Wednesday, April 24, 2024

What can Mexico’s airline industry tell us about the country’s future?

Flying these days is rarely described as a fun activity.  As I have had to do a fair amount of it within Mexico lately, I have tried to entertain myself by doing some observational research in airports. As a marketer at heart, I love doing research – reading extensively from lots of sources and then applying what I have read to what I observe in the real world.

I’ve been using my marketing research brain recently to think about Mexico’s airline industry. I analyze it here through three different lenses: airports, domestic routes and international routes.

The amount of development and construction taking place now in Mexico’s airport sector is nothing short of mind-boggling. We all know about the new airport in Mexico City, Felipe Ángeles International Airport (AIFA), with a capacity for 20 million passengers annually (and potentially up to 80 million if planned expansions are completed). Despite the controversy surrounding the project, it continues to attract airlines and passengers.

The second and third largest cities in the country, Guadalajara and Monterrey, are currently expanding their airports with massive multi-year projects increasing capacity to 40 million and 16.5 million passengers respectively per year. It’s not just in the very largest cities: Querétaro has recently announced continued expansion plans, Puerto Vallarta has a significant expansion underway to increase capacity to nearly 12 million passengers per year, Cabo San Lucas airport is adding nine new gates, and Cancún’s airport seems to never stop expanding.

The new Felipe Carrillo International Airport in Tulum is under construction and slated to begin operations early next year. Even with all of these expansions, the airports are more packed with travelers than ever.

The amount of domestic routes being added is also an exciting development taking place.  Clearly, the airlines are seeing increased demand and purchasing power from their customers and responding with more flights.

New connections, new cities, additional flights are announced on an almost weekly basis.  The demand – from families going on beach vacations to business people traveling from one city to another – is undeniably on the rise. Last year, there were 115 new routes added nationally and from abroad to Mexico, and Volaris alone just announced 40 new flights last month.

I think an interesting observation of the two fastest-growing domestic airlines, Viva Aerobus and Volaris, is that neither one has a first class section. These airlines are not building their business models based on well-heeled business people, or the wealthy who prefer flying in first class, but rather with a focus on the rapidly growing Mexican middle class.

Along with the growth in domestic routes, the amount of international routes being added by both national and international airlines is a development to watch as well.

According to schedule data from Cirium, there are now a total of nearly 750 flights per day between the United States and Mexico. American Airlines, with a total of 170 flights to Mexico per day, just increased its total number of flights per day to 50 from Dallas alone to different cities in Mexico.

United Airlines has 143 flights a day to Mexico, and Volaris is in third position, with 88 flights a day. Delta is in fourth place, with 66 flights a day between the two countries. Both United and American have seven flights a day from their Texas hubs to Cancún, Delta has six per day from Atlanta to Cancún, and United has six per day from Houston to Mexico City – that is an incredible level of connectivity!

In countless flights I’ve taken between the United States and Mexico over the years, I remember feeling like most passengers (outside of the beach flights) fit into one of two categories: U.S. business people traveling to Mexico, or Mexicans coming to visit family in the U.S.

Today, the diversity of travelers is inspiring and exciting. Business people from around the globe are on Mexico-bound flights, Mexican business people are traveling out to do business, Mexican families flying to take holidays in the U.S. and beyond, foreign tourists are flying into Mexican cities on vacations, young Mexicans are on flights to the U.S. or abroad to study. The frequency of flights, the diversity of airlines, and new connections from both abroad and in Mexico are allowing passengers to explore internationally like never before.

I encourage you to get out and fly into and around Mexico to be inspired by a dynamic industry responding to a rapidly growing and evolving customer base. The construction noise, packed waiting areas, and loud kids in the airports might not make your journey the most relaxing one ever, but you can’t help by be excited by the sounds of an expanding and mobile middle class, and what it means for the future of the country.

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