Aeroméxico (AM, México City International) has announced it will cut capacity and reduce its network footprint as it grapples with rising oil prices and overcapacity in the Mexican market.
Against the backdrop of a net loss registered for the first nine months of the year, AeroMéxico said it would retire three E170s and two B737-700s from service while, at the same time, suspend the following routes in 2019:
- México City International to Boston;
- Washington Dulles to Portland International;
- Monterrey Mariano Escobedo to Las Vegas Harry Reid as well as Tijuana, Merida M. Crescencio Rejon, and Veracruz;
- Guadalajara to Cancún and San José, US.
Aeromexico operates thirteen B737-700s, four B737-8s, thirty-seven B737-800s, nine B787-8s, and eight -9s at present. Its Aerolitoral unit operates thirteen E170s and forty-seven E190s.
"These changes imply that Aeromexico's seat offering will remain flat in 2019 compared to 2018, the first time since 2009 that the airline will not grow," it said adding that "this has been one of the most challenging years in the last decade for the domestic aviation industry."
As such, the carrier said that while it had continued to deliver an operating profit, it has so far registered a net loss this year.
For the third quarter of 2018, its net loss reached MXN617 million pesos (USD32 million) on the back of MXN18.0 billion (USD930 million) in expenses, a 23.3% year-on-year increase primarily due to higher peso-denominated fuel prices (up 53.0% year-on-year), exchange rate depreciation, and increased capacity.
