WORLD ROUTES: Mexico City Capacity Constraints Influence Airline Business Models

Capacity constraints at Mexico City must be urgently addressed, a panel on Latin American aviation said today at World Routes. Speaking during a World Tourism Summit session, Enrique Beltranena, chief executive officer of Mexican low-cost carrier Volaris said the situation at Mexico City had prompted the airline to prioritise developing a point-to-point network in order to continue to grow. “We cannot keep developing like this – everyone in the airports and airline business need to be thinking about Mexico City. We strongly need to think about point-to-point,” he said.

Beltranena called for the airport authority to harness new technology in order to boost efficiencies, saying that infrastructure development alone could take more than ten years to build. “Why can’t we make Mexico City viable? Clearly there is a problem with technology. We can’t just say the airport is saturated – we need to invest in technology and make it viable,” he said.

The Volaris boss added that he found it far easier to deal with and negotiate with the private airport groups in Mexico, who are focused on profitability. “I believe the privatisation process was not done in the right way but it is better to deal with people who are concentrating on developing their airports. I can sit down with them [the private airport groups] and develop solutions. Mexico City is different – in the last 12 years the management of the airport left many opportunities to improve. The government has now inherited a complicated situation.”

While panellists Ruben Martinez, vice president corporate strategy at Aeromexico and Fabricio Cojuc, executive vice president and chief planning and commercial officer, Aeromar agreed with Beltranena’s assessment, the panel believe change at the airport is still possible. “It is important for us to leave this forum with hope – we can still develop tourism and our economies,” said Beltranena.

Regulation within Latin America was also highlighted during the session. Joseph Mohan, Copa Aairlines’ president of commercial said the Latin American regulatory regimes are complex. “Unlike in the US or Europe where there is just one regulatory body, we fly to 29 countries and each of those have different realities – some have lack of access to the market, government funded airlines, other issues,” he said.

He noted though that the region continues to offer a huge amount of growth potential for carriers. “Despite that, we continue to see a huge amount of potential in Latin America. We believe we would be able to have huge growth if the regulatory environment stays consistent and fair,” he added.