The Good and the Bad of Mexico's Airline Market

Issue Overview

Time to try again. Selling TAP Air Portugal is hardly new and novel for the Portuguese government. It once sold a stake to the old Swissair. It more recently sold a stake to a group led by JetBlue and Azul founder David Neeleman. But the airline was re-nationalized again during Covid, and now it’s time to find a new buyer. Will it be one of Europe’s Big Three?

Europe’s TUI gave an update on how demand is trending as the offpeak winter approaches. The bottom line: It’s trending well, judging from bookings. Both volume and prices are up.

In the U.S., as third-quarter earnings season approaches, airlines are still contemplating the significance of those dreadful investor updates issued by Spirit and Frontier. Outliers? Or omens of trouble? In the meantime, airlines are bracing for a federal government shutdown that could — among other distasteful effects — disrupt efforts to address the debilitating air traffic controller shortage. A prolonged shutdown would likely affect the FAA’s work on certifying Boeing’s 737-7 and -10 (Southwest, for one, is waiting impatiently for its -7s). Also keep in mind that the federal government is a very large buyer of airline seats (Southwest once said the federal government was its single biggest customer).

In other news, Delta announced several new transatlantic routes for next summer, mostly from New York JFK. Mexico is happily off America’s aviation safety blacklist. And David Neeleman, who no longer runs TAP Air Portugal, is offering some new routes at his U.S. airline Breeze. Neeleman, incidentally, will be among the speakers at this week’s Skift Global Forum in New York.