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Tuesday October 7, 2008
Reuters
Mexican Airlines Cancel Routes On Rising Fuel Costs

Two Mexican airlines have canceled 11 routes to low-profit destinations this year, due to rising fuel costs.

Aeromexico, one of the two leading airlines in the country, has canceled eight flights, including to three US cities -- Los Angeles, Phoenix, and Austin, Texas -- to offset high fuel prices that are adversely affecting the air industry across the globe.

"After a market investigation, the routes... have been suspended," Aeromexico said.

Aviacsa, which only operates one international flight, to Las Vegas, has halted service to three domestic destinations.

"We are trying to be more productive," Manuel Cung, Aviacsa's director of planning said. "The impact of the fuel is so strong for all the airlines that not one will be able to compensate for the rise (in prices) that we have had to date."

Mexican airlines are already adding a modest fuel charge to ticket prices but are holding off passing sharp increases along to customers, for fear that a broad increase will scare them away.

And unlike many US peers, most Mexican airlines still allow two large pieces of luggage per passenger and offer free beverages and food on flights over five hours.

The Mexican airline industry was just starting to bloom with a surge of low-cost carriers when it was hit by surging fuel prices last year.

Aviacsa's Cung said that 45 percent of the company's operating costs now stem from fuel alone, compared with 35 percent a year ago.

(Reuters)

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