Airlines Plot Courses to Mexico

U.S. carriers are adding flights, hoping to cash in on an increase in travel between the countries.


Although service to Mexico may not be as lucrative as flying to Paris or Tokyo -- where average ticket revenue can run 25% higher than on domestic routes -- it still can be more profitable than flying between U.S. cities, said Stuart Klaskin of KKC Aviation Consulting. That's partly because Mexico is closer, so it's cheaper to serve than Europe and Asia, especially in an era of sky-high jet fuel prices.

"Mexico is unique in that you can get close to international revenue without having to fly great distances," Klaskin said.

That's part of the reason Delta is placing so much emphasis on adding flights to Latin America and the Caribbean as it retools its route system.

Delta had already secured preliminary or final approval to start service on several new routes to Mexico this year. Much of that service is from its Atlanta hub, but the carrier has added flights from Boston, New York, Salt Lake City and Washington, as well as flights from LAX to Ixtapa and Cancun.

On June 21, it received preliminary approval to launch service from LAX to Puerto Vallarta, and it is seeking U.S. Department of Transportation approval to fly from LAX to eight other Mexican destinations, including La Paz, Loreto and Los Mochis, a jumping-off point for tours of the Copper Canyon area.

Delta planners say the development of top-notch resorts in Baja such as Cabo San Lucas and the increasing popularity of diving and sportfishing sites such as La Paz and Loreto are kicking up demand for air service to the region.

"People want to try these new places," said Bob Cortelyou, Delta's vice president of network planning. "Twenty years ago, Cabo was off the radar."

Other U.S. carriers also see the potential, as do Mexican carriers. Alaska recently won approval to launch Mexico service from Seattle and Portland, Ore., and is seeking permission to fly from LAX to La Paz and from San Francisco to Cancun.

Alaska has seen its traffic between the West Coast and Mexico grow 62% since 1998 as travel by tourists, businesspeople and U.S. residents visiting friends and family in Mexico have grown, said John MacLeod, the airline's managing director of planning and alliances.

UAL Corp.'s United Airlines also was awarded new routes to Mexico recently -- including a daily nonstop to Cancun. Frontier, a unit of Frontier Airlines Holdings Inc., and JetBlue Airways Corp.'s airline each snagged a route coveted by Delta, and Frontier is also seeking authority to fly nonstop between San Diego and Cancun.

Meanwhile, Mexicana de Aviacion and Aeromexico, which rank first and third respectively in terms of LAX-Mexico traffic, also have been adding service between the U.S. and Mexico, with Aeromexico adding flights from both LAX and Ontario International Airport and Mexicana launching service to Fresno.

Add to the mix the discount carriers just starting up in Mexico -- which may add U.S. routes eventually -- and the market could get very crowded, very quickly. Travelers should see some cheaper fares, especially with low-fare specialists such as Frontier and JetBlue getting in the game, but rising demand is likely to keep fare wars to a minimum, consultant Klaskin said.



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