Airlines in Mexico Emerging Consumption Needs Analysis

Impact of Behavior Changes

Based on the "Current Behavior Changes Analysis" and the "Value Chain Analysis" reports, ongoing shifts in customer behavior are significantly influencing the Mexican airline value chain. The increasing price sensitivity and preference for low fares among B2C passengers directly intensify price competition within Airline Operations, putting pressure on profitability, particularly for full-service carriers like Aeroméxico, while reinforcing the model of ULCCs such as Volaris and Viva Aerobus. This price focus also creates pressure on airlines to negotiate lower fees with Infrastructure (Airports), potentially impacting the revenue streams of airport operators (GAP, ASUR, OMA, GACM) who rely on aeronautical charges.

The growing willingness of passengers to purchase ancillary services profoundly impacts Airline Operations by making ancillary revenue a critical component of profitability, especially for ULCCs. [Driving growth with airline ancillaries - Mastercard Data & Services], [Strategies for airlines to improve ancillary sales - Cognizant] This behavior also influences Distribution & Sales, as airlines increasingly favor direct digital channels (websites, apps) where they have greater control over the display and sale of ancillary products, potentially reducing reliance on indirect channels like GDSs and traditional travel agencies and altering commercial relationships within this step.

Increased adoption and preference for direct digital channels primarily affect the Distribution & Sales step. This trend strengthens airlines' direct relationships with customers, potentially decreasing transaction costs associated with intermediaries. It necessitates continuous investment by airlines in robust and user-friendly digital platforms, impacting their IT strategies and expenditures. This also streamlines processes within Airline Operations, particularly in booking and customer service.

The continued strong demand for air travel in Mexico, evidenced by record passenger numbers in 2024, places significant pressure on Infrastructure, especially airport capacity (AICM) and Air Traffic Control (SENEAM). [Pasaje aéreo batió récord en México durante 2024 - Bien Informado] This strain leads to congestion and delays, impacting the operational efficiency of Airline Operations and creating friction in the relationships between airlines and infrastructure providers. High demand also increases the need for jet fuel from Fuel Supply and drives demand in Aircraft & Fleet Management for new aircraft acquisitions (through purchase or leasing) and increased MRO services due to higher fleet utilization.

While the B2B cargo segment's specific behavioral changes were not detailed, the overall demand for air travel suggests continued need for reliable and efficient cargo services, impacting the Cargo Airlines segment and associated Support Services like ground handling.

Emerging Consumption Needs

Arising from these behavior changes and their impacts on the value chain, several key consumption needs are emerging or becoming more prominent among airline customers in Mexico:

1. Need for Affordability and Value: Driven by increasing price sensitivity, customers prioritize obtaining the lowest possible fare. This goes beyond just the base price and extends to the perceived value of the overall travel cost, including optional services.
2. Need for Service Unbundling and Customization: The willingness to pay for ancillaries indicates a desire for a personalized travel experience where customers can choose and pay only for the services they require (e.g., specific seat, baggage allowance). This contrasts with traditional bundled offerings.
3. Need for Seamless Digital Experience: Increased preference for direct digital channels highlights the need for intuitive, reliable, and feature-rich websites and mobile applications for searching, booking, managing reservations, checking in, and accessing real-time flight information.
4. Need for Transparency in Pricing and Fees: As fares are unbundled and ancillary options proliferate, customers need clear and upfront information about all potential costs to make informed purchasing decisions.
5. Need for Reliable and On-Time Travel: Despite the focus on low fares, the continued strong demand underscores the fundamental need for dependable air transportation. Customers require airlines and the supporting infrastructure (airports, ATC) to operate efficiently and minimize delays, which is currently a significant challenge due to infrastructure bottlenecks.
6. Need for Accessibility to Information and Support: Regardless of the booking channel, customers need easy access to information and effective customer support for queries, changes, or issue resolution, especially when navigating potentially complex fare structures and ancillary options.
7. Potential Need for More Flexible Booking Options: While not explicitly detailed in the provided reports, the dynamic nature of travel in a recovering and growing market could suggest an emerging need for more flexible booking and change options, even within low-fare models, though this might conflict with core ULCC principles.

These emerging needs are shaping customer expectations and require players across the value chain, particularly airlines and airports, to adapt their offerings, technologies, and operational strategies to remain competitive and satisfy the evolving Mexican traveler.

Table of Potential Impact of these Needs

Emerging Consumption Need	Potential Impact on the Value Chain
Affordability and Value	Puts continued pressure on Airline Operations to manage costs aggressively and optimize revenue management. May influence Aircraft & Fleet Management decisions towards fuel-efficient aircraft and higher density configurations. Impacts negotiations in Infrastructure regarding airport fees.
Service Unbundling & Customization	Requires investment in IT and Distribution & Sales platforms to effectively market and sell ancillaries. Drives innovation in Airline Operations to offer a wider range of optional services. May differentiate ULCCs further from FSNCs.
Seamless Digital Experience	Necessitates significant investment in digital transformation across Airline Operations and Distribution & Sales. Could further shift market share towards airlines with strong direct channels. Impacts relationships with Indirect Sales intermediaries.
Transparency in Pricing and Fees	May require regulatory attention and changes in airline reporting and presentation of fares in Distribution & Sales. Builds customer trust in Airline Operations.
Reliable and On-Time Travel	Increases pressure on Infrastructure providers (Airports, SENEAM) to improve capacity and efficiency. Highlights the impact of Supply Chain Disruptions on Aircraft & Fleet Management and MRO on airline operations. Requires better coordination across the chain.
Accessibility to Info and Support	Requires investment in customer service systems and staffing within Airline Operations and Distribution & Sales. Essential for managing customer relationships, especially with complex fare structures.
More Flexible Booking Options	Could influence product development and fare rules in Airline Operations. May represent a potential new revenue stream or a competitive differentiator, potentially impacting Distribution & Sales systems.

References

• Air Distribution Simplified | NDC - CWT. https://www.cwt.com/ch-en/technologies/air-distribution-simplified
• Cheap Mexican airlines reviewed - Earth Vagabonds. https://earthvagabonds.com/cheap-mexican-airlines/
• Driving growth with airline ancillaries - Mastercard Data & Services. https://www.mastercard.com/news/perspectives/2023/driving-growth-with-airline-ancillaries/
• Pasaje aéreo batió récord en México durante 2024 - Bien Informado. https://bieninformado.com.mx/2024/02/08/pasaje-aereo-batio-record-en-mexico-durante-2024/
• Strategies for airlines to improve ancillary sales - Cognizant. https://www.cognizant.com/us/en/insights/strategies-for-airlines-to-improve-ancillary-sales