Q: How big a factor is Mexico in United Airlines’ long-term sales strategy?
A: Mexico is United Airlines’ second-biggest market in terms of operations outside the US. We operate flights to 64 destinations in Latin America and the Caribbean with an average of 1,000 flights a week. Of these, 550 are to Mexico. Mexico City is the only destination connected with all seven hubs in the US: Houston, Denver, San Francisco, Los Angeles, Chicago, Newark and New York. United Airlines continuously analyzes its routes to determine when to increase capacity. When we notice growth in demand in a market, we either schedule more flights for this destination or use a larger aircraft. For instance, five years ago we started flying seven times a day from Monterrey to Houston. As demand grew we added five more flights for a total of 12 daily flights in this route and one in the Monterrey-Chicago route. Shortly after, we started to operate 14 weekly flights. United flew 70-seat CRJ-700 airplanes in this market but as demand grew, we replaced these aircraft with the 76-seat Embraer E-175. This measure meant an increase of almost 10 percent in the number of available seats per flight.
Q: What are the most important routes for United in Mexico?
A: Cancun is our busiest airport outside the US. During peak season, we operate up to 40 daily flights. In Mexico City, we have up to 16 flights a day and all our operations are mainline flights. In Queretaro, we fly three daily flights using 76-seat ERJ175 aircraft and in Leon we grew from a daily flight to Los Angeles and four to Houston to four flights to Houston and two to Los Angeles. Last year, United added a new flight to the Aguascalientes-Houston and San Luis Potosi-Houston routes. This was done largely to further connect the automotive industry as air traffic between Europe, Asia and the US related to this sector has grown. United Airlines used to partially operate its mainline flights using Airbus A319s, Boeing 737s and other large aircraft while operating a few flights using 76-seater regional jets. Now, all United Airlines’ flights are mainline and jets are used in other destinations.
Q: What are your growth expectations for flights between the US and Mexico in the long term?
A: The entire Latin American market continues to grow, not just Mexico. Of the 20 most important cities in Latin America, only 43 percent have a direct flight services, while 100 percent of the important European cities have these kinds of connections. The aviation industry in Latin America will grow more than in the rest of the world. The average growth of this industry in Latin America is 4.6 percent, while growth in the Mexican market is expected to be 4.7 percent. The agreement between the American and Mexican governments provides more options for flight destinations. Before this agreement existed, only two foreign airlines were allowed to fly to the same destination. Lifting this limitation will boost competition and provide customers with a greater number of options to choose from.
Q: What are United Airlines’ most important alliances and what does it look for in a partner?
A: United Airlines is a founding member of Star Alliance. But the company also has separate agreements with various airlines. We have a codeshare and frequent-flyer agreement with Aeromar that helps us take passengers to some destinations where we do not fly. Before this partnership, United Airlines had an average of 40 codeshare flights to 16 cities operated by Aeromar. Now, we have increased it to 74 codeshare flights to 20 cities. Partnering with these kinds of companies increases the number of destinations offered and the frequency of operations and makes air tariffs more competitive. Among Latin American companies, we also have codeshare and frequent-flyer program agreements with both Copa Airlines and Avianca.
We have joint ventures with Lufthansa and Air Canada. Passengers flying on any United Airlines, Air Canada or Lufthansa flight departing from any country from Canada to Panama and going to Europe, the Middle East, Africa or India can interchange flights between these three airlines at the same tariff, connect between each lines’ flights and have their luggage dispatched to their final destination. This means a passenger flying from Mexico to Europe will find a better price connecting between these companies’ flights. United Airlines also has a joint venture with Japan’s ANA for all flights over the Pacific to Asia. This provides passengers with more options and destinations when choosing a flight.
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