Flag carrying airline AeroMéxico has announced a swathe of route cancellations as a result of the ongoing grounding of the Boeing 737 MAX aircraft. Five destinations were announced to be canceled as part of the carrier’s second quarter earnings call.
AeroMéxico has six 737 MAX in its fleet and had expected to have one more delivered by now. The loss of capacity has negatively affected the airline’s capacity growth forecast. Their year on year capacity has reduced by 2.2% in this quarter, although the carrier says that this was a combination of the MAX situation and their own planned capacity reductions.
Overall AeroMéxico reported a net loss of 1.1bn pesos ($58m) in the second quarter of 2019. As such, the carrier is being forced to cancel a number of routes which should have been operated by their 737 MAX fleet.
The grounding of the 737 MAX and associated capacity losses has led AeroMéxico to announce a number of route cancellations from their Mexico City hub. These are:
- Guayaquil (three times weekly)
- Cali (four times weekly)
- Belize City International (twice weekly)
- Liberia, Costa Rica (twice weekly)
- Punta Cana, Dominican Republic (twice weekly)
The decision to cancel these routes comes as a direct consequence of the grounding of the 737 MAX and the reduction in capacity it has caused to AeroMéxico. During the conference call for the second quarter, CEO Andrés Conesa Labastida is reported by CH-Aviation as saying,
“With the grounding of the MAX fleet, we are reviewing our total capacity growth forecast for the year to be negative by between 3% and 4% for 2019 as a whole.”
The latest information from Boeing is that the 737 MAX is on target for certification in the fourth quarter of 2019. However, the fate of the jet is in the hands of the aviation authorities, so the manufacturer is unable to commit to a timeline for re-entry to service.
Simple Flying reached out to AeroMéxico regarding the cancellations, who provided us with the following statement,
“As a result of the MAX grounding, Aeromexico has had to cancel and postpone services to some destinations including Mexico City to Liberia, Belize, Punta Cana, Guayaquil and Kali.
“The Company is continuing to assess the financial impact of both the grounding of the 737 MAX aircraft in its fleet and the current and expected future delays in delivery of additional 737 MAX aircraft. The Company intends to seek compensation for the financial consequences of these events, and potentially other remedies, and will inform the markets once it is appropriate to do so regarding financial impacts and expectations, and the Company’s remedial actions. The date for re-entry of the 737 MAX to service remains uncertain.”
Other schedule changes
The news that AeroMéxico will suspend these five routes comes just days after it announced the suspension of a number of other routes. The three times weekly Mexico City – Tijuana – Shanghai service is slated for cessation by mid-December. Currently, AeroMéxico is the only operator of a route from Tijuana to Shanghai.
The carrier has been operating this route since 2008, and currently flies a Boeing 787-8 on the thrice-weekly service. This particular cancellation, however, does not seem to be a direct consequence of the 737 MAX grounding. Rather, it’s to do with Emirates.
Emirates recently announced their Dubai – Barcelona – Mexico City routing, which will be a fifth freedom route. AeroMéxico was unhappy with the decision to allow the Gulf carrier to operate a fifth freedom between its home city and Europe, calling for regulators to reconsider their decision.
In order to compete on the route, it appears AeroMéxico are planning to beef up their own services to the Spanish city. Routes Online note that frequencies on this route have been increased from December 13th, from three times a week to five per week. By March 2020, it will go to a six times a week schedule, and by April 1st, it will be daily. It is likely, therefore, that the carrier is looking to redeploy the Shanghai 787 to compete with Emirates on this lucrative route.
As well as the Shanghai route, AeroMéxico previously announced the cessation of their Mexico City – Guadalajara – Salt Lake City service, and have delayed the launch of their Guadalajara – Atlanta daily service until September 2019. Similarly, two thrice-weekly services from Guadalajara and San Luis Potosi to Detroit have been pushed back to April 2020.
AeroMéxico has noted that they intend to seek compensation for the grounding of the 737 MAX and has said they will inform the markets “once it is appropriate to do so”.