Airline industry once more set for take off
MEXICO'S SMALL BUT RAPIDLY EXPANDING REGIONAL AIRLINE COMPANIES HAVE MANAGED TO SURVIVE THE NEGATIVE EFFECTS OF SEPT 11TH THANKS TO THEIR QUALITY OF SERVICE AND OVERALL FLEXIBILITY

Aeromar, Mexico’s leading commuter airline with code share agreements with AeroMexico, Mexicana and United.

None of the world’s airlines was spared when the crisis triggered by the Sept. 11th terror assault on the United States devastated the international air travel industry. In Mexico’s case, however, it would appear that smaller privately-held players stayed somewhat more secure in the shelter of their respective niches while the storm raging all around them wreaked havoc on their state-run competitors–not that they, or anyone, got off scot-free.
Even a small company like Aeromar, which has a fleet of 14 ATR turboprops, saw its passenger numbers fall 30% for the year. The situation was particularly hard on the flights it runs under code-sharing arrangements with big time operators Mexicana, AeroMexico and United, the ones most likely to attract connecting passengers from the United States.

According to Aeromar’s president, Juan Ignacio Steta, the company will do whatever it takes to ride out the bad times, with just two exceptions: no layoffs and no fare discounting. “Over 85% of our revenues come from business travel, which traditionally gives you the highest margins,” Mr. Steta notes. If conditions do not ease, he says he would consider asking employees to take voluntary salary cuts or furloughs, though admittedly this would be a hard sell to the unions that now represent flight and cabin crew. But sending people home is not an option. Nor will there be a flurry of cut-rate fares and promotional deals by way of trying to drum up new business.

With over 230 flights a day, Aerolitoral is the leading regional airline in Mexico.

“We have been criticized for our high fares, but when you look at the level of service, reliability and punctuality being offered, there’s no comparison. You have to realize 85% of our passengers are business people, technical experts and government employees, and what they all demand is punctuality,” Mr. Steta explains.
Just as when deciding on a restaurant, there’s nothing wrong in going for the more pricey option as long as you get value for your money. As part of its five-star service, Aeromar runs its own terminal at Mexico City Airport, where passengers can enjoy free parking and a full range of amenities without having to go through the labyrinthine main terminal complex. “All you do is tell the flight attendants where you’d like to be dropped off,” says Mr. Steta. While the downturn persists, Aeromar plans to bolster its messenger service and package delivery operations and study the bottom baseline possibilities of upgrading to regional jets as soon as business gets back to normal.
Aerolitoral is another regional specialist but one with a difference: it does not service the Mexican capital at all. Having started out in 1991 with two aircraft plying between three Gulf Coast cities, the airline now operates over 230 flights daily from its headquarters in Monterrey, offering direct connections between 37 small and mid-sized cities, avoiding stopovers and detours through crowded hubs.

They also fly to Tucson, San Antonio, and Phoenix and are at an advanced stage of negotiations for a strategic cooperation accord with Delta that will give Aerolitoral additional penetration into the southern United States. The distances involved are small enough for the company to cover their routes with 19-seat Fairchild Metros, while the SAAB 340B craft they have lately been acquiring for the more heavily transited routes, seat 33 passengers.
The figures speak for themselves: 700,000 flights in ten years of operation with not one fatal accident, a cancellation rate of 0.3% and 90% of takeoffs on time. “Getting there on time is the critical thing for the business traveler,” says Aerolitoral’s President and CEO, Raul Saenz. “Obviously the markets we staked out first were in Mexico’s industrial heartland because that’s where the demand existed. But we are aware that many of our destinations are within easy reach of present and future tourist zones, like Guadalajara, which puts you just a short way from resorts like Mazatlan, Manzanillo, Puerto Vallarta, and Acapulco.”

By the same token, Aerolitoral is the only carrier offering scheduled service to Guerrero Negro in Baja California, a zone that Mr. Saenz is convinced is going to see a lot of quality upscale development in the future. “As the tourism industry develops and grows in these areas, we will, too,” he says, and predicts that is when its strategic alliance with Delta will really show results.