Sponsored Listings:
This winter will see a significant increase in the number of flights between the U.S. and Mexico in the aftermath of the liberal air agreement that went into effect between the North American neighbors in August.
By Aug. 30, airlines had scheduled and put on sale a net increase of 32 services for this coming November through March compared with 2015, according to the aviation data analytics company OAG. A service is defined as a specific city pair flown by a specific carrier.
By comparison, OAG data showed an increase of a dozen U.S.-Mexico services in the winter of 2015 compared with a year earlier.
“It’s quite interesting that there have been a number of city pairs added year on year,” OAG senior analyst John Grant said. “There has to be a relationship to the new agreement between the countries.”
Under the agreement, there are no limits on the number of carriers that can serve any city pair. The previous U.S.-Mexico arrangement limited routes to three airlines from each country.
Among those that have recently added U.S.-Mexico routes are major U.S. carriers Southwest, American and Delta. Frontier is offering 10 U.S.-Mexico routes this winter compared with six last year, though by reducing frequencies it is actually lowering its total flight count. The Mexican low-cost carrier Interjet will increase its U.S.-Mexico routes by two, while Volaris, another Mexican low-cost carrier, has upped its city pair offerings between the two countries to 50 from 43.
To be sure, not all of these routes needed the air agreement to happen. For example, American’s recent decision to begin flying from Miami to the Yucatan city of Merida in November would have been possible under the previous rules since no other U.S. carrier serves that route.
But other recently announced airline services would not have met regulatory muster under the previous U.S.-Mexico aviation deal.
For example, American and Southwest will begin service this winter between Los Angeles LAX and Cancun, a route that is already flown by the previously allowed maximum of three U.S. airlines (United, Delta and Virgin America). Interjet is also flying that route this winter.
Delta and Southwest will begin service between LAX and Los Cabos in December, competing with American, Alaska and United.
Los Angeles, with its large Mexican-American population, appears to be a big winner in the aviation agreement.
Airlines are offering a net increase of seven LAX-Mexico services this winter, 15% more than previously.
Aviation industry analyst Bob Mann of R.W. Mann & Co. said that the extra competition means there will likely be good fares on U.S.-Mexico flights in the coming months. Open for conjecture is how many of the new offerings will continue in the long run and how many will be canceled due to oversupply.
“I think there will be some tactical low fares there,” Mann said. “They may turn into systemic low fares, at which point some of that capacity may go away.”
Grant said that inevitably airlines will reevaluate their U.S.-Mexico offerings ahead of next summer and before the winter of 2017-18.
“Some of [the services] are undoubtedly a result of airlines attempting to take market share from existing airlines,” Grant said. “But some are also using data and have identified city pairs where people have had to fly indirectly.”
Source: travelweekly.com
