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.

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 priorities developing a point-to-point network in order to continue to grow. โ€œWe cannot keep developing like this โ€“ everyone in the airports and airline business need to be thinking about Mexico City. We strongly need to think about point-to-point,โ€ 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. โ€œWhy canโ€™t we make Mexico City viable? Clearly there is a problem with technology. We canโ€™t just say the airport is saturated โ€“ we need to invest in technology and make it viable,โ€ 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. โ€œI believe the privatization 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 โ€“ in the last 12 years the management of the airport left many opportunities to improve. The government has now inherited a complicated situation.โ€

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

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

He noted though that the region continues to offer a huge amount of growth potential for carriers. โ€œDespite 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,โ€ he added.

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Linda Hohnholz

Editor in chief for eTurboNews based in the eTN HQ.

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