronger domestic competitor and maintains a fleet of Boeing aircraft. Mexicana remains the dominant international competitor and has begun purchasing Airbus aircraft to serve its markets. Aeromexico has joined the

SkyTeam Alliance composed of Delta, Air France, and Korean Air Lines.Mexicana is a member of the STARalliance, whose chief members include United Air Lines, SAS, Lufthansa, Varig, Air Canada, and Singapore Air Lines.

With the growth of the North American free trade area, which is lifting trade restrictions between the United States, Canada, and Mexico, the prospect for further growth in the Mexican air transport market looks promising.

In addition, growing trade between South America and the United States is providing Aeromexico with opportunities to link both areas.

Despite several periods of financial crisis, Aeromexico has survived and looks forward to continued growth.