aeromexico
© Jorg Hackemann

Aeromexico, which in two years has transformed its cargo business, has urged Latin American countries to modernise their Customs processes.

Rafael Figueroa, CEO of Aeromexico Cargo, told The Loadstar that change could boost traffic and efficiencies in the region.

“Infrastructure and processes are the biggest opportunity,” he said, “and the challenge is to modernise all Customs.

“If we want to be competitive, that’s what we have to do as a region. The processes need to be modernised if we want efficient hubs across the region.

“It should be on everyone’s agenda – it’s work that has to be done.”

Mr Figueroa is no stranger to “work that has to be done”. Since taking over as chief of the Mexican carrier’s cargo arm, he has revolutionised Aeromexico’s freight business.

“Two years ago, Aeromexico was behind, compared with most airlines. We had bad service, and the wrong pricing strategy.

“That world is over. We’ve had to be more innovative on pricing and products, and we have started specialised products.”

In two years, capacity has risen 50%, while income grew 60% and profit was up 79%.

Cargo now accounts for about 7% of the carrier’s business, up from 4% two years ago. And with a fleet comprising 90% narrowbody aircraft, it’s an impressive result that larger carriers have failed to meet.

“It’s not only widebody cargo that counts,” explained Mr Figueroa. “You have to learn to sell narrowbody bellies. We have to sell what we have. We now have load factors of more than 75%.”

While the carrier does wet-lease a freighter from ABX Air, for a service between Los Angeles, Guadalajara, Panama and Costa Rica, Mr Figueroa is not a great believer in freighters.

“Freighters are justified when they feed the bellies,” he said.

“We are always open and looking at options, but the strategy has to be feeding the bellies. I think that’s the way the market is going.”

The biggest opportunities for the carrier are in Latin America, as so many goods are trucked between Mexico and the US, he noted.

“We barely participate in the market, but have a 70% market share between Mexico and New York,” he said.

“Yes, Brazil is going through ups and downs, but I’m still positive about the South American region,” he added. “We just have to be positive.”

He identified pharma as a key product: “Many roads are not so secure, so pharma moves by air.”

About 40% of Aeromexico’s volumes are domestic, and it has a partnership with UPS and FedEx – deals which require the carrier to have one of the “best on-time performances in the world”.

On December 1, the carrier will go live with its new Mercator system for cargo.

“We think it’s the best system, and we are convinced that with the proper tools we can be very good.”

Aeromexico is currently proposing a joint-venture with Delta, although it is not yet clear if this will include cargo. But as a member of SkyTeam Cargo (in fact, Mr Figueroa is head of the alliance), it would not be an unsurprising step.

The venture is awaiting clearance from competition authorities – and it could be yet another string in the bow for the improving airline.

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