Will United Step in to Fill Void Left by Mexicana?

Mexicana ceased flying (again) on Saturday and it is increasingly likely that the historic Mexican carrier will be joining the likes of PanAm and TWA in that great boneyard in the sky.

That gives other air carriers a chance to grow in Mexico and the merged Continental/United (now officially approved) is in a position to lead the charge. Mexicana leaves a particular void in Los Angeles, a United hub, and if United is willing to re-invest in Latin America and re-allocate equipment, I see a market for growth and profit. At the very least, I am looking for United to add one more flight to Mexico City each day from LAX and a flight to Guadalajara or Monterrey.

Of course Mexican authorities might not like the idea of middle class Mexican jobs being replaced by American jobs. New and additional routes would require government approval and I expect Mexico would hold out for at least a little while (assuming slots are limited) to see if some financing group or rich investment outfit swoops in to “save” Mexicana, perhaps rebranding it Mexicana Airways, as Olympic did in the wake of its restructuring.

And that won’t be easy, either. Tenedora K, an investment group, already tried to purchase the airline on the condition that 1,366 flight attendants would be laid off and all FA’s would take smaller severance payments. The government promptly rejected their plan.

It would not surprise me if United is busy at work already thinking about how they can capitalize on Mexicana’s demise. I wish them success and hope to soon report back on new Mexican and Latin American destinations on United.

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