financetom
Business
financetom
/
Business
/
Viva Aerobus boss says politics grounding Allegiant tie-up
News World Market Environment Technology Personal Finance Politics Retail Business Economy Cryptocurrency Forex Stocks Market Commodities
Viva Aerobus boss says politics grounding Allegiant tie-up
Aug 22, 2024 8:33 PM

MEXICO CITY (Reuters) - Mexican airline Viva Aerobus believes the U.S. government's pause on reviewing a proposed tie-up with Nevada-based Allegiant Air is political rather than technical, the Mexican carrier's chief executive said on Wednesday.

U.S. regulators suspended the review of the joint venture last year, citing concerns over actions by the Mexican government affecting Mexico City International Airport (AICM).

Mexican officials and executives have said the concerns referred to a government-mandated move of cargo flights from the capital's main airport to a newer, farther-away airport spearheaded by the president, as well as a reduction in take-off and landing slots at AICM.

"I would think (it's political)," Viva CEO Juan Carlos Zuazua told reporters. "Obviously we're in the middle of election season in the United States right now, we don't know if it will be before or after, but let's hope (the tie-up is passed soon)."

The U.S. Department of Transportation (DOT), which has alleged the airport changes are to the detriment of existing carriers and potential new entrants, also moved to unwind a similar joint venture between Delta Air Lines and Aeromexico this year.

Mexico has seen a boom in tourism from the United States in the years after the COVID-19 pandemic, however Mexican airlines have seen their capacity hit by engine issues, plane shortages and the airport slot limitations.

Viva currently has around 21 planes grounded due to Pratt & Whitney engine problems that have affected airlines globally, Zuazua said. Competitor Volaris has between 30 and 34 planes out of service, its chief executive later added after a joint event to launch an anti-fraud campaign with U.S. firm Accertify.

Viva has turned to "wet leasing" - a practice in which one airline provides an aircraft, crew and maintenance to another carrier - to boost its capacity in the meantime, despite an outcry from unions over the use of foreign crewmembers.

Volaris, meanwhile, is not "at a point where it could pay for" wet leases, its CEO Enrique Beltranena said.

Domestic flight prices have risen around 15% in the past year, analysts say, due to restricted capacity and a government-mandated reduction in slot assignments at AICM.

Mexican President Andres Manuel Lopez Obrador has been hostile to the nation's airlines during his administration, often attacking Aeromexico in his morning press conferences.

Last year, he launched the military-run carrier Mexicana.

Lopez Obrador's mentee and successor Claudia Sheinbaum is set to take office in October.

"We need to work with (the incoming administration), to talk with them," Beltranena said. "Sometimes it's easy to say, 'We're going to move things here, or get rid of this, or reduce slots,' but sometimes we don't see the implications that has."

Comments
Welcome to financetom comments! Please keep conversations courteous and on-topic. To fosterproductive and respectful conversations, you may see comments from our Community Managers.
Sign up to post
Sort by
Show More Comments
Related Articles >
This sustainable jewellery brand is luring some women away from gold
This sustainable jewellery brand is luring some women away from gold
Oct 30, 2023
Aulerth's offerings range from ₹5,000 to as high as ₹2.8 lakh. Are women willing to spend this much on jewellery made from scrap? Founder and CEO Vivek Ramabhadran definitely believes so. Aulerth produces couture-inspired pieces in association with designers like JJ Valaya, Suneet Varma, among others. It has reported 33% repeat customers in the past year and expects a spike to 40% soon.
Suzlon's S144–3 MW wind turbines get big boost from Indian government
Suzlon's S144–3 MW wind turbines get big boost from Indian government
Nov 15, 2023
Th Suzlon wind turbines received the RLMM (Revised List of Models & Manufacturers) listing from the Ministry of New and Renewable Energy, marking an important milestone for the successful commercialisation of the product. Shares of Suzlon Energy Ltd ended at ₹40.49, up by ₹1.85, or 4.79%, on the BSE.
SJVN secures 200-MW wind power project at ₹3.24 per unit
SJVN secures 200-MW wind power project at ₹3.24 per unit
Nov 16, 2023
Projected to generate 482 million units in its inaugural year post-commissioning, the cumulative energy generation over a 25-year span is anticipated to reach 12,050 million units. Shares of SJVN Ltd ended at ₹75.17, down by ₹0.50, or 0.66%, on the BSE.
Tata Power Renewable Energy wins 200-MW project in collaboration with SJVN
Tata Power Renewable Energy wins 200-MW project in collaboration with SJVN
Nov 28, 2023
The firm and dispatchable renewable energy (FDRE) project, designed with a hybrid of solar, wind, and battery storage, is aimed at providing a stable and dispatchable energy supply during peak hours. Shares of Tata Power Company Ltd ended at ₹270.75, up by ₹12.60, or 4.88%, on the BSE.