Luis Alvarado, Director General of Aerounion by MBP

Growing trade volumes need cargo airlines that ensure a swift transportation. Be it e-commerce, the transportation of perishable goods or ensuring JIT logistics for manufacturing chains, Mexico’s air cargo segment is soaring.

Mexican airlines continue to experience solid growth in cargo traffic. In the first 10 months of 2018, the airborne cargo traffic of national carriers increased 14.9 percent. These airlines transported an aggregate 331,323 tons compared to the 288,323 tons handled between January and October 2017, according to DGAC data. The international cargo segment has been the most dynamic for Mexican airlines with a 21 percent greater traffic. They transported 193,299 tons across Mexico’s borders compared to only 159,807 tons in the same period of the previous year. In terms of domestic flights, national players only transported 7.4 percent more airborne cargo for a total of 138,024 tons during the first 10 months of 2018.

Only topped by the three member-airlines of Grupo Aeroméxico together, cargo airline Aerounion was the runner-up in this aviation segment during this period. Not only did it account for 11.5 percent of all cargo transported by air in Mexico (26.9 percent of all cargo handled by national carriers). It also reached the highest dynamism of the segment with a growth variation of 49.7 percent (86,456 tons of cargo in both national and international flights on top of 57,758 tons in the same period of 2017).

Aerounion moved more cargo across Mexican borders than in domestic flights. While the company shipped 75,390 tons between January and October 2018 (a 40.2 percent growth on 2017’s figures), its internationally-transported cargo experienced a higher growth with a 176.8 percent increased traffic (11,065 tons).

In this edition of the Interview of the Week, MAAR showcases an excerpt from its exclusive interview with Luis Alvarado, Director General of Aerounion, that was first published in Mexico Aviation & Aerospace Review 2018. Find out more about the strategy of Alvarado to increase Aerounion’s operations.

Q: What are AeroUnion’s priorities in terms of investment in its new sustainable growth plan?

A: AeroUnion’s potential has been proven these past few months. We have increased our operations and have become more profitable. However, we have seen that there are some areas we need to strengthen, or in some cases develop, for our strategy to be sustainable in 2018. The company had a good balance before the growth strategy kicked in. Now that we have seen its potential, we must regain or redefine our new operational balance to ensure sustainability.

The pillars for sustainable growth include areas like safety, security, quality, technology and people. I would like to have a special focus on technology. In the past, AeroUnion overcame a lack of technology by providing specially personalized services to our customers. As we grow, we need to find ways in which technology can help us to do more with the same, without losing our special touch with customers.

Q: How will the NAFTA renegotiation impact your Mexico-US operations?

A: NAFTA is without a doubt one of the most important free-trade agreements in the world. An update is certainly in order but the conditions are tricky. The US president has openly stated that the agreement has not been favorable to the US and a negative outcome could have implications on our operations, albeit not significant. We are still confident that negotiations will lead to a better trade relationship. Furthermore, thanks to the uncertainty created by President’s Trump remarks, many customers are now looking to diversify their business into nontraditional destinations in Asia and other regions. Once a NAFTA compromise is reached, we expect customers to grow their operations between Mexico and the US while maintaining a strong focus on other regions.

Q: How is AeroUnion targeting the expanding opportunities in the Asian market?

A: AeroUnion offers an excellent connection point with Asian airlines through Los Angeles and Chicago, and we have inter-airline relationships with many players and general sales agents in several countries. For the moment, our strategy will be oriented toward being a strong connection point for Asian airlines that want to target the Mexican market from the US. We will not fly to Asia directly but we want to offer a very competitive product to Asia via Los Angeles with our inter-airline partners.

Luis Alvarado has confirmed his attendance to Mexico Aerospace Forum 2018. To learn more about his insight on Mexico’s cargo aviation and the advantages that air connectivity can bring for the country’s economic dynamism, do not miss Mexico Aerospace Forum on December 5th, 2018 at Sheraton María Isabel in Mexico City. Register here to get your tickets!

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