Air Travel May Double

Bloomberg.com: Latin America Updated: New York: Dec 28 17:46 London: Dec 28 22:46 Tokyo: Dec 29 07:46 US AU BZ FP GR HK IM JP LN SM IND : Regions Top Worldwide Regions Asia Australia & New Zealand Canada Europe Germany Japan Latin America U.K. U.S. Markets Economy/Politics Commentary Sports Culture Bloomberg RSS RESOURCES: Bloomberg TV Bloomberg Radio Markets Latin America E-Mail This Story Printer-Friendly Format Venezuelan Economy Grew 9.4 Percent in 2005, Fueled by Government Spending Codelco Union Workers Delay Strike at Chile Copper Mines for Wage Talks Brazilian Central Bank Expects 4 Percent Growth in 2006, Faster Inflation Mexican Air Travel May Double in 3 Years on Discounts (Update2) Dec. 23 (Bloomberg) -- Mexico is preparing for domestic airtravel to double in as few as three years, predicting newdiscount airlines such as Interjet will pull 20 millionpassengers off the bus, the country's aviation chief said. Interjet, the first low-cost carrier to begin service fromthe Mexico City area, introduced fares this month that beatpremium bus travel. Almost 40 million people annually travel 400kilometers or more on buses equipped with televisions, airconditioning, and washrooms between cities served by airports,said Gilberto Lopez Meyer, Mexico's civil aviation director. ``We can double the number of domestic air passengers ifhalf these people begin flying,'' Lopez Meyer said in aninterview in Mexico City on Dec. 20. The first discount fares introduced in Mexico areencouraging, he said. Mexico City-based Interjet, one of fivestartup projects, began flying four routes on Dec. 5 with pricesthat are as little as a quarter of those charged by the nation'slargest airlines, Mexicana and Aeromexico. They can be cheaper than the bus, too. Traveling to thebeach resort of Cancun from Mexico City on a luxury bus run byAutobuses ADO costs 1,284 pesos ($120) and takes up to 23.5hours. Interjet's fares to Cancun from the Toluca airport, 69kilometers from downtown Mexico City, start at 1,205 pesos,including taxes. The flight is two hours long. A round-trip ticket to Guadalaraja from Toluca can be ascheap as 1,144 pesos on Interjet, compared with 5,145 pesoscharged by Mexicana or Aeromexico. ``I hope these prices are here to stay,'' Lopez Meyer said.``If the discount fares are on average 50 percent cheaper thanthe legacy carriers, we'll have achieved our goal.'' Temporary Subsidies Avolar Lineas Aereas SA began flying from the northern cityof Tijuana to four towns in September. Another two carriersprobably will start operations by June, Lopez Meyer said. One issponsored by Mexican billionaires Carlos Slim and EmilioAzcarraga and the other is backed by Brazil's Gol Lineas AereasInteligentes SA. Mexico is Latin America's second-largest aviation marketafter Brazil, with 20 million passengers a year. To help lower fares, the Mexican government is expandingairport capacity and giving the startup carriers temporarysubsidies on services such as fuel delivery that reduceoperating costs by about 10 percent, Lopez Meyer said.Passengers get 50 percent off on airport tax when flying fromsecondary airports. Competitor Reaction Interjet, owned by the son and grandson of former MexicanPresident Miguel Aleman, can break even in a year by maintainingthe current fare structure so long as the planes fly 65 percentfull, Chief Executive Officer Jose Luis Garza said in aninterview in Mexico City. The carrier has a five-class faresystem with a 50-peso difference between them, he said. The Alemans spent $230 million to buy seven Airbus SAS'sA320 from insolvent Italian airline Volare Group SpA and putdown $60 million in equity capital to start Interjet, Garzasaid. Interjet placed firm orders for 10 new Airbus planes andhas options to buy another 10, which would demand investments of$1.2 billion, he said. Interjet has no debt. Reacting to increasing competition, Mexicana and Aeromexicointroduced promotional fares and expanded service to Toluca.Government-owned Aeromexico began flying to the industrial cityof Monterrey from Toluca on Dec. 14 for as little as 822 pesos.At Interjet, fares to Monterrey start at 745 pesos. ``I can make money at this price, but they can't,'' saidGarza, who served as chief financial officer of Aeromexicobetween 1988 and 1990. Airline Sale Discount airlines reduce investor interest in theprivatization auction for Mexicana and Aeromexico last month.The government sold just Mexicana and rejected bids forAeromexico, saying they were too low. Grupo Posadas SA, Mexico'slargest hotel chain, bought Mexicana for $165.5 million plusassumption of $1.27 billion in debt. Shares of Cintra SA, the holding company for Mexicana andAeromexico, tumbled 20 percent the day after the bids wereplaced Nov. 21 and another 18 percent in the three daysfollowing the auction results were announced Nov. 30. Thegovernment plans to put Aeromexico on the block again in early2006. ``We couldn't artificially halt the entry of the low-costairlines because of the sale of Cintra,'' Lopez Meyer said. ``Ifthere's interest in new carriers and all the requirements aremet, we have to issue a license by law.'' To contact the reporter on this story:Adriana Arai at aarai1@bloomberg.net Last Updated: December 23, 2005 13:57 EST ©2005 Bloomberg L.P. All rights reserved. Terms of Service Privacy Policy Trademarks Site Map Help Feedback About Bloomberg Log In/Register Advertising ??????

Vacation Rentals: Location Search

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South America Travel

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Family Vacation Packages: Inclusive

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Travel Insurance UK, Cheap

Travel Insurance Online : low cost, comprehensive travel insurance for all Authorised and regulated by the FSA. Registered number 306205. Travel-insurance-online.com is part of Jade Stanley Limited which is regulated and authorised by the Financial Services Authority.Our policies are underwritten by AXA Insurance UK plc who are authorised and regulated by the Financial Services Authority. (Registered Office) 107 Cheapside, London, EC2V 6DU. Registration England No 78950 Travel Insurance UK, Cheap Holiday Insurance, Backpackers Insurance andAnnual Travel Insurance for UK Residents Only U.S Residents Click Here Travel Insurance Calculator Where are you travelling? UK and Channel Islands Europe Worldwide ex. North America and Caribbean Worldwide inc. North America and Caribbean When are you travelling? 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 "; January February March April May June July August September October November December 2005 2006 Return Date? 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 January February March April May June July August September October November December 2005 2006 How many individuals? 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Party Type? Individual(s) Couple Family Single Parent Family Winter Sports Cover Required? View our Frequently Asked Questions Here Maximum Age Limit: 65 Or view our many policies below... For your Cover Details, Quote and Purchase, please click on the name of a Policy. Or, call us on 0870 755 6101 Mon-Fri 9am-6pm, Order On-Line Single Trip Emergency Medical and Other Expenses cover up to £5,000,000 Personal Liability covered up to £2,000,000 24 hour Emergency Medical Assistance 3 Travel Insurance Policies to choose from View all Policy and Cover details online Single and Family Cover available Young Traveler and Longstay -- Young Traveler and Longstay Ideal for Students taking a gap year Competitive rates Peace of Mind while you are away 24 hour Emergency Medical Assistance Holiday Abandonment covered up to £1,000 Loss of Passport and Travel Documents covered View all Policy and Cover details online Annual Travel Insurance Europe from £26.62 / Worldwide from £39.50 Options of 17-45 days of Skiing and Snowboarding 24 hour Emergency Medical Assistance Covers unlimited trips, chose durations 31, 45 or 60 days Easy to arrange and easy to renew each year View Sports and Hazardous Activity cover for this policy Click here for cover on Hazardous Activity Categories US Residents Become an Affiliate: Earn commission by becoming an affiliate Canadian Residents Irish Residents Australian Residents Other Non UK Residents Jade Stanley Ltd 10 - 11 Lower John Street, London, W1F 9EB - Tel: 0870 755 6101 info@Travel-Insurance-Online.com Insurers - Press - Travel Tips - Medical Conditions - E111/EHIC - Vaccinations - Flights - Weather - Affiliates - About Us - Annual Travel Insurance - Family Travel Insurance - Laptop Insurance - FAQ - Links Related Websites UK Travel Insurance - Holiday Insurance - Cheap Holiday Insurance - Ski Insurance - Travel Insurance - Annual Travel Insurance - Backpackers Insurance - Canadian Insurance - U.S Insurance - Ski Holiday Insurance - Cheap Ski Insurance - Car Hire - Compass Travel Online - Airport Car Parking - Airport Hotels - - Airport Transfers - Snowboard-Insurance - Ferries - Hotels - Snowsafe