For the last several years, Aeromexico has been a one note airline. It’s been all about Mexico City, but now the airline is finally trying to grow out of that shell once again. With Delta as its joint venture partner, Aeromexico seems to be thinking there’s a lot more opportunity out there. Or at least, that’s what Delta is telling the airline.
If we go back 10 years, Aeromexico had a life outside of Mexico City.
Aeromexico July 2014 Non-Mexico City North America Route Map
The airline connected Guadalajara to several important cities in Mexico alongside a ton of California flying which serves that migrant/ethnic traffic. From Monterrey, it had 15 domestic destinations plus Las Vegas and San Antonio. Tijuana served 7 in addition to acting as the gateway to Shanghai and Tokyo since Mexico City was too hot and high to go nonstop. The airline even served other cities around Mexico like Ciudad Juárez, Culiacán, and Hermosillo with a handful of flights to important destinations. That wouldn’t last.
Even before the pandemic, Aeromexico had pulled back to a shell of its former self outside of Mexico City. After all, Volaris and Viva Aerobus were eating the airline’s lunch, and Interjet was the wildcard, losing money and making life difficult for everyone. Aeromexico just couldn’t compete, so it didn’t.
The airline still had a larger presence in Monterrey and Guadalajara, but nearly everything else had become a spoke serving one of those big three cities. And then when the pandemic hit, even that mostly went away.
Not only did the airline shrink during the pandemic, but it kept pulling back each subsequent year. By 2023, Aeromexico’s domestic market included a mere 5 routes that didn’t touch Mexico City or the new Santa Lucia airport that the government decreed to be the only way to grow in the region. Those five routes?
- Guadalajara – Monterrey, Tijuana
- Monterrey – León, Querétaro, and San Luis Potosí
All of those were exited after that summer with the exception of Monterrey – Querétaro. Sure there was still some flying from places like Guadalajara to the US, but this was bad.
Aeromexico July 2024 Non-Mexico City North America Route Map
Relying on slot hoarding at Mexico City was never a winning growth strategy. After all, the government has done nothing but shrink the number of slots available at the airport, so the airline had no choice but to get smaller if it couldn’t find another place to put airplanes.
Of course, shrinking wasn’t a big issue when the airline filed for bankruptcy protection. In fact, that was its best plan until it emerged leaner in March 2022. But that was far from its only issue.
Aeromexico’s joint venture with Delta was a lifeline, but in 2021 the US Federal Aviation Administration (FAA) put Mexico down to category 2 meaning that the joint venture with Delta was effectively on ice. Aeromexico couldn’t grow into the US even if it wanted to do so. This wasn’t lifted until after summer 2023. The joint venture is still in a tenuous situation thanks to politics putting a wrench in any US/Mexico air cooperation, now Aeromexico is making moves again… at least in the US.
In the domestic market, the airline is still effectively dormant. It continues to fly the Monterrey – Querétaro route, and it brought back Guadalajara – Tijuana for summer, but that’s it. It has now made Monterrey the gateway for Asia flights, but there is very little feed to be had there. The ULCCs have just pushed Aeromexico out of everything outside Mexico City.
But in the US market, growth abounds. Aeromexico acted like Delta was running its network planning department initially. (Actually, it may very well be doing that….)
It brought back a slew of flights into Delta hubs and focus cities from throughout Mexico with service starting in 2024, trying to take advantage of Delta’s massive feed opportunities. Those routes?
- Atlanta – Guadalajara, León, Mérida (already exited), Monterrey, Querétaro
- Boston – Mexico City
- Detroit – Guadalajara (already exited), Querétaro
- Raleigh/Durham – Mexico City
- Salt Lake City – Mexico City (winter only), Monterrey (already exited)
All of these routes were meant to feed Delta at lower cost than Delta could feed itself. And the joint venture could take advantage of big traffic flows on either side of the border.
None of this was particularly surprising, but it’s what came later that I found more interesting:
- Denver – Monterrey flies weekly in winter, presumably for Mexicans looking for a ski vacation
- McAllen – Santa Lucia
- Atlanta and Los Angeles – Manzanillo flies weekly in winter, presumably for Americans looking for a beach vacation
- Tampa – Mexico City
In the case of the former two, it looks like Aeromexico is actually doing its own network planning, finding opportunities to make the airline attractive to Mexicans. For the latter two, well, it looks like Aeromexico is just doing Delta’s work, probably with some free aircraft time that makes it even cheaper to operate and provide utility for Americans in those cities. Maybe Tampa is a mix of both.
It didn’t stop there. The airline has added even more flying to the US with an eye on what’s most valuable for Mexicans. It is doing Mexico City – Newark and Washington/Dulles. Neither of those are Delta hubs, obviously, but they are gateways to important cities (and New Jersey) that should have service from Aeromexico if it’s going to be Mexico’s only full-service airline.
The airline’s most recent add is another hard turn in a different direction. It’s flying from Miami to Cancún once daily year-round.
This is a hotly-contested market, but it’s one without a premium option from the Mexico side. It’s a big market, and it’s a very short hop, but it looks like the airline has realized that if it wants to compete in Cancún, it probably needs to be able to get those people to the unofficial capital of Latin America in Miami. Further, Aeromexico is partners with LATAM, so this can create connecting opportunities. That shouldn’t be a top priority since connecting through the US if you’re a foreign national is absolute hell, but it can help fill some seats.
Is this going to make money? Meh, probably not. But I can see the strategic value if it helps to get more Cancún travelers using the airline for the rest of their travel needs. Aeromexico can’t just be all about Mexico City and Delta — ok, maybe it can — but it seems like it wants to break out beyond that box.
Am I skeptical this is going to work? I sure am. But it’s very low risk, and it’s worth trying.
24 comments on “Aeromexico Tries to Grow in the US”
“Is this going to make money? Meh, probably not. But I can see the strategic value if it helps to get more Cancún travelers using the airline for the rest of their travel needs. Aeromexico can’t just be all about Mexico City and Delta — ok, maybe it can — but it seems like it wants to break out beyond that box.”
If they really want to focus more on Cancun, perhaps talking with Sen.Tedd Cruz as he is something of an expert in that subject.
“Aeromexico acted like Delta was running its network planning department initially. (Actually, it may very well be doing that….)”
A number of DL execs have rotated through AM via secondment. The current AM CCO was at DL for a long time…
AM’s network deployment mirrors DL’s network strategy with their other partners. Build depth and breadth at DL hubs THEN start opportunistically going into OA hubs with the partner’s metal
Interesting insight to confirm the DL human capital connection which of course makes a lot of sense. Thanks!
Sometimes it feels like VS is also run by DL’s planning department.
When you own 49% of a company and have 3 members on their BOD (one of which is Ed…), I have to imagine you have some sway in network planning decisions
Sounds like Aeromexico dba Delta Connection over the border without some pilot contract restrictions.
I notice that NYC-CUN is big 3 + B6 only (well even AA is just seasonal). Why is no low cost airline US or mexico competing in this presumably popular route? JFK is slot constrained, LGA is right outside the perimeter rule, but EWR should be doable.
LGA-CUN couldn’t work anyway because there’s no US Customs pre clearance at CUN.
If some of these other services are off to as strong of a start as TPA-MEX, that bodes well for Aeromexico. TPA-MEX is already scheduled for an upgauge at the end of October from an Embraer to a 737.
Several factors have to be considered and help explain why AM is doing what it is doing.
1. AM filed for chapter 11 reorganization during covid and significantly reduced its costs. It obtained lower costs in part to compete with the growing Mexican low cost/ultra low cost segment of the industry. Growth from a lower cost base helps keep costs down and gain or regain share.
2. The US DOT said that it would require AM and DL to end its joint venture because of the Mexican government’s lack of transparency regarding slot allocation processes at MEX. DL appealed the process and has said on earnings calls that they feel confident the DOT will come up w/ alternative processes to a complete termination of the JV. Routing connecting traffic away from MEX helps minimize the risk in case there are limitations on the JV.
3. DL has previously said that the AM relationship helps to offset its lack of a hub in Texas where AA and UA have an advantage in flying from DFW and IAH to smaller Mexican cities including with regional jets. Although secondary Mexican city segments to DL hubs are longer than for AA or UA’s Texas hubs, AM’s lower costs might allow AM/DL to compete just as effectively.
The real definition of AM’s network will come w/ a decision regarding the AM/DL JV and whatever restrictions are likely along w/ potential changes in how Mexico allocates slots at MEX all of which could come in the next couple months.
Delta is desperate to get a slice of what American Airlines has in Latin America. The airline is an also-ran in the market, even with AM and LATAM as partners, and none of that is likely to change.
I think it is safe to say that any profit-motivated company wants a piece of the revenue that its competitors have; DL’s ability to pick off Latam and get a JV approved, something AA could not do, does give DL strategic advantages which neither AA or UA has.
AA is clearly the size leader in Latin America but DL and UA are very similarly sized in revenue and profits -more so than in any other region. DL is no more or less of an also-ran than UA in Latin America.
and DL’s JVs with AM and LA give it advantages that neither AA or UA can duplicate. while AA is the ten ton gorilla in MIA where it monopolizes US carrier service to Latin America, LA has as much capacity in multiple S. America markets from MIA as AA has.
UA hasn’t had even close to a comparable presence in Florida to AA or DL in decades but it is certain that DL and UA would very much like to have a piece of what AA has. The future of B6 and NK does provide the potential for a restructuring of carrier strength in S. Florida; it will be very interesting to watch it play out not just in Mexico but also in S. America as a potential transnational competitor to LA could emerge as well as among the big 3 in S. Florida.
Being a transcon commuter and DL platinum medallion from LAX in the late 90s, I recall that T5 had multiple evening Aeromexico flights going to places like Guadalajara, Leon Guanajuato, Hermosillo and Mexico City among others.
I remember being surprised by the number of cowboy hats, originally surmising that CO passengers en route to Houston had accidentally navigated across the “secret” T5/T6 underground passage.
I have always enjoyed Mexico and the Mexican carriers, from the first time I flew a Mexicana B727 from ORD to MEX in 1974! The Mexican ULCC’s do a good job (IMHO), except in one vitally important area! Their websites are deplorable! Frequently, they simply don’t work! I keep re-booting, using different browsers and always with the same result! Even after you change the language from Spanish to English they will frequently change back to Spanish without warning! Anytime I mention this to my friends they agree – they have similar problems – so it’s well known!
In the unlikely event that you can actually speak to a real live person, they can’t be nicer! Helpful and friendly! But getting through to them through badly designed menu options is a test of patience.
If they – Volaris and Viva Mexico in particular – could sell their services using their U.S. partners – Frontier and Allegiant – I suspect that their traffic would improve significantly! Technically, I’m sure it’s quite feasible, and I’m not suggesting selling seats as a code share – display and sell as the operating carrier, but on the U.S. platform.
Any thoughts…….???
Thanks!
Hi, maybe you enjoyed Mexicana, but Aeroméxico was terrible, until it went broke, in the late 80s or early 90s, if not mistaken. Now it’s actually quite good, but expensive. Btw, it’s Viva Aerobús, not viva mexico!
Of course Yosef! Thanks for the correction! E
Thanks for the analysis on this.
As an outsider who isn’t very familiar with routes/demand from MIA or CUN (beyond the impression that NYC – MIA and MIA – Caribbean / South America seem to have nearly bottomless pits of demand), I was surprised to hear that MIA-CUN is such a popular route.
Maybe it’s because I’ve spent most of my life living in areas with decent snowfall (where the traditional “winter flights to let pasty white northerners escape the snow so that they can spend time on the beach” abound), and I know that MIA is much more than beaches, but I never think of “beach destination to beach destination” routes as having that much demand. Very fascinating and interesting to learn.
Believe it or not there are times when living in a beach locale can get boring as you see the same places over & over. So therefore a change of scenery is needed. A good example is living in Miami & flying to Hawaii or Brazil. How many times can one spend time on the beaches in & around Miami before getting board? This is especially true during spring break.
Great point. Also, many locals just aren’t into the area’s attractions unless they have out of town guests visiting; it’s easy to take the attractions for granted and locals typically prefer to avoid the tourists. Even locals that like the “attractions” in the area in the broad sense tend to prefer less touristy areas (e.g., beach areas with homes/condos for residents instead of resorts for tourists, or the casinos in Vegas that cater to local gamblers).
Ask the average person from NYC the last time they hit Times Square or the average person from Vegas the last time they hit the Strip (assuming the person doesn’t work on/near Times Square or the Strip). Odds are good (no pun intended) that the person won’t remember, that it will be shortly after they moved to the area, or that they only will have visited because they were dragged there by friends/relatives from out of town.
I lived < 1 mile from the ocean (not in FL) for 5 years and the only time that I visited the tourist strip on the nearby beach was when guests insisted I take them there
Excited to see Aeromexico expanding in the US! More flight options and better connectivity for my travel plans. Can’t wait to explore new destinations!
I was browsing Google flights out of Tijuana in May and caught when they released the schedule for TIJ GDL and was able to snag a business class stay for only 300 bucks. The plane was quite full so the demand must be there.
I dont think your analysis of MIA-CUN is accurate. It’s all about somehow trying to access point of sale Miami to get them to Cancun. It has nothing to do with trying to get point of sale/ origin Cancun pax (are there any?) to Miami or to try to rope them into flying Aeromexico instead of Via to Mexico City. Not sure why you thought that. AS to whether they will be successful… who knows? TBD. And it’s CERTAINLY not about trying to feed LATAM at Miami. If you look at T100 you’ll see that LATAM routinely flies 90%+ load factors on all their Miami routes… They dont need what would certainly be low yield feed touching any of their Miami routes to make their Miami routes successful. I’d reassess your analysis, as I do not think it’s accurate.
Couldn’t agree more. This is about getting POO MIA. Think bachelor/bachelorette parties, destination weddings, weekend getaways, etc. There’s enough high-end leisure in Miami that it’s worth a try
Jason – I disagree. Point of sale Miami is a losing proposition for Aeromexico. American wins that battle pretty easily for a full service carrier.
There is no point of sale Cancun though going to Miami. Literally the point of sale for Miami-Cancun is either in miami or behind Miami. Only a very small percentage originates in Cancun or behind.
I’m
Very very aware that AA is mostly point of sale AA. The only thing I can think
Is that this is is a play to build a sky team presence in Miami and get some of the market. DL seems to be doing that just fine. They’re flying mia-Dca and others with high load factors – no clue on the fare. And no clue where those pax on Dca-Mia are coming from given AA strength on both ends. But I definitely don’t think AM could possibly rely on a Cancun point of sale, and I’m skeptical of this effort. Tbd!!