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 Introduction - Alliances & Investments - Expanding frontiers - Free market -
Telecom and transport - Banking - Energy sector - Tourism - States of Opportunities -
Agro Industry - Multinationals - Industrial States 
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Interview with
Lic. Alfonso Pasquel B.,
Chairman of Aeromexico,
4th February 2000
Website : www.aeromexico.com.mx
| Can you give us a brief outline of Aeromexico’s developments and achievements throughout the last five years?
The last five years have been quite interesting for our company. After a very serious crisis that affected us in 1994, when the company was still very young; Aeromexico was founded between 1988 and 1989, we started establishing very important re-structural programs. I would suggest separating them into three stages. First of all we undertook a cost-cutting program in order to become a survival company. Our policies focused on eliminating all the things we did not need. The second stage we started to really build a future. We invested very much in extensive planning and at that time we took the decision to rely all of our IT services to EBS. Today all of our systems are managed by EBS and the technology used is the same as the one used by Continental and Lufthansa. We were then able to define four objectives for our company to carry out: profitability, market, service and pride. Profitability was achieved by cutting and relocating expenditure, it also took a lot of investments and improved marketing strategies, and in 1996 we transformed a survival company into a financially productive one. Marketing meant most of all knowing our market. At that time we started to enhance the possibility of Aeromexico becoming a member of an important alliance. We started dealing with Delta Airlines and Air France and working with them turned out to be a very solid investment because it gave us the chance to become global. Because of our association with Delta, which is the largest carrier in terms of domestic traffic in the United States, we carried about 101 million passengers throughout the States last year and we were the largest market between Mexico and the U.S. We created in 1996 a very important alliance with Air France because we knew the potential of the Charles De Gaulle airport, the only one in Europe that can handle flights to Central Europe while still having a worldwide distribution. So with one daily flight to Paris we are sure that Air France will distribute our traffic over there. We also started to invest, at that time, in what is now known as "business-class services". As far as the word service is concerned, we devoted our attention to in-board and at-the-gate services in order to become the largest domestic carrier by far. Today 40% of the national traffic travels with us. By improving our service at the gate we avoid congestion at boarding time and our passengers really appreciate our efforts. We implemented a frequent flight program and a business class program called "Mundo Premier". Now we have all kinds of business associates in this kind of programs. At this point I will mention an outstanding characteristic of Aeromexico: our punctuality record. We are the most punctual airline in the world. (The former "Aeronaves de México" was called pejoratively Aero-May-Be because of both the cancellations and the lack of punctuality.) The fourth objective was to have people proud of the company they were working for. It has been quite important for us to count on individuals who come out from the airline business. We have today working for Aeromexico people from PepsiCo, Chrysler, Condumex and others, se we are a team working together and projecting the company towards the future. Since all these changes took place we have grown steadily. Last year we carried almost 9 million passengers and had a revenue of 1.2 billion dollars with an excellent bottom line.
As you know, a month ago President Clinton had a meeting with members of the FAA and also in London with the BAA and they were talking about punctuality and communications between pilots in the cockpit directly down to the tower. What can you say about Aeromexico’s initiative to make sure the people are aware that there will be no problems with traffic at landing points?
Mexico has not got to the point where you have traffic problems yet. In fact the most congested airport is the "Aeropuerto de la Ciudad de México", but besides this one there are no congested airports in Mexico. The programs in developed countries established to avoid traffic problems have mostly an ecological purpose and through the recent privatization of our airports we have adapted a stage three norm related to contamination by noise. Really we have no problem with traffic, in fact, everyone knows that we are going to be on time.
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Now that Aeromexico is expanding and touching other markets with all of its international flights, it is impossible for you to forget about traffic and problems everywhere else. Now, do you think that Aeromexico will continue to be a leader in the service that it provides?
Well, other airlines are trying to achieve a certain level of quality, and we know that when they do, we will be waiting a little bit ahead. For us service is a culture, and that’s why we have been the most punctual airline in the world for the past eleven (11) years.
Today there has been a change in the trend of business travelers. As you know, before a traveler will make one trip without looking at, for example, the full package of tourism opportunities that Mexico provides. Combining that with Club Premier, why should I come to you for your service and your good products instead of Mexicana or one of the other national or international companies?
When we made this kind of questions to ourselves in the management group, our first concern was what we were going to give to our customers. We had to have a lot of presence, which means global presence, not a caterpillar presence. For example, tell me if you can remember the names of all the airlines that form the Star Alliance? You can’t! So, first of all, our main challenge was what was going to be the Global Alliance. And we think that we achieved to have a very strong presence in the U.S. domestic market trough Delta and in European and African markets trough Air France. Secondly, to have a strong national presence we had to link domestic systems. Today only 2% of the national population catches one flight a year. So, with all this population and the great distances to cover, Mexico’s great potential represents for the leading national carrier, a great responsibility. As far as the word service is concerned, we are convinced that your flight experience has to be good, that you have to be treated with a smile, and we know that Mexican attributes for service are very important. We have aligned our company’s processes towards what we know our customers want and deserve. And we will keep going on like this.
What about security?
We have been certified by the FAA who sends us supervisors continuously and we have two very direct watchers, Delta Airlines and Air France who scrutinize periodically all of our security programs.
A great percent of our readers are looking to see what is happening with Mexico right now. What would you think will be happening in three years time?
In three years the reticence the United States has towards NAFTA will be gone because they will finally accept that it has been also very useful for them. Mexico will be probably growing steadily at a rate of 3.5% per year. We will be finally handling this new democracy we are starting to live with. We will then have a lot of capital coming from Europe, and I tell you, if Mexico can achieve with this new free-trade-agreement half of what we have with NAFTA, it would be great.
For how long have you been in charge of Aeromexico?
For seven years, and before taking my place here at Aeromexico I worked as a banker for Banco Comercial Mexicano and Banca Cremi, until Mexican government took charge of the national banking system.
As you know our readers are mostly businessmen. What is your final message for them?
Just try us. Give yourselves the opportunity to try us.
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© World INvestment NEws, 2000.
This is the electronic edition of the special country report on Mexico published in Forbes Global.
July 3rd 2000 Issue.
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MEXICO
