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Mexicana Airlines Still Waiting on a Contract With Fresno, Calif., Airport

Posted on: Friday, 8 July 2005, 12:00 CDT

Jul. 8--Mexicana Airlines' planned arrival in Fresno is stuck in a holding pattern.

Four months after reaching a tentative agreement, Mexicana Airlines and Fresno Yosemite International Airport officials have yet to sign a contract.

Airport officials continue to talk with the airline, but "we just haven't heard back from them in writing," said Russ Widmar, the city's director of aviation. "If you don't have it in writing, you don't have anything."

But, he added, "I have every reason to believe this is going to happen."

Plans call for the airline to run five flights a week from Fresno to Guadalajara, Mexico. Fresno Mayor Alan Autry has said service could begin in December.

But the longer the contract remains unsigned, the more that deadline is in jeopardy.

Once the final deal is approved, it could take between two months and a year to get service started, Widmar said.

One factor that could be causing the delay is the planned sale of the airline. The Mexican government has controlled Mexicana Airlines and AeroMexico since the mid-1990s, but recently decided to put the carriers up for sale.

"That's got their attention focused in other areas," Widmar said.

State airline holding company Cintra said the sale of its subsidiaries should not affect future route plans.

"The privatization of our subsidiaries is not going to affect either our operations or the operations growth," Cintra representative Luis Arias Osoyo said in an e-mail. He added that Fresno service is "planned to start operations [in] December 2005. However, this is just plan. Let's say that it is not official."

Cintra has started collecting feedback from potential buyers, who have until July 26 to express interest in buying up to 100 percent of the airlines, Dow Jones Newswires reported this week.

The Fresno deal could "stay in limbo" until the sale is made, said Pablo Spiller, an airline industry researcher and business professor at University of California at Berkeley. And he said the deal could take six months to complete.

Spiller does not expect the eventual new owners of Mexicana to renege on the Fresno agreement. That's because Fresno, with a large share of residents of Mexican origin, is an attractive market, he said.

The airport is looking for a two-year commitment from Mexicana, Widmar said. The deal is desirable because the airport will have to bring in federal inspection and customs agents who typically stay for at least two years.

"I don't want these people sitting around doing nothing if this thing doesn't pan out," Widmar said.

The planned entry of Mexicana into Fresno came with much debate. Farmers expressed concerns about pests entering the region and threatening the agriculture industry. They agreed to flights only if strict controls were in place, including a state-of-the-art inspection facility.

The city of Fresno has set aside $2.3 million for a federal customs inspection station and other costs. The proposal also calls for Mexicana to receive free rent and landing fees for two years. The inspection station will be built on the east side of the airport terminal and will connect to the ticket counters via a walkway, airport officials said this week.

A similar inspection facility is being built at Meadows Field Airport in Bakersfield, where officials say Mexicana is expected to begin service in late November.

A safety program approved this week by Kern County officials calls for all luggage from international flights to be inspected upon arrival. A county agricultural inspector will be on hand to direct the searches. Dogs also will sniff for produce.

Mexicana signed a letter of intent with the Bakersfield airport about a year ago, said Teresa Hitchcock, analysis and marketing manager for the airport. Like the Fresno airport, Meadows Field does not yet have a contract with Mexicana. Airport officials haven't started negotiating possible incentives, Hitchcock said.

But, despite the sale of Mexicana, Hitchcock expects the airline to meet the November deadline.

"I really don't think the sale is holding them up," she said.

Fresno airport officials, meanwhile, are busy preparing for the airline's arrival here. A new ticket counter sits empty. Black plastic covers a sign that could one day read Mexicana.

"Anything can happen," said Patti Miller, marketing and air service manager for the airport. "We simply have to prepare like everything is going to go forward as it needs to."

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To see more of The Fresno Bee, or to subscribe to the newspaper, go to http://www.fresnobee.com

Copyright (c) 2005, The Fresno Bee, Calif.

Distributed by Knight Ridder/Tribune Business News.

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DJ,

Source: The Fresno Bee

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