Mexico City is a market that on the surface you’d think airlines would do well in. Mexico City has a massive population, it’s becoming an increasingly popular tourist destination, and it has a fair amount of business demand.
Unfortunately for some US airlines, Mexico City seems to be a huge money-loser. For example:
- Alaska Airlines pulled out of Mexico City as of November 2018
- Southwest Airlines pulled out of Mexico City as of March 2019
Now a third airline is following their lead.
JetBlue Ending Flights To Mexico City
JetBlue will be discontinuing all flights to Mexico City as of January 9, 2020. The airline currently operates daily flights to Mexico City with A320s out of Boston, Fort Lauderdale, New York JFK, and Orlando.
JetBlue started flying to Mexico City in 2015, though initially the airline had very unfavorable slots. Then in 2017 the airline got better slots because of the joint venture between Aeromexico and Delta, where the airline had to give up some favorable slots.
As far as these four markets go:
- JetBlue is the only airline to fly from Boston to Mexico City
- JetBlue is the only airline to fly from Fort Lauderdale to Mexico City
- Between Orlando and Mexico City, JetBlue competes with Aeromexico, Interjet, and Volaris
- Between New York and Mexico City, JetBlue competes with Aeromexico, Delta, Interjet, and VivaAerobus
Why Couldn’t JetBlue Make Mexico City Work?
So, why couldn’t JetBlue make this route work, in spite of them having markets like Boston to Mexico City to themselves?
First of all, nowadays the US to Mexico market is fiercely competitive:
- Aeromexico and Delta have a strong joint venture
- There has been huge growth among Mexican low cost carriers
Aeromexico and Delta have a strong joint venture
Beyond that, one of the biggest issues seems to come down to a majority of the demand for travel between the US and Mexico City being on the Mexico side. Consumers in Mexico City are much more likely to choose a “local” airline, not just due to preference, but also due to their sales methods.
For example, Aeromexico has quite a few traditional travel agencies in Mexico City where you can book tickets, while JetBlue doesn’t.
Lastly, perhaps the other issue here is that much of the lucrative demand from the US to Mexico City is business travel, and JetBlue has flown these routes without Mint-configured planes. Without a business class cabin they probably missed out on a lot of premium demand.
JetBlue never flew Mint-configured planes to Mexico City
Then again, from JetBlue’s perspective I’m sure there are more lucrative places they could have deployed those planes.
Bottom Line
We’ve now seen Alaska, Southwest, and JetBlue, end operations to Mexico City. It’s interesting to see how these airlines aren’t able to make Mexico City work, especially when you consider that JetBlue had two markets all to themselves.
It seems that the demand simply isn’t there on the US-side, and I suspect the strength of the Aeromexico and Delta joint venture, as well as the growth of low cost carriers in Mexico, most definitely didn’t help.
What do you make of JetBlue pulling out of Mexico City?
None of the reasons you mentioned had anything to do with JetBlue leaving. It was PURELY an integrity issue. JetBlue being new to Mexico at the time outside of Cancun didnt partake in the bribery required to get hold onto slots. MEX was a huge money maker. Why do you think they pulled all flights just like that !?
Does anyone know when Jet Blue stopped all flights from Orlando to Cancun? I am having trouble in getting a refund for a flight that was scheduled for 4/27/2020, and they will only issue a Jet Blue Credit Card. Any thoughts?
It's all moot now. Aviation will crater everywhere.
Oh, and toss in the lower labor costs for Mexico’s LCCs, who then can leverage the impact of that absolutely ridiculous $147 of taxes and fees, and well, is it any wonder Alaska, Southwest and JetBlue are unable to make Mexico City work for them?
Yeah, I didn’t think so.
Yes, there’s market specific dynamics including distribution models (for example, earlier this month I saw that United still has a city ticket office in Mexico City when I was there) that must be considered as reasons why USA-based airlines such Alaska, Southwest, JetBlue (or others) have all failed in their attempts to make a go of their Mexico City routes.
Not to mention the $147 (or so) in taxes, security screening and customs/inspection fees for...
Yes, there’s market specific dynamics including distribution models (for example, earlier this month I saw that United still has a city ticket office in Mexico City when I was there) that must be considered as reasons why USA-based airlines such Alaska, Southwest, JetBlue (or others) have all failed in their attempts to make a go of their Mexico City routes.
Not to mention the $147 (or so) in taxes, security screening and customs/inspection fees for USA-Mexico City roundtrip itineraries, regardless of fare class that one must pay.
But, yet again, one cannot overlook the folly that are these competition killing, anti-trust immunized joint-venture price fixing, capacity/inventory controlling/fixing, “alliances”.
Examples abound around the world, be they in Seoul, where Asiana has been in a deep financial crisis (and is at risk of failure if that government’s efforts to prop up that ailing carrier until finding investors willing to recapitalize it don’t work out) after implementation of rival Korean Airlines’ J-V with Delta within the past 2-years.
Or how about London’s Heathrow Airport, where just TWO anti-trust immunized joint venture entities, BA/AA + Delta/Virgin Atlantic have an absolute, impenetrable lock on the world’s sole $1billion, and incredibly lucrative route to/from NYC’s JFK Airport (with United becoming an high-end “boutique” airline between LHR & EWR, knowing that as long as it doesn’t step on the duopoly’s toes that its fellow members of the airline industry’s 3-way cartel over at JFK, it along with token (and faux) “competition” from BA’s 2 frequencies that aren’t even operated with larger capacity Boeing 747s anymore, but rather 787s or maybe 777s?
Or Tokyo, where now just two anti-trust immunized, price fixing, capacity controlling, joint venture alliances led by United/ANA + American/JAL replaced the robust competition of FOUR (or more) airlines that used to operate between the USA and Tokyo.
Heck, the degree to which these price fixing (more like price gouging) anti-trust immunized “alliances” is so great that even an airline as big as Delta, which inherited the massive hub Northwest had in Tokyo for decades, has thrown in the towel and soon will operate just a handful of flights per day with Tokyo reduced to no more than a spoke that can’t even support nonstops to one of Delta’s biggest cities, NYC.
Maybe someday the utter folly and preposterousness of ever thinking that allowing former competitors to come together and offering them an opportunity to conspire on setting fares, capacity & schedules would somehow defy the laws of capitalism and be beneficial to consumers.
But until then, I guess there’s enough idiots out there that still believe offering companies in any industry an opportunity to lawfully engage in price fixing and to collude on capacity/inventory and scheduling is a “good thing” - when something like that never has been, and never will be, a “good thing” for anyone but the oligopolists, duopolists and monopolists who belong to the industry’s cartel club.
“Oligopolies are GREAT!” - said by no one except oligopolists and oligarchs.
And here again, with JetBlue’s exit from Mexico City where it faces behemoths based on both sides of the border who can collude on pricing, capacity and schedules - and not unexpectedly, couldn’t defy the odds and succeed against such overwhelming market controlling powerhouses.
I mean, who could?
Now three “big name” airlines, including the USA’s biggest domestic carrier, Southwest, have proven that.
shame that you don't mention United Airlines, flies directly to Nyc as well
Well allegedly Southwest plans to return in 2021 once the system can take foreign currency. United is raping customers with its incredible expensive tickets. Outrageous!!
@R.
United may have pulled out of LAX-MEX, but still operates several flights daily from SFO 2x, IAH 6x, ORD 2x, EWR 2x, IAD 1x and seasonal flights from DEN.
UA also competes out of the NYC market (ex-EWR of course).
I wish AA would fly JFK-MEX - a huge hole in the OneWorld map IMHO. But AA is clearly scaling back in MEX, dropping ORD a couple of years ago and reducing LAX to 1X daily this year, on a tiny A319 no less.
I fly this route often. In fact, I’m flying BOS-MEX on JetBlue in six hours. My travel to MEX varies — either from BOS or JFK. Sometimes I fly Delta, sometimes JetBlue, based on my schedule.
I really think JetBlue missed out on a huge opportunity to sell out a
premium cabin on these routes.
I’m JetBlue Mosaic and Delta Gold.
Whenever I fly MEX-JFK or MEX-JFK-BOS on Delta (Delta marketed/Aeromexico operated),...
I fly this route often. In fact, I’m flying BOS-MEX on JetBlue in six hours. My travel to MEX varies — either from BOS or JFK. Sometimes I fly Delta, sometimes JetBlue, based on my schedule.
I really think JetBlue missed out on a huge opportunity to sell out a
premium cabin on these routes.
I’m JetBlue Mosaic and Delta Gold.
Whenever I fly MEX-JFK or MEX-JFK-BOS on Delta (Delta marketed/Aeromexico operated), I try to fly AM’s 787-9 service. Better legroom, comfort, etc.
This flight nearly always sells out in business. As in before the 7-day window for platinum elites. I’ll usually buy up (approx $300 o/w) when I have the chance because I know there is no way I will clear the upgrade list.
I wish JetBlue had serviced this route with Mint. I’ve lamented that for a while now.
The AM 7am MEX departure on the 787-9 really stinks because you have to allow a lot of time to get to the airport in CDMX.
JetBlue could offer flatbed service at a much better hour of the day in both directions.
They could probably sell out an even denser Mint configuration. There seems to be enough business demand on this route.
Disappointing. And a missed opportunity.
Mexican tourists rarely fly Aeromexico since their fares are much higher than Interjet, Volaris, and Vivaaerobus. Aeromexico is used much more by business travelers. Mexican credit cards often allow payment of their fares over several months with no interest which is another huge benefit and a downside to flying a US carrier.
A large population doesn’t equal more passengers.
Besides, thanks to the Trumpaloompa administration, getting a Visa or just going through customs is an ordeal.
@Brian
Hot and High will always be a constrain even with newer planes. They stop making hot and high planes over 30 years maybe, because the 737 320 can perform the flights. Yet hot and high still plays a role in weight and revenues.
Same reason PHX (against popular request) will unlikely get much love for international destinations, there are more economical routing for AA.
I also hate to break it, but LAX is as...
@Brian
Hot and High will always be a constrain even with newer planes. They stop making hot and high planes over 30 years maybe, because the 737 320 can perform the flights. Yet hot and high still plays a role in weight and revenues.
Same reason PHX (against popular request) will unlikely get much love for international destinations, there are more economical routing for AA.
I also hate to break it, but LAX is as favorable as, if not more, than MEX from Asia.
@Anthony
It's more complicated than a simple "true single market for North American aviation. This would mean Interjet could fly between New York and LA". You don't need InterJet to break the market, even Spirit or Southwest can't drive prices down like Ryanair or EasyJet.
Remember the time when there was a lot of competition in USA?
Eastern, PanAm, TWA, Northwest, Continental, US Air, American, Delta, United.
Only 3 is still flying.
I only use Delta and Aeromexico between the U.S. and Mexico, around six times a year. Once I flew American airlines to Mexico city, only because they were the operating airline on my Qatar Airways flight. I never fly to Cancun or any other beach town. Love Mexico City.
Almost a year ago United and Alaska Airlines stopped flying into Mexico City. Southwest will end service in March 2020. I believe the problem is over saturation of the market with high fuel costs, political instability, perception of safety, and competition from low cost no frills carriers such as Viva Aerobus and Volaris. Add to the challenge is that the Benito Juarez International Airport is extremely old, outdated, and overcapacity. Plus it is extremely expensive...
Almost a year ago United and Alaska Airlines stopped flying into Mexico City. Southwest will end service in March 2020. I believe the problem is over saturation of the market with high fuel costs, political instability, perception of safety, and competition from low cost no frills carriers such as Viva Aerobus and Volaris. Add to the challenge is that the Benito Juarez International Airport is extremely old, outdated, and overcapacity. Plus it is extremely expensive for Mexican citizens to travel to the US due to the US/Peso exchange rate. The article also mentions that Aeromexico has physical offices throughout Mexico City which is true but they operate on an outdated business model and something that can't be sustained. American Airlines also operates a ticket office in Mexico City but it baffles me as to why. I don't believe that we have had an airline office in the US since the late 1980's. The article also mentions the lack of business class seats on Jet Blue. I fly American quite often to Mexico City and notice that they scaled back their business class seats to just 8 seats on their A320. It used to be 16 but if nobody is buying those seats, then from the perspective of the airline it's not worth it if the only people who will fill those seats are passengers who are upgraded via their elite status with the airline. What I have noticed is that ticket prices over the past two years on the Mexico City route has risen about 50 - 80%. I used to be able to get a round trip ticket for $250 between Mexico City and Los Angeles, and that included the Mexican and US combined taxes of $160. These days I'll be lucky to get a ticket for less than $500. A lot of my friends who travel to the US from Mexico will fly to Tijuana and simply walk across the CBX bridge from the airport directly to the US side and save several hundred dollars in the process.
MEX is badly runway constrained and gate constrained. It has two parallel runways but they cannot reliably be operated simultaneously and the surrounding mountains require circuitous flight routes over densely populated areas. Most weather conditions require very rapid and steep turbulent descents and ascents and noise pollution is a problem creating local opposition and limiting 24-hour operations.
The city's population has dectupled (10x) since the last runway upgrade. Since the airport was built in the...
MEX is badly runway constrained and gate constrained. It has two parallel runways but they cannot reliably be operated simultaneously and the surrounding mountains require circuitous flight routes over densely populated areas. Most weather conditions require very rapid and steep turbulent descents and ascents and noise pollution is a problem creating local opposition and limiting 24-hour operations.
The city's population has dectupled (10x) since the last runway upgrade. Since the airport was built in the outer suburbs in the 1920s, the city has enveloped and surrounded it. Two runways were closed in the 1960s for housing development and now the residents whine about noise constantly. Runway expansion is impossible; the last passenger and gate expansion (2007) made the flying experience much worse as it jammed more people into shrinking gate areas and customs halls and narrow rat warren mazes underground while services suffered and transit access worsened.
So any carrier with good slots has a stranglehold on passengers. Prices have skyrocketed and flights are usually at capacity.
Of course, that also makes it impossible for anyone to take advantage of Mexico's central location for a massive Mexico-Central America-South America-Asia hub. Just local connections into Mexico would be excellent, but MEX is ideally located to fly A350 and 787 jets into all of Asia and convenient to all of Latin America for connecting traffic. Weight constraints for high and hot airports made it unprofitable to fly 777s directly to Asia but now it's easy because the distance was right on the edge of viability. (Only AM's Tokyo experiment came close on 777s and had to charge $600 per Y pax premium on every ticket over UA, AC, DL, and AA's connections.) But not even local connections are possible with the airport we have now—Guadalajara handles that market.
The previous president moved on getting a new airport built, not far from the present one. It had to be put up on stilts on caissons sunk into Lake Texcoco and hung like a tent. Even the runways would hang over the lake bed. Of course the lake is dry most of the year, but the airport and all its land approaches have to be high enough to operate when the lake fills in late monsoon season of wet years (September-ish). Season flooding is why there was open land there in the first place.
So it wasn't going to be cheap. But it was halfway done. And new president AMLO, the Trump of Mexico, had always opposed the project and personally wanted to deconstruct and erase his hated predecessor. So he cancelled the airport. Don't expect any relief from the crowding.
That's a bad news. It was a very convenient flight from Boston to Mx City. I really like their service and attitude. It's extremely bad to cancel this flight. First was Aeromexico and now JetBlue. United Airlines it's a horrible airline that offers the worst service. Always has delighted flights, cancellations and their service and attitude are the worst. PLEASE JETBLUE RETHINK YOUR DECISION!!!
I wonder whether Delta will take up the route as part of their joint venture. They are trying to build up their hub at Boston, and they will
be able to connect with Aeromexico at MEX to domestic destinations (even those which might not have direct flights to the United States). I imagine this would make lots of sense — especially with a monopoly. They really are the perfect airline for this route— Jet...
I wonder whether Delta will take up the route as part of their joint venture. They are trying to build up their hub at Boston, and they will
be able to connect with Aeromexico at MEX to domestic destinations (even those which might not have direct flights to the United States). I imagine this would make lots of sense — especially with a monopoly. They really are the perfect airline for this route— Jet Blue just didn’t have the connectivity at MEX that might have made this work with the US market (and they had the PoS issue in Mexico).
@anthony absolutely no. That would loeterally be giving away American jobs for Mexican jobs. That would implied mexican carriers having Mexican pilot's and fa's flying us domestically with Mexican salaries and providing lowers fares that us carriers can't.
You live in the US... You pay US prices.
@Matthew,
Exactly. Maybe the points-and-miles crowd doesn't care, but for people paying mostly with cash -- even with CSR 1.5 points -- high airfares for North America are outrageous. In Europe, there aren't just cheap flights within Europe, but affordable flights to Russia, North Africa, and the Middle East.
From a tourism perspective, this is really annoying, because anywhere in Mexico -- from food to accommodation to walkable beautiful cities -- is better value and...
@Matthew,
Exactly. Maybe the points-and-miles crowd doesn't care, but for people paying mostly with cash -- even with CSR 1.5 points -- high airfares for North America are outrageous. In Europe, there aren't just cheap flights within Europe, but affordable flights to Russia, North Africa, and the Middle East.
From a tourism perspective, this is really annoying, because anywhere in Mexico -- from food to accommodation to walkable beautiful cities -- is better value and quality tourism than most places in the United States. And the same is really true of Canada -- better value than the United States. But, sadly, our terribly anti-competitive airfare marketplace -- and the lack of trains -- makes North American travel more expensive than flying to Europe, in many cases.
Mexico City is one of the world's great cities.
I don't understand why flights to MEX cost so much more than similar-length flights within the US, at least from ORD. The obvious answer would be taxes but that's not it. From ORD there is not much choice. AA pulled out of ORD-MEX years ago. Who wants to change in DFW, ATL etc for a 4-hour flight?
B6 likely had little to no POS in Mexico. And as the article points out, US-MEX is fiercely competitive. B6 brings nothing to the market that isn't already there.
@Anthony
Amen. I just paid the same amount for an MSP-MEX ticket that I paid to go to Amsterdam (both direct on Delta). That shouldn't be possible if there were sufficient competition.
What should really happen is that we develop a true single market for North American aviation. This would mean Interjet could fly between New York and LA, Air Canada could fly between Seattle and Atlanta, and Delta could fly between Mexico City and Monterrey.
With a North American single market for aviation, prices would plummet to affordable European levels.
It shouldn't be so grotesquely expensive to fly across a single continent, say, from Atlanta...
What should really happen is that we develop a true single market for North American aviation. This would mean Interjet could fly between New York and LA, Air Canada could fly between Seattle and Atlanta, and Delta could fly between Mexico City and Monterrey.
With a North American single market for aviation, prices would plummet to affordable European levels.
It shouldn't be so grotesquely expensive to fly across a single continent, say, from Atlanta to Montreal, or from Mexico City to Minneapolis, or from Vancouver to Tijuana.
1. Mexicans still use travel agents.
2. Mexicans go to Spanish speaking places for leisure.
3. Mexico City has no beach. (don't laugh and ask around what do Americans think for vacation in Mexico)
4. Americans goes to other places in Mexico due to reason 3 and can bypass MEX completely.
5. There is not enough business demand outside of CA, TX, FL not even NY NM or PR. Hence, WN...
1. Mexicans still use travel agents.
2. Mexicans go to Spanish speaking places for leisure.
3. Mexico City has no beach. (don't laugh and ask around what do Americans think for vacation in Mexico)
4. Americans goes to other places in Mexico due to reason 3 and can bypass MEX completely.
5. There is not enough business demand outside of CA, TX, FL not even NY NM or PR. Hence, WN doesn't attract business travelers and B6 have few business travelers.
@Anthony
I think AA and UA are also competing hevily in MEX not just DL.
"Mexico City is easily (ONE OF) the most interesting and exciting big city in the Western Hemisphere."
While I do agree to that statement, unfortunately most people overlook Mexico City and head to the all inclusive beach resorts. Same can be said of LA and people head only to the theme parks.
@dt
DL flys JFK-PVR non-stop seasonally
@FERNANDO BARRAGAN
Spirit will not be flying to Mexico City again any time soon. MCO-MEX is probably the worst route for a US carrier to attempt as 90+% of the traffic is Mexican point-of-sale.
American and United also fly to Mexico City.
I do see Spirit jumping on the MCO-MEX route very soon. Their LLC model could compete unlike Jet Blue with Volaris and Interjet on this route.
Mexico City is easily the most interesting and exciting big city in the Western Hemisphere. A pity that selfish, anti-competitive, and ruthless Delta is destroying a competitive marketplace for flights to the city -- remember that Southwest pulled out of Mexico City last year.
Delta needs to be held accountable for its grotesque anti-competitive behavior. Enough is enough.
... things would it be much better flying from LAX, Las Vegas or even Long Beach where Jetblue has a strong presence.
One would think they’d serve a different destination in Mexico, such as JFK-PVR (for which there is no competition).
It is a shame, I flew 1 year ago MEX-FLL-MEX and I loved JetBlue. Great service and great planes.
>JetBlue will be discontinuing all flights to Mexico City as of January 9, 2020.
Who in their right mind would fly internationally on an airline managed by Ben Baldanza?
I think majority of American tourists go to Cancun and other beach destinations in Mexico...for those types of vacations (beach) changing airports and taking connecting flights are not ideal steps...so Mexico City was never a convenient place for that contingent...for me - no surprise here at all
Does anyone else suspect Trump was behind the decision to pull out of this market? It could be considered a hate crime.
The travel agency argument is creative but I am not sure it holds much water. Aeromexico operated BOS-MEX for a year before bowing out and they are obviously bookable through Mexican travel agencies.
From the Mexican perspective this route is highly seasonal, with lots of demand driven by Mexican students attending New England schools and colleges.
From the US perspective Americans do not look at MEX as a hub to other Mexican destinations...
The travel agency argument is creative but I am not sure it holds much water. Aeromexico operated BOS-MEX for a year before bowing out and they are obviously bookable through Mexican travel agencies.
From the Mexican perspective this route is highly seasonal, with lots of demand driven by Mexican students attending New England schools and colleges.
From the US perspective Americans do not look at MEX as a hub to other Mexican destinations and I can’t say I blame them as navigating the airport is not fun. Also, Jet Blue did not have an alliance with any Mexican airline so this flight did not have feeder potential.
Hopefully Delta will take this route on as part of their growth in Boston.
That's the difference between me and JetBlue. I never pull out.