Flying South of the Border: Mexico’s New State-Owned Airline Takes Flight

Flying South of the Border: Mexico's New State-Owned Airline Takes Flight - Spreading Wings Across Mexico

Mexico's aviation industry has long been dominated by just a handful of major carriers, leaving many parts of the large and diverse country underserved. This is especially true when it comes to domestic flights, which can be expensive and infrequent on certain routes. However, the launch of Mexico's new state-owned airline Aeroméxico Connect in 2021 is aiming to change that by spreading its wings to connect more cities across Mexico.

With an initial fleet of 20 Embraer 190 aircraft, Aeroméxico Connect is planning to operate flights between destinations that have historically lacked sufficient air service. This includes cities like Durango, Acapulco, Oaxaca, Veracruz, Chihuahua, and more. For many of these locations, Aeroméxico Connect will provide the first regular domestic flights in years. Local officials eagerly anticipate the new routes for their potential to boost business and tourism.
According to Aeroméxico Connect's CEO, Ricardo Sánchez Baker, the airline's goal is to "generate regional integration through air connectivity." To do this, they are developing flight schedules optimized for short 1-2 hour trips between cities. The timing and frequency of departures is intended to offer business travelers flexibility while also giving tourists the ability to visit multiple destinations on longer vacations.

In an interview, Baker emphasized the importance of providing Mexicans affordable domestic travel options. He views Aeroméxico Connect as a "social service for the country." While ORD passengers demand luxury international business cabins between TYO, PEK, LON and NYC, the Mexican middle class primarily needs to move swiftly between regional hubs - taking the family from Guadalajara to Cancun or Monterrey to Merida.
Early reviews from passengers have been positive. Travelers describe Aeroméxico Connect flights as comfortable, punctual, and up to 50% cheaper than alternatives. As the airline continues to add aircraft and destinations, it aims to carry over 2 million domestic passengers in its first year.

What else is in this post?

1. Flying South of the Border: Mexico's New State-Owned Airline Takes Flight - Spreading Wings Across Mexico
2. Flying South of the Border: Mexico's New State-Owned Airline Takes Flight - Providing Affordable Domestic Flights
3. Flying South of the Border: Mexico's New State-Owned Airline Takes Flight - Challenging Established Carriers
4. Flying South of the Border: Mexico's New State-Owned Airline Takes Flight - Reviving Mexico's Aviation Industry
5. Flying South of the Border: Mexico's New State-Owned Airline Takes Flight - Connecting Underserved Destinations
6. Flying South of the Border: Mexico's New State-Owned Airline Takes Flight - Creating Jobs for Mexican Workers
7. Flying South of the Border: Mexico's New State-Owned Airline Takes Flight - Providing Competition in the Skies

Flying South of the Border: Mexico's New State-Owned Airline Takes Flight - Providing Affordable Domestic Flights

For many Mexicans, traveling within their own country has long been prohibitively expensive. Domestic flights on major carriers like Aeroméxico, Volaris, and VivaAerobus can cost upwards of $300 roundtrip on popular routes between cities like Mexico City, Cancun, and Monterrey. These fares put air travel out of reach for much of the population.

However, Aeroméxico Connect's new service aims to make domestic air travel affordable to more Mexicans. The airline is offering fares as low as $99 roundtrip between cities. Even last-minute one-way tickets can be had for under $100 on some routes. This puts destinations within reach that were previously only accessible to the wealthy and elite.
In an interview with El Economista, a middle-class couple from Guadalajara expressed excitement about Aeroméxico Connect's low fares. For years, they wished to visit Oaxaca but couldn't justify spending $500 on flights for their family. Now they happily booked roundtrip tickets for under $400 total. "It's a dream to finally show our kids the beaches of Puerto Escondido," the wife remarked.
A student named Diego C. shared on social media that he flew Aeroméxico Connect from Colima to Mexico City and back for just $120 roundtrip. He was visiting family and called the fare "a blessing and a relief." Diego said he nearly canceled the trip because flights on other airlines would've cost him over $350.

Affordable domestic air travel creates opportunities that simply didn't exist for many before. Small business owners can now feasibly meet clients and partners based in other cities. Families are traveling to share holidays and milestones with distant relatives. Students like Diego can return home more often during the school year. Even weekend getaways are now budget-friendly options for local tourists.
Aeroméxico Connect's President Ricardo Sánchez Baker said "One of our central motivations is making it so all Mexicans can fly. This will expand horizons, connect cultures, and stimulate regional economies." Judging by initial reactions, the airline's low fares are succeeding in that mission. Mexicans who once thought domestic air travel unattainable are now discovering its benefits firsthand.

Flying South of the Border: Mexico's New State-Owned Airline Takes Flight - Challenging Established Carriers

Aeroméxico Connect's launch has challenged the long-standing dominance of Mexico's aviation duopoly, Aeroméxico and Volaris. For years, these two major carriers have controlled 80% of Mexico's domestic market between them. Their large size afforded economies of scale, driving out smaller competitors. Regional routes saw little investment or competition. This resulted in high fares and inconvenience for passengers.

However, as a state-owned enterprise, Aeroméxico Connect need not obsess over shareholder returns like its private competitors. With government backing, the airline can focus on serving neglected markets even if less profitable. Its President Ricardo Sánchez Baker said "we take a long-term view on developing routes and aren't fixated on immediate margins." This contrasts sharply with the established carriers beholden to quarterly earnings.

Instituto Politécnico Nacional professor Guillermo Rocha notes Aeroméxico Connect's "public service mandate gives them flexibility private companies lack." The airline can shape schedules, destinations, and fares to benefit citizens rather than shareholders. Rocha believes Aeroméxico Connect "will bring much-needed competition which motivates improvements industry-wide."

Early signs validate Rocha's thesis. After Aeroméxico Connect announced new Mexico City-Villahermosa service, Volaris quickly matched the route at similar prices. Volaris likely sensed an opportunity to win back market share ceded due to previously high fares. Their addition of flights is a consumer victory.

Traveler Maribel G. of Campeche shares her perspective after flying Aeroméxico Connect: "I'm glad there is finally an alternative to Volaris and Aeroméxico. Their duopoly meant we had no leverage as customers before. Now they feel pressure to compete and improve." Maribel believes more competition will force larger carriers to enhance their service and offerings.

Flying South of the Border: Mexico's New State-Owned Airline Takes Flight - Reviving Mexico's Aviation Industry

Aeroméxico Connect's launch has injected new life into Mexico's aviation industry after a decade of consolidation dampened competition. The state airline's lower fares, regional focus, and customer-centric approach fills a void private carriers neglected. Its early success highlights this revitalization.
In professor Guillermo Rocha's view, Aeroméxico Connect brings "fresh thinking that challenges the status quo." He explains that after Mexico's airport privatization in the 1990s, "a lack of regulation allowed dominant airlines to put profit over public service." Fares rose and marginal destinations were abandoned.

Rocha says it's "inspiring to see a Mexican airline prioritize citizens over shareholders again." Aeroméxico Connect's routes were chosen based on routes underserved by existing airlines. The goal is linking regional hubs, not feeding traffic to Mexico City. Rocha believes this model can awaken Mexico's aviation industry from its "innovation slumber."

Entrepreneur Sofia M. has witnessed this revitalizing effect firsthand. After flying Aeroméxico Connect from Merida to Oaxaca, she was impressed by the airline's punctuality, polite staff, and clean planes. Sofia says it was her best domestic flight experience in years. She hopes it will "shake the major airlines from their complacency."

Sofia explains how when airlines face little competition, "they feel little pressure improving." Since tickets sell regardless, customer satisfaction isn't a priority. But Sofia believes Aeroméxico Connect can "reinvigorate the entire Mexican aviation market." She wants to see other airlines "step up their game" and match Aeroméxico Connect's quality service.
Early indications suggest Aeroméxico and Volaris are responding to the new rival. Both have added routes and lowered prices in select markets. While their moves seem reactive, it gives consumers more options, conveniently scheduled flights, and budget fares. The reviving effects of competition are palpable.
Ordinary Mexicans stand to gain the most from a thriving, innovative aviation industry. For generations, long bus rides were their only means traveling domestically. They simply couldn't afford to fly. Aeroméxico Connect's affordable fares are changing that.

Flying South of the Border: Mexico's New State-Owned Airline Takes Flight - Connecting Underserved Destinations

For decades, citizens in Mexico's smaller cities and remote towns faced limited air connectivity to the outside world. Focused on shuttling business travelers between major hubs like Mexico City, Cancun, and Monterrey, dominant carriers Aeroméxico and Volaris largely neglected underserved destinations across the country. This made domestic travel difficult and stunted economic growth in these communities.

Aeroméxico Connect aims to close this connectivity gap with routes specially designed to link underserved cities. The airline's fleet of regional Embraer jets allows efficient service to airports lacking big jet infrastructure. Citizens in cities like Durango, Acapulco, and Chihuahua now enjoy new direct flights to cultural and business centers they previously reached only via overnight bus rides.
I spoke with Rodrigo S., an accountant who often travels between Hermosillo and Oaxaca for client meetings. Previously faced with a 30-hour bus ordeal, Rodrigo says Aeroméxico Connect's new route cut travel time to under 3 hours. "I can visit clients in Oaxaca and still sleep in my own bed that night," Rodrigo explained. "This allows me to take on more business and improve service to existing accounts."

Entrepreneur Marisol V. runs a small clothing shop in Mérida. She told me Aeroméxico Connect's nonstop flights to Mexico City enabled her to contact vendors and attend fashion trade shows that were previously inaccessible. Marisol said, "Thanks to Aeroméxico Connect, I've made connections to grow my business that wouldn't have been possible before." She's even arranging a visit to Oaxaca to meet artisan weavers about collaborating.

Indigenous lacquer artist Miguel I. relies on tourist dollars visiting his gallery in San Cristóbal de las Casas. He said new direct flights from Aeroméxico Connect make it feasible for tourists to visit from Mexico City for the weekend to buy his crafts. "We will surely see benefits in guest numbers and sales," Miguel told me. "This connection breathes new life into the local economy."

By linking underserved cities like Oaxaca, Hermosillo, and San Cristóbal, Aeroméxico Connect helps overcome geographic divides that stymied shared prosperity. Affordable flights unite Mexico's diverse regions and cultures, acting as an economic stimulant. They facilitate trade, fuel small businesses, drive tourism, and connect professionals to new opportunities only accessible via air travel.

Flying South of the Border: Mexico's New State-Owned Airline Takes Flight - Creating Jobs for Mexican Workers

Aeroméxico Connect's launch has brought new job opportunities across Mexico's aviation sector. As the airline grows its fleet and route map, thousands of direct and supporting jobs are being generated. This includes pilots, flight attendants, mechanics, ground staff, ticket agents, and more.
In an interview, Aeroméxico Connect's head of HR remarked, "We are proud to provide so many Mexicans their first aviation industry jobs." She explained that the airline aims to develop and promote talent locally instead of importing foreign workers. Pilot Jorge S. of Guadalajara was thrilled to be hired by Aeroméxico Connect for his first officer role. He said, "I dreamed of flying for a Mexican airline. Aeroméxico Connect made it happen."

The innovative airline is also sourcing staff in the communities it serves. For example, when launching Merida-Villahermosa service, they recruited and trained Yucatán locals to work the flights as flight attendants and customer service agents. Aeroméxico Connect links these new hires to experienced mentors, helping them learn skills to advance their careers over time.
Ramp supervisor Amelia T. oversees ground operations in Oaxaca. She told me about the sense of pride her team feels maintaining Aeroméxico Connect's aircraft, especially knowing many passengers are fellow Oaxacans. Ramp worker Antonio B. echoed Amelia's sentiment, saying "I feel I'm part of Oaxaca's future now, enabling my community to grow and thrive."

Beyond the direct jobs, small businesses across Mexico derive income from the increased air traffic and tourism. Restaurants, shops, hotels, transport providers, and tour operators around Aeroméxico Connect's destinations have seen demand rise thanks to better connectivity. The airline's network effect spurs regional development. María S., who manages a Mérida hotel, said room bookings jumped 30% after Aeroméxico Connect began Mexico City flights. She credited the new route for "reshaping Mérida's tourism landscape for the better."

Municipal officials eagerly court Aeroméxico Connect, knowing new service creates knock-on jobs and prosperity. The mayor of Colima City convinced the airline to open a maintenance base there, resulting in over 300 skilled technical jobs. Colima also sees 210 weekly Aeroméxico Connect flights since becoming a hub. The mayor called the new jobs and economic activity "a godsend" for Colima.

Flying South of the Border: Mexico's New State-Owned Airline Takes Flight - Providing Competition in the Skies

Aeroméxico Connect's entrance into the market is providing much-needed competition in Mexico's domestic skies. For years, the duopoly of Aeroméxico and Volaris faced little challenge to their dominance. Together, they controlled over 80% of domestic air travel. With few incentives to compete, the major carriers prioritized profitability over customer experience. This manifested in high fares, crowded planes, inflexible policies, and lackluster service.

However, Aeroméxico Connect is changing the landscape by giving flyers a meaningful alternative. As accountant Rodrigo S. explained, "Healthy competition keeps powerful companies in check. Aeroméxico Connect is fixing problems that festered when customers had nowhere else to turn." He described crowded Volaris flights where passengers scrambled for overhead bin space. But with Aeroméxico Connect, Rodrigo now enjoys a peaceful journey in a half-empty cabin.

Marisol V., the Mérida fashion entrepreneur, faced similar crowding and hostility from dominant carrier staff before. But she praises Aeroméxico Connect flight attendants for being "eagerly helpful, not hardened and petty." Marisol believes existing airlines will have no choice but to improve as competition intensifies.

Competition from Aeroméxico Connect has already forced incumbents to respond. Volaris and Aeroméxico have lowered fares, added capacity, and improved services on select routes now contested by the upstart. Volaris announced a Customer Happiness initiative promising staff retraining and friendlier policies. While likely more marketing than substance, it shows Volaris recognizes the need appeasing customers they once took for granted.
Guillermo Rocha, aviation professor at Instituto Politécnico Nacional, told me competition makes the whole industry better. He explained, "Dominant firms get complacent without challengers. Just look at 1940s USA, when regulation allowed terrible service." Rocha believes Volaris and Aeroméxico will now pay more attention to quality, schedules, and fares - or lose business to Aeroméxico Connect.
While the major carriers publicly downplay the competitive threat, their actions reveal concern. Aeroméxico launched a price war on Mexico City-Oaxaca after Aeroméxico Connect announced service. Volaris added flights on contested routes and tweaked departure times to match the newcomer. These moves exemplify how Aeroméxico Connect's presence is benefiting consumers. Incumbents feel real pressure to retain customers.