Uber For Businesspeople, A One-Stop Shop For Private FlyersFri, 12/01/2017 - 09:21
Q: What strengths help Aerolíneas Ejecutivas compete in the executive aviation market?
A: Aerolíneas Ejecutivas is the oldest private aviation company in Mexico. We cover everything in the business aviation sector, including FBOs, MRO services, aircraft sales and management of private aircraft. These business units are autonomous and work as separate businesses, each with its own executive management that reports directly to the General Manager of Aerolíneas Ejecutivas. This helps to set clear goals and development strategies according to each business.
We also advise on taxes, financing and regulatory matters for our customers. Aerolíneas Ejecutivas has three MROs in Mexico for private aircraft, two in Monterrey and one in Toluca. MexJet, a business with 30 planes, is the third-largest division within Aerolíneas Ejecutivas. The company acts as an Uber for businessmen, allowing them to book a flight through an app without worrying about maintenance and other expenses. Aerolíneas Ejecutivas provides one-stop, comprehensive services. Our main advantage is our experience. We are always ahead in security and certifications and we have set many industry standards.
Q: What hurdles has Aerolíneas Ejecutivas faced and what do you see as the main challenges for private aviation?
A: One of the biggest challenges is the use of N-plated aircraft. These are US airplanes that are not regulated and are not supposed to operate in Mexico because they lack local certifications. The government should put strict regulations in place for these planes but they are normally allowed to fly, creating unfair competition for all private aviation companies. Almost anyone can get a plane in the US and bring it to Mexico even if it is not registered, which is known as cabotage.
Q: How is the dollar-peso exchange rate affecting Aerolíneas Ejecutivas’ operations?
A: Fluctuations in the dollar-peso exchange rate have mirrored the uncertainty in Mexico and are expected to affect the economy for the next two years. We expect this period of instability to last until 2020. The private aviation industry operates in US dollars. When the US dollar rose to MX$22, it affected our commercial costs. Many of our clients were concerned and reduced expenses related to business trips.
Q: How do you expect demand for Aerolíneas Ejecutivas’ services to evolve in the coming years?
A: It would be naive to think that the private airline business model will stay the same. Companies need to innovate, especially considering that customers want time flexibility, lower costs and more availability. Clients in Mexico are changing their mindset from owning a plane to renting. This can provide many benefits but we must also understand that clients are not as loyal to one company as they were before.
Furthermore, a growing number of unregistered aircraft are permeating the market. If regulators do not limit this, it will be very easy to have 4,000 private planes in Mexico but this will not generate positive competition. Clients will have two options: rent a cheap, unregistered aircraft that may not follow the safety regulations established by local authorities or rent from a serious professional company. The government needs to intervene and establish rules so all companies can compete under the same conditions.
Q: What are your expectations for the private aviation market in 2018, considering Mexico’s upcoming presidential elections?
A: We are forecasting 10 to 12 percent more flight hours than in 2017, which illustrates our positive expectations for the market and the company. We fly approximately 15,000 hours per year, so it will not be easy to fly an additional 1,500 hours, which would mean flying five more aircraft. However, our participation in the market is growing, we have more clients and we are working on better ways to take care of them. Our main goal is to grow at least 10 percent in revenue in 2017 in comparison with the previous year.