Mexico's Interjet has dropped a radical downsizing plan and instead is looking to accelerate expansion of its Airbus A320 fleet to take advantage of new opportunities in the fast-changing domestic Mexican market.
Interjet chief executive Jose Luis Garza says the carrier was preparing earlier this summer to return six of its 13 Airbus 150-seat A320s to lessors as part of a restructuring plan which included cutting capacity by 40%. But he says the plan was dropped after the carrier was able to forge a deal with grounded carrier Aerocalifornia last month to acquire 50 take-off and landing slots at Mexico City International Airport (MEX).
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Over the last month Interjet has quickly launched nine daily flights from MEX to seven destinations using capacity redeployed from elsewhere in the network, including its base at Mexico City's alternative airport Toluca. While costs are higher at MEX compared to Toluca, Garza says the yields are 15 to 20% higher on MEX routes and have the business traffic Interjet needs to become profitable later this year without downsizing.
Without the MEX slot deal, Garza said Interjet would have had to "drastically reduce its fleet and fixed costs in order to recover profitability for the rest of the year". In addition to trimming its fleet from 14 to eight A320s, Interjet would have deferred several of its 14 A320s on outstanding order.
"Fortunately that plan was never put into effect and we were able to get Aerocalifornia's slots and fast entry into Mexico City," Garza says. "Now it's just the other way around and we're anticipating accelerating our expansion. We haven't discussed that yet with Airbus but we feel there we will have opportunities to expand."
Garza adds Interjet is now looking at accelerating deliveries of some of the 14 CFM56-powered A320s it has on outstanding order as well as leasing additional used aircraft. Interjet, which began operations using seven ex-Volare leased A320s, has so far taken delivery of the first six aircraft from the 20-aircraft order it placed in 2005. It is slated to take two more A320s in November but only two additional aircraft in 2009. Garza says "we would be happy for an additional five" next year.
The aircraft are needed to expand operations at MEX, where Interjet wants to start using all 50 of its recently acquired slots as well as additional slots it believes will become available as some of Mexico's other existing carriers downsize or shut down entirely. Garza says Interjet also needs more aircraft to support new US flights, which the carrier plans to launch late this year, and expand again at Toluca, where it has cut back by about 25% and "doesn't want to leave a vacuum" for other Mexican low-cost carriers.
Some of Interjet's competitors last week launched a legal challenge to its slot deal with Aerocalifornia and are seeking a competitive tender to re-award the slots. But Garza says "the transaction is purely legal" and he is confident Interjet will ultimately win the case and will be able to continue operating at MEX in the interim.
Source: Flight International
