Jorge Badia
Deputy Director General
Magnicharters
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View from the Top

From Mexico to the Americas

Thu, 12/01/2016 - 12:26

Q: How does Magnicharters differ from low-cost airlines in the tourist segment?

A: Low-cost airlines are growing as an attractive choice for passengers interested only in transportation from A to B. Our model is vastly different because we focus on the tourism market niche overlooked by other airlines, instead of targeting corporate travel. Catering to the tourism niche means we must offer much more than an airline ticket. We offer comprehensive services for trips including transportation, hotel and tours. Our objective is to provide excellent customer service at all times from the moment the ticket is sold, at the airport reception, during the flight, the reception at the hotel, tours provided and during return journeys. To ensure we adhere to our promised quality standards, we handle all customer service at the airport and hotel and stay in direct contact with passengers at all times. An interest in strengthening our service chain led to our focus on touristic routes, including Mexico City to Merida, Cancun, Acapulco, Huatulco and Zihuatanejo. Our main hubs are Mexico City, Monterrey and Guadalajara.

Q: How does Magnicharters plan to renew and expand its existing fleet?

A: We have 11 Boeing 737 aircraft: two 737-200s, eight 737- 300s and one 737-500. We are replacing the 737-200 for the 737-300, which employ midlevel technology and is still being used by many airlines in the US. The company is implementing a five-year plan to modernize our entire fleet, probably with 737-700 or 737-800 models. This will require several training courses for our personnel from maintenance workers to flight attendants. Once this renovation is implemented, we will analyze whether to expand to the US and to Central and South America using the same tourismfocused business model. We will also expand our fleet to 20 aircraft within the next five to 10 years. The new, modern fleet will allow us to reach greater distances and optimize airplane use as modern aircraft require less maintenance. While this is a large investment, it is necessary to remain competitive, especially after the implementation of BASA.

When we acquired our aircraft, Airbus’ fleet was young and untested in the country. We leaned toward Boeing aircraft, which was an established brand among Mexican airlines. Changing to Airbus at this point is not a feasible strategy because it would involve extremely high training expenses as well as new tools and storage.

Q: What are Magnicharters’ plans for growth and new areas of expansion?

A: Magnicharters is three companies in one: an airline, a shipping enterprise and a charter company. Commercial aviation accounts for 95 percent of our revenue and 5 percent from charter services. We have not taken advantage of our potential as a shipping company but we hold all the necessary permits and that is something we will implement in the future. We are commercializing chartered services for large groups, which is economically more feasible for them.

The company performs its own maintenance services and having these in-house increases our competitiveness. The company plans to continue offering competitive prices. Due to low oil prices and a more expensive dollar, the Mexican economy is facing one of its most difficult periods. We expect this trend to turn around and that individuals will increasingly travel for pleasure. Mexico has faced many crises but always recovers. As an airline we are betting on the country’s recovery as the foundation on which to expand. We also will focus on widening our international reach. We have some partners in South and Central America with whom we will need to increase exchanges once we expand to these regions. In the US, we would like to generate new partnerships with hotel chains.

Magnicharters is the second oldest airline in Mexico. Having begun with two pilots, five flight attendants and three mechanics, we now have over 1,100 employees. We also are the only airline in Mexico to have recovered after an operations suspension, thanks to our excellent workforce and administration. We are capitalizing on our experience to continue growing. The company is part of the committee for the construction of the New International Airport of Mexico City (NAICM) and we have already negotiated several adjustments with the developers, including larger waiting rooms and hangars close to the landing tracks.