New Airline Mexicana Ditches Boeing for Faster Launch, Switches to Embraer

In February, Mexicana de Aviación, a revived Mexican state-owned airliner, announced the order of ten Embraer jets slated for a May 2025 delivery. The airline will purchase ten of the Brazilian-manufactured jets for an estimated $450 million at a unit price of $45 million. This estimate suggests that the planes will be E175 jets, with configuration estimates between 70 and 90 passengers. 

The switch to Embraer is unexpected, as initial partnerships were confirmed with Boeing, indicating the purchase of some 737s. However, initial delivery estimates of 2028 seemed to terminate the deal.

Mexicana de Aviación (“Mexicana”) has been ambitious since its return. The state-owned airline is the oldest airliner in Mexico, founded in 1920. However, poor management and a lack of investment saw the company cease operations in 2010. In early 2023, in an effort spearheaded by Mexican president Andrés Manuel López Obrador, the Mexican government purchased the airline for $42 million. The investment was meant to create a military-run commercial airline and introduce a new competitor to the existing airlines Volaris and AeroMéxico.

In December 2023, Mexicana launched its inaugural flight between Felipe Ángeles International Airport (NLU) and Tulum International Airport (TQO), as the TQO opened in the same month. Domestic tourism has stagnated in Mexico, and part of the Obrador administration’s investment was to stimulate a newfound domestic travel industry. 

In a period when foreign airlines are entering Latin America consistently, the presence of a domestic, low-price alternative is unique. This comes after a 2022 call by the president to reverse a Mexican law prohibiting the use of foreign airliners to run full domestic routes in Mexico. Mexicana fares are listed at an estimated 20% below traditional market prices for their flights.

One of the hopes of purchasing the jets is to grow Mexicana’s presence in the domestic market as a state-owned enterprise and limit private business investment. By the government ownership of Mexicana, all investment is aimed to keep funds within Mexico. The country’s largest airliner, Aeroméxico, is owned by Citigroup and has a Delta Air Lines partnership, both US-owned companies. 

The Obrador administration has been pushing to keep supply chain and tourism initiatives, such as the development of a new domestic train system, under state surveillance. However, both acts have been met with mixed results within the Mexican population. With the 2024 presidential election, Obrador will have to rely on the success of the new airline to overshadow other economic shortcomings in any reelection hopes.