Last weekend I saw my parents who traveled with Aeromexico to the United States, a Mexican airline that faced an economical crisis in 2013 that threatened the existence of the airline. I was surprised with their decision of traveling with Aeromexico since other airlines offered a better service and a more comfortable trip. To my surprise, they told me that after the economical crisis they created a new strategy that was implemented last year improving the Mexican airline. When I got back to Vancouver I decided to investigate about its growth, but most of all, I wanted to know how Aeromexico (that was almost disappearing from the Mexican airlines market) had been able to get back in the market.
After some research, I realized that, as my parents told me, Aeromexico is having a significant growth. Even though the market conditions in Mexico became unfavorable this year, Aeromexico “recently cited statistics from the country’s DGAC showing that domestic air passenger traffic increased 10.5% year-on-year during the first two months of 2014.” Also, their presence in the national market is gaining force, as it is the market’s leader.
http://centreforaviation.com/analysis/aeromexico-trades-domestic–international-market-share-gains-for-lower-yields-as-2q-profits-drop-180494
But, how did Aeromexico accomplish these achievements in such a short period? First of all, one of Aeromexico’s strategies was to change their 767s airplanes to 787-8s airplanes, which are bigger and have a more advanced technology. Also, the Mexican airline decided to install Gogo in-flight Internet, which is 20 times faster than the competition placing new value proposition. Finally, the company decided to adopt a pricing strategy that decreased their current prices to the point in which they compete with their competitor’s fares, making it more attractive for the national market.
http://www.nycaviation.com/2012/07/aeromexico-commits-to-100-new-boeing-787-dreamliners-and-737-maxs/#.VGBdQ4f4vFI
In my opinion, even though Aeromexico changed their airplanes and started offering in-flight Internet, I think that the most powerful strategy they started implementing was lowering their prices. More than 50% of Mexico’s population is low-middle class, and with the lowered prices, Aeromexico is reaching more of the national market and increasing their sales.
Sources:
– http://centreforaviation.com/analysis/aeromexico-outlines-its-revenue-and-network-strategy-in-an-uncertain-mexican-market-167696
– http://centreforaviation.com/analysis/aeromexico-trades-domestic–international-market-share-gains-for-lower-yields-as-2q-profits-drop-180494