Mexico's competition commission has launched a new investigation into Cintra, the holding company for Aeromexico and Mexicana. The commission intends to focus on whether Cintra complied with conditions the commission set in 1995 when it approved Cintra's formation.
This is the commission's second investigation of Cintra. In 1997 it delivered a critical assessment of Cintra's compliance with requirements that Aeromexico and Mexicana operate separately and compete with each other in domestic markets. Instead, it found that they had concentrated market share, driven out rivals, and raised fares on routes they controlled.
The new investigation, announced in late September, is to be completed before the end of the year. If the commission finds that Cintra has not met its conditions, it is unclear what the commission may do. It has been at loggerheads with other federal agencies, especially the department of transport and communications, for over a year. The SCT maintains that Cintra's ownership of both airlines allows them to stand up against foreign carriers. The recent decisions by Aeromexico and Mexicana to join rival alliances raise questions, however, about how that common ownership helps them in foreign markets.
Even if the commission is powerless on its own, if it concludes that Cintra has violated the terms of its formation, that would give it a lever to help break the impasse. That may again re-open the issue of whether or not the two airlines should be merged into a single carrier - provided Cintra survives in its present form.
Source: Airline Business
