Aeromexico Dreamliner Leads Nation’s Record Fleet Upgrade

Grupo Aeromexico SAB (AEROMEX*), Mexico’s largest airline, is spearheading the biggest fleet upgrade in the nation’s history with Boeing Co. (BA)’s Dreamliner as its competitors buy planes from Airbus SAS and Russia’s Sukhoi.

The Boeing 787-8 jet will equip Aeromexico with advanced technology after years in which Mexican airlines used outdated planes, Chief Executive Officer Andres Conesa said today at Mexico City’s airport. Aeromexico took delivery of the first plane last week and is due to get 19 Dreamliners through 2019.

“Now we have better airplanes, better technology than our competitors,” Conesa said. “We’re betting on the future of this country and we think it’s a very promising one.”

New jets will allow Mexican airlines to take advantage of demand for air travel that’s poised to eclipse 2012’s record. Interjet and Volaris have each ordered more than 40 Airbus jets and Interjet is also adding Superjet 100 regional jets from a joint venture between Moscow-based United Aircraft Corp.’s Sukhoi and a unit of Italy’s Finmeccanica SpA. (FNC)

Aeromexico’s Dreamliner will boost profitability by cutting fuel costs and serving routes connecting Mexico City with New York, Tokyo and Paris later this year, Conesa said. The carrier will receive its second Dreamliner in about four weeks, and its third is arriving in about six weeks, he said.

Photographer: Susana Gonzalez/Bloomberg

Pedestrians watch a Grupo Aeromexico SAB airplane land at Benito Juarez International Airport in Mexico City. Close

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Photographer: Susana Gonzalez/Bloomberg

Pedestrians watch a Grupo Aeromexico SAB airplane land at Benito Juarez International Airport in Mexico City.

The shares rose 2 percent to 18.27 pesos at the close in Mexico City, paring their decline to 5.3 percent this year.

Lucrative Routes

Aeromexico’s order from Boeing -- 100 planes with a list value of $11 billion made last year -- will refresh a fleet that consisted of 112 planes made by the Chicago-based company and Brazil’s Embraer SA (EMBR3) as of June 30. The purchase comprises 90 of Boeing’s 737 Max single-aisle jets and 10 of the wide-body, all-composite Dreamliners, a transaction described by the government as the biggest aircraft purchase in Mexico’s history.

The Dreamliner will allow Aeromexico to fly direct from Mexico City to Tokyo, which it can’t currently do, Conesa said. It’s also planning to use the jet on flights from the Mexican capital to London and Buenos Aires starting next year, he said.

“There are important opportunities that we have to take advantage of to make Mexico City more of a hub to connect with the rest of the world,” Conesa said. “The arrival of this equipment helps you advance in that strategy by offering a better product.”

Domestic Markets

While Aeromexico will use its Dreamliners on lucrative long-haul routes, the Superjets for Mexico’s No. 2 airline will be deployed in smaller domestic markets, according to Marco Montanez, an analyst with Vector Casa de Bolsa SA in Mexico City. Interjet plans to unveil the Superjet 100 plane tomorrow at an event in Toluca, Mexico.

“This aircraft will be mainly used to open new regional routes in Mexico, mostly of shorter distance, where there’s a lot of demand and growth opportunities,” Montanez said in an e-mail.

Interjet, owned by ABC Aerolineas SA, has ordered 20 of the aircraft and has options for 10 more.

The carrier is scheduled to add two Airbus A320 single-aisle planes in November to its current fleet of 39 A320s and two Superjets, according to an e-mail from the office of Chief Financial Officer Luis Alejandro Beristain. The company also has an order for 40 A320 Neo planes to be delivered from 2018 through 2023.

Volaris, owned by Controladora Vuela Cia. de Aviacion SAB, will receive 47 A320 jets through 2020, the company said in an e-mail. The airline’s fleet features Airbus planes comprising 22 A319s and 21 A320s, according to its website.

Aeroenlaces Nacionales SA, the airline known as VivaAerobus, is evaluating options for an aircraft order, according to Alejandra Ochoa, a spokeswoman. Its fleet of 19 Boeing 737 aircraft has an average age of 15 years, Ochoa said.

“It’s going to happen, but there’s no agreement yet,” she said in a telephone interview.

To contact the reporter on this story: Brendan Case in Mexico City at bcase4@bloomberg.net

To contact the editor responsible for this story: Ed Dufner at edufner@bloomberg.net

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