Mexican ministers have failed to agree on the future of Cintra, the holding company for Aeromexico and Mexicana. Unless they find a way to resolve their differences, the issue could be decided by Mexico's President Zedillo.
The immediate question is what sanctions the competition commission can impose on Cintra for engaging in what it calls predatory practices. Ultimately, however, the government, which hopes to sell off its controlling stake in Cintra, must address the larger issue over whether it should split Aeromexico and Mexicana into separate companies. The competition commission argues that it should; the secretary of communications and transportation (SCT) believes the two airlines should stay together.
The Intersecretarial Commission on Financial Costs heard these arguments for the first time in late February. But this meeting of government finance, competition, and transport ministries, which was widely expected to resolve the dispute over Cintra's future, proved an anticlimax. It reached no decision other than "to continue our study and evaluation."
Aaron Dychter, SCT undersecretary for transport, told reporters on the eve of this summit that he felt it was better to keep Aeromexico and Mexicana together to strengthen their hand in international competition. The competition commission, which is more concerned with domestic issues, claims the two carriers have ignored orders that they should compete on domestic routes and have, in fact, engaged in what a commission spokesman calls "a camouflaged monopoly."
Source: Airline Business
