U.S.-Mexico Air Travel Is Getting a Lift From NAFTA

SILAO, Mexico

Travelers flying between the U.S. and Mexico sometimes felt as if they took two steps back for every step forward: Costly, time-wasting connections were the rule.

But few industries reflect the growing economic ferment between the two countries like that of airlines, which are falling over one another to provide nonstop service between mid-size cities long considered air travel backwaters.

Hank Hale, manager of the huge General Motors Corp. assembly plant in the growing factory district of central Guanajuato state, is a case study for the burgeoning cross-border airline market.

“It’s made a tremendous difference. This infrastructure has opened the door to more investment and business in Mexico,” Hale said recently, speaking by cellular phone from his seat aboard a Continental Airlines jet at Bajio Airport here moments before takeoff for Houston.

He was en route from the GM factory to Atlanta for a weekend with his family, a trip that a few years ago would have required him first to fly south, to Mexico City, in order to go north. And today, Delta Air Lines starts nonstop service between Bajio Airport and Atlanta--even more convenient for Hale--adding to Continental’s existing nonstop flights to Houston and Los Angeles.

The U.S. and Mexican economies have grown more deeply intertwined since the North American Free Trade Agreement took effect Jan. 1, 1994, fostering waves of business travel as trade has doubled to nearly $300 billion this year. With both economies humming, tourist trips and family visits have also surged, fed in part by curious second-generation Mexican Americans wanting to see where their parents came from.

The resulting demand for air travel has coincided with the advent of smaller, 50-seat jets that make short hops profitable and the privatization of Mexico’s airports, which has left them with money to spend on expansion.

The air travel figures bear out the dynamism: The number of passengers flying across the border surged to 12.3 million in 1999 from 8.81 million in 1995, according to Mexican civil aviation authorities. At that pace, Mexico could surpass Canada as early as next year as the leading bilateral air travel market for the United States.

The boom goes beyond the number of passengers to the number and nature of the flights themselves. Increasingly, the new flights are to regional cities such as Tampico on the Gulf Coast and Hermosillo in northwestern Mexico, not just to Guadalajara, Monterrey and the capital.

“Before, I always had to connect through Mexico City to go to the western United States, and I always had to sleep overnight in a hotel to make a morning connection,” said Felix Rubio Villanueva, who owns the small Maya Inn in Merida, Yucatan’s handsome capital.

Merida, home to some of the maquiladora (foreign-owned assembly) factories that have underpinned Mexico’s economic boom, used to have nonstop international service only to Miami. Now Continental flies from Merida to Houston, and today Aeromexico is inaugurating nonstop service from Merida to Atlanta.

These flights have connected Merida to a skein of new routes for business travelers and tourists alike after years of relative isolation while Cancun, 2 1/2 hours by road to the east, grabbed the spotlight. Merida is now reclaiming a prominence it held when American Airlines made it its first international destination in 1941 with flights from New Orleans.

The California-Mexico market is growing steadily this year, most of it California-bound, said Rolf D. Hoehn, Aeromexico’s western U.S. manager in Los Angeles. The airline added another Mexico City-Los Angeles flight this year and will add another L.A.-Guadalajara nonstop this fall.

Other California cities want in on this revived action, to serve both business and family traffic. Ontario sent a delegation to Mexico City this year to urge Aeromexico and Mexicana Airlines to resume nonstop service to Ontario International Airport, which was suspended in August 1994 during a recession.

Ontario Mayor Gary Ovitt said in his pitch for renewed air service to Mexico: “The business climate has dramatically changed. In the past decade, the Inland Empire has added more than a million jobs [and] payrolls have doubled. We think we have a good match.”

A new generation of passenger jets with fewer than 100 seats has played a big role in this shift, changing the economics of serving smaller cities.

Using the 50-seat Brazilian-made Embraer jet, Continental Airlines has more than doubled the number of Mexican cities it serves from its Houston hub, from 10 in 1994 to 21 cities this year. The new destinations this year include Hermosillo, Puebla, Chihuahua, Tampico and Aguascalientes, all of which have seen substantial economic growth.

“We’re going to markets now where full-sized jets with over 100 seats would not have been profitable,” said Continental spokeswoman Karla Villalon. “As business develops, we can add not only new destinations but also frequencies [per day].”

Aeromexico and its partner Delta are leaders in the expansion of U.S.-Mexico airline service. Delta relies on its own planes as well as its smaller Delta Connection feeder airline, which operates 50-seat Canadian-made Bombardier jetliners as well as larger aircraft. The flights link such Mexican cities as Monterrey and Puebla with Atlanta and Dallas-Fort Worth.

Another beneficiary has been the sleepy northwestern Mexico city of Hermosillo, which until a couple of years ago had just a single international flight, to Tucson.

Today, Aeromexico is making Hermosillo into a regional hub, with nonstop flights between Los Angeles, Phoenix and, most recently, Las Vegas. Hermosillo serves small cities throughout northwestern Mexico such as Mazatlan and Los Mochis. And Continental goes from Hermosillo to Houston, America West Airlines twice a day to Phoenix and Aero California to Los Angeles.

“All of this boom has occurred in the last two years,” said airport administrator Dante Homero Rios Concha. “The industrial growth and strong economy of Sonora [state] have had a direct repercussion in the airport, which is now a national hub. Before, to get to Hermosillo you had to go through Mexico City or Guadalajara, far to the south. Now you can fly straight to Hermosillo, and on to 18 other cities. This has ended the need to go south so you could north.”

Rios Concha said the privatization of the airport “has made available investment capital that wasn’t around before, allowing us to acquire the technology we need for sustained growth.”

In past years, destinations such as the Bajio region of central Guanajuato state were ill-served by any international flights, and those that did stop here catered largely to the migrant workers traveling home from the United States.

The much-expanded Bajio Airport, situated between business hub Leon and tourist center Guanajuato city, has seen a burst of direct international traffic. In all of 1994, the airport handled about 139,000 international passengers. Just through August this year, more than 252,000 passengers traveled to and from U.S. airports via Bajio.

That growth reflects the region’s boom in export-driven factories as well as tourism. The lines at the airport’s check-in counters one recent day were equally balanced among corporate types in suits, sunburned tourists and cowboy-hatted laborers.

The benefits to business are hard to exaggerate. David Patterson and Scott Lake, who work for an electrical supply wholesaler in Houston, were flying home recently from Bajio aboard a Continental flight after visiting a customer--an electric plant being built by Bechtel Engineering in the Guanajuato town of San Luis de la Paz. The suppliers visit the site at least monthly.

“The Bajio flight lets us avoid a whole day’s travel through Mexico City,” Patterson said. “Now we can fly down, have a meeting the same day and get home the next day.”

Alaska Airlines has long capitalized on its north-south route structure and its seasonal Alaskan traffic to build a growing winter service to Mexican beach destinations out of Los Angeles, San Francisco and Seattle. Dave Palmer, assistant vice president for marketing, said Alaska Airlines has up to nine daily flights to Los Cabos, including five from Los Angeles International Airport, and the airline is adding three more daily flights.

Palmer noted that other Pacific Coast beach resorts, including such Mexican cities as Zihuatanejo and Manzanillo, had approached the airline to start service, offering to absorb any initial losses to give the route a chance to prosper. In both those cases, the start-up guarantee paid off. Both routes are flourishing.

“We’ve seen a change in the traffic,” Palmer said. “It used to be just couples and spring-break crowds. Now you see families with children. The whole idea of the cross-cultural relationship between the United States and Mexico is so different from 10 years ago. There is so much more awareness.”

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Air Space

U.S.-Mexico air traffic has nearly doubled in about a decade, and nonstop service is now reaching former aviation backwaters such as Silao. Number of passengers in millions:

1988: 6.8 million passengers

1999: 12.3 million passengers

Trans-Border Travel

Mexico ranks as the United States No. 2 air partner but is expected to move into first place next year. The current ranking:

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Market Passengers (in millions) U.S.-Canada 13.1 U.S.-Mexico 12.3 U.S.-Britain 9.5 U.S.-Germany 6.8 U.S.-France 3.7 U.S.-Italy 2.7 U.S.-Brazil 2.1 U.S.-Argentina 1.2 U.S.-South Korea 0.8

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Source: Mexico Directorate of Civil Aviation