Southwest Airlines Pulls Out Of Mexico City

Mexico City is an incredibly interesting aviation market to me. Mexico City is the largest city in North America, yet some airlines can’t quite make it work.

Securing slots for Mexico City can be difficult. For example, in 2017 Alaska Airlines began flying to Mexico City from Los Angeles, San Diego, and San Francisco.

The airline started all routes between August and November of 2017, and then ended up canceling the routes between May and November of 2018. So the routes lasted at most a year, and at this point Alaska Airlines has completely pulled out of Mexico City.

Well, today there’s news that another US airline is pulling out of Mexico City altogether.

Southwest Airlines canceling Mexico City flights

Southwest Airlines has announced that they’ll stop flying to Mexico City as of March 30, 2019.

Southwest has been flying to Mexico City for over four years, and says that the route has been performing poorly. Southwest says that they plan to “reallocate these resources to better opportunities within our existing route network.”

Southwest Airlines currently operates twice daily flights between Houston and Mexico City. They’re one of the largest airlines in the US in terms of the number of passengers carried, Houston is one of their biggest hubs, and Mexico City is the biggest city in North America.

So, what went wrong?

Obviously they’re up against a lot of competition in the US to Mexico market in general. Delta owns a stake in Aeromexico, and they dominate the US to Mexico market.

American and United both also have a good presence in Mexico City, and on top of that Mexican carriers Volaris and Interjet have picked up a ton of traffic between the US and Mexico.

I suspect the biggest issue comes down to a majority of the demand for travel between the US and Mexico being on the Mexico side. Consumers in Mexico City are much more likely to choose a Mexican carrier.

Then Southwest has an even bigger disadvantage compared to other airlines, since they don’t sell tickets through online travel agencies. So people have to know to specifically search on Southwest’s website.

Some might think that even the demand from the US alone would be enough to sustain a route like this, given how big Southwest is… but I guess not.

Bottom line

I’m sure Southwest’s decision to pull out of Mexico City is the right one, and I’m sure they did everything they could. However, that doesn’t stop me from being surprised that Southwest Airlines can’t make any flights to Mexico City work.

I suspect this is one of the few international markets in which Southwest competes where a majority of the demand comes from the international side. With Southwest not selling tickets through online travel agencies, they were at a real disadvantage.

Are you surprised to see Southwest pull out of Mexico City altogether?

Comments

  1. I’m surprised as I think Mexico City is about to takeoff as a tourist destination. I just spent the weekend there with my wife and loved it!!! (Large consideration was how bullish lucky was on it and also Tiffany’s great posts). 2 years ago everyone I knew said don’t go, now they were all wanting to go themselves.

    Good availability with low fees on Aeroméxico through flying blue. Unless I got lucky

  2. FWIW, I’ve had decent luck finding UA (Economy) availability on SFO-MEX the past 3 years. Excusionist Perk bookings included too, bringing in partner carriers for outlying Mexico destinations. 35k miles for a twin-destination trip is not too bad…

  3. I second the idea that not offering bookings through OTAs and other sources is what killed this route. Southwest fares ex-Mexico City have generally been quite affordable, and the two free bags would have been a fantastic proposition for the Mexican VFR market. Given that at least United and Volaris don’t offer free checked bags on Mexico routes and many Mexicans travel with food and gifts for family members, WN could have drawn in many passengers were it only for better marketing channels.

  4. I’m curious about your statement: “…a majority of the demand for travel between the US and Mexico being on the Mexico side. Consumers in Mexico City are much more likely to choose a Mexican carrier.”

    I think the second sentence makes sense. But how does that matter? Assuming almost all people flying USMexico are making round trips, what does it matter which side they “start” on?

  5. I’m mildly surprised because if any non-legacy/US3 carrier would make it work, I thought it’d be Southwest. But, as Ben mentions, I think there’s a number of factors at work:

    1. The CBX in San Diego/TJ must have cut Mexico/SoCal ridership on US carriers to some not-insignificant degree. I don’t have numbers to support this assertion but having just been at CBX 10 days ago, and many times in the recent past, the queues for Volaris check-in were enormous, both coming and going. Clearing customs/immigration at CBX is a dream on both sides of the border and allows for “domestic” Mexico travel with ready access to the US. I can see this as a boon for Mexican and US travelers alike.
    2. Dovetailing #1, the fact that a recent trip to Puerto Vallarta was $275 r/t out of TIJ versus $750-1200 on US carriers for the same dates means I will NEVER fly to Mexico destinations on a US carrier unless there’s some sort of sale. And friends in both Orange and LA counties gladly schlep to SD for a weekend to also partake in the CBX savings. That doesn’t even account for the multiple connections many US carriers require to get to Mexican destinations. Seems silly to fly north, then east, THEN finally south to Mexico. Especially from San Diego.
    3. Even r/t trips originating in Mexico seem to be consistently (much) more expensive with legacy US carriers and Aeromexico. The income disparity between the average US and Mexican incomes, to me, means you’ll likely see Mexican (U)LCCs like Volaris, VivaAerobus, Interjet, etc dominate the domestic Mexican marketplace with just enough flights across the border into US border towns (or larger population centers like SFO) to adequately and cheaply serve the US-based Mexican populations and friends/relatives still living in Mexico.

    Again, this is total conjecture and anecdotal evidence, but just some observations from a SoCal flyer and frequent visitor to Mexico.

  6. This makes me a little sad. I’ve been taking a yearly climbing trip to Mexico for the past 4 years, and I’ve been flying southwest, first between San Antonio and then hobby. I was able to bring friends with my companion pass, I guess that’s no more. Back to American Airlines and connecting in Pheonix or Dallas

  7. The majority of the traffic to Mexico City from the US in general originates in Mexico City. Mexicans in general purchase plane tickets through travel agencies. Southwest doesnt sell through travel agencies. People in Mexico City wouldnt know about Southwest. And even if they did, Southwest.com doesnt accept Mexican pesos as payment and didnt have a system to convert pesos to dollars. not surprising that this didnt work out. They didnt try to do so, and severely underestimated the ability to sell the market.

  8. Other U.S. carrier cuts at MEX notwithstanding, the writing has been on the wall for WN at Mexico City since at least 2017. That year, Southwest Airlines was awarded 4 daily MEX slots divested by Aeroméxico/Delta in conjunction with those carriers’ antitrust immunity proceedings. WN only took 2 of those slots, bolstering HOU-MEX to a business-friendly 4x daily frequency but passing on the opportunity to start proposed 1x daily FLL-MEX and 1x daily LAX-MEX services.

    Much more recently, WN reduced frequency on the HOU-MEX route (its sole operation to the Mexican capital since ending SAT/SNA-MEX years ago) to 2x daily. I took this as a sign that WN was not getting the business travelers, and hoping to salvage the MEX operation by catering to primarily U.S.-based leisure and VFR travelers given the need to book at southwest.com. AM and UA no doubt provided stiff competition for O&D business travelers, while Interjet “the JetBlue of Mexico” likely appealed to not just Mexicans but American tourists as well.

    To be sure, a troubling omen for an airline that has grabbed all of the low-hanging fruit in the continental U.S. realm (WN serves every metropolitan area with over 2 million people, with the largest unserved markets after the addition of CVG being Greensboro/Piedmont Triad, NC and then Harrisburg, PA) and added all of the most popular leisure markets in the Mexico, Central America and the Caribbean. No wonder they’re so focused on Hawaii! If MEX didn’t work, we can probably forget about places like BOG or GUA…

  9. @Chris

    “I think the second sentence makes sense. But how does that matter? Assuming almost all people flying USMexico are making round trips, what does it matter which side they “start” on?”

    The people who start in CDMX are most likely Mexicans. As such, they will be a lot more familiar with Volaris and Interjet than they would Southwest. They will search the website of those companies and they are able to pay in cash in pesos for those flights if they want.

    Opposite of course for someone based in Houston.

  10. Big blow to me. My wife is Mexican. I flew that Houston route a dozen times the last year. Southwest is consistently the cheapest option, though I’ve flown United and American at times.

  11. Shame, but not surprising. Came down last week on WN and the flight from HOU had 42 passengers. Similar next day for family members on the same route. Overall execution seems oddly inept by WN — I get that DAL is not an option, but why not SoCal and MDW? Their baggage rules alone should have been a huge advantage.

  12. A large city doesn’t equal business. Especially a city where a large portion of the population lives in poverty.

  13. Surprised nobody has mentioned B6 – they are a cheap and easy option to get to Mexico City. I had a great flight there in April out of FLL.

  14. There is one point missing from the discussion which I think needs to be included. Almost every internal flight between two Mexican airports ends up with a change in Mexico city, a desperately overcrowded “hub” if ever there was one. There are remarkably few flights to/from Guadalajara, Mexico’s second largest city, or Monterey, the 3rd largest.
    Mexicans have a robust assortment of low-cost airlines, few of which fly to the US easily. Those low-cost airlines do not always survive, but they are the ones Mexicans are accustomed to fly on. Those airlines become familiar: e.g. Viva Aerobus. Almost none has a connecting agreement with a US airline. Even the Volaris and Southwest relationship is pretty awkward.
    When you add two fares together to/from a US city to a Mexican city, the cost is often quite high.
    Finally these Mexican “low-cost” airlines often fly peculiar schedules which north Americans do not take to easily: e.g. Tu & Fri one flight lv 7am ar 8:30 am and Sun 9pm-10:30pm. That is it for the whole week.
    There really are two systems, the Mexican and the US, which just don’t integrate easily.

  15. @RingRunner:

    My points, too. SAN is already a “focus city” for WN, so why not extend that focus? I get it that SAN is slot restricted with runways and noise abatement limitations, but there’s gotta be some way to adjust their existing slots that are perhaps underperforming and insert flights to MEX or any number of other potentially high-yield destinations. While I have minimal knowledge of the inner workings of WN, this just strikes me as a “We’ve tried absolutely nothing to increase yields to MEX, but we’re all out of ideas…” situation.

  16. @AR
    Agree, total conjecture and anecdotical evidence….
    SAN/TIJ market has nothing to do with HOU/IAH market

  17. Never understood why MEX is so expensive from the US, compared to US domestic flights of the same distance. AA quit flying ORD-MEX after several starts and stops. The others charge $400-$500 when LAX, about the same distance, is much less. Some of it is taxes, but not much.

  18. People in Mexico are very picky about brands, here the people prefer to pay an extra in order to catch a brand renowned product or company. The reason is that this gives the persons a social status (aspirational) and only a few are THE “adventurous” to try an unknown brand.

    For example, is a better product to fly in Jet Blue rather than AM, UA, AA, etc. BUT nobody will consider it (the same case for WN)Reasons, 1) Social Status, the person who takes an other airline it is seemed as a “poor or cheap” person 2) The people think that to take a flight in these carriers will be in old, dirty and cramped plane!!! 3) And the last one, is not fancy arrive to HOU instead of IAH.

    Lol, but if you want to have succes in Mexico, you have to invest tons of $ positioning your brand.

  19. In addition to MEX-ORD, AA has cut LAX service as well, now down to 1X daily on a tiny A319.

    What’s really sad is that AA does not offer JFK-MEX, and thus OW is the only alliance which does not link NYC and Mexico City directly – a sign of the very little love AA gives to the two largest cities in North America!

  20. @Chuck Lesker,

    The combined total of USA & Mexico taxes for a roundtrip originating in the USA to/from Mexico City is:

    $147.80 regardless of fare class, or airline

    These combined taxes have been very high for as long as I can remember, or at least for the flights taken in recent years, and fares seen in recent days/weeks.

  21. Off topic but…can someone explain to me why I can’t access southwest.com from Portugal? And no, it’s not my internet. I searched about the issue and lots of people from different countries have this problem. Every time I go to southwest.com I get a “ACCESS DENIED” error message.

    What’s up with that?

  22. @JD:

    Except that it absolutely does. If you’re talking about concentrations of Mexican/hispanic populations, than SAN/TIJ and access to the rest of Mexico is very much tied to IAH/MEX connections insomuch as broader fleet utilization and general airline network and route feasibility to/from Mexico.

    But thanks for your terrific input; you’ve been a superb addition to the conversation. /s

  23. I love Mexico City and am fortunate to have been able to travel many times for work and add on days to enjoy the city. I would never have thought to look for a flight on SW at any time to the city though! Maybe frequent SW fliers are more aware of SW international flights but I really never saw it as an option for international travel.

    I’d also add that a major downside to visiting the DF is that the airport is awful. Over-crowded and dated and old with not good service. They really needed a new airport though the logistics of the connections with the hideous traffic here made me wonder how it would work in practice to split the traffic between two airports. There just isn’t that much room in this caldera for a major international airport or to expand the current one. They are literally stuck between a rock and a hard place.

  24. I took this flight about 2 years ago. While the return flight was full, the outbound flight had very few passengers (max 20). Also, even though I had booked everything through Southwest and had a connecting flight on Southwest, there was nowhere to transfer in Hobby Airport. You had to exit immigration and go through the check-in process all over again – a very inconvenient and inefficient step.

    Still, sad to see airlines cut service as this takes away options for passengers in that city, especially lower fare options

  25. Such a shame. I took advantage of the HOU – MEX route plenty of times because SouthWest undervalued the point redemptions. I easily got roundtrip flights for weekends at 5,000 – 6,000 SW Points!

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