Aeromexico is still weighing an order of Bombardier Inc.’s C Series planes, Conesa [CEO] said. (...) we’re analyzing whether to bring the C Series, the new E2 or staying as we are (...) We’re hoping to make a decision in the second half of the year.”
Aeromexico Scales Back 'Unsustainable' Flights, Following United
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By Andrea Navarro - May 16, 2018, 3:31 PM EDT
Grupo Aeromexico SAB, Mexico's largest airline, is trimming its expansion plans as a seating glut drags down fares.
Capacity will expand 7 percent the rest of this year, said Chief Executive Officer Andres Conesa. That's down from a previous forecast of about 9 percent, he said, citing the need for increased discipline as rising fuel prices add to earnings pressure.
The carrier is tapping the brakes as a weaker industry outlook has prompted investors to dump Mexican airline shares. Years of go-go growth have left the domestic market awash in capacity, while an open skies deal with the U.S. prompted airlines from both countries to add cross-border flights. United Continental Holdings Inc. said last week it would chop flights to Mexico, saying service to some markets was unsustainable.
"We're starting to see the impact on profit, but it has more to do with excess capacity than weak demand," Conesa said in an interview at Bloomberg's offices in Mexico City.
Aeromexico fell less than 1 percent to 24.10 pesos at 1:58 p.m. in Mexico City. The shares slid 15 percent this year through Tuesday. Its biggest domestic rival, Volaris, tumbled 28 percent this year while the benchmark IPC index fell 6.3 percent.
Aeromexico has been...