Mexican regional carrier TAR Aerolíneas has introduced 19 new domestic services over the past two months as it seeks out markets less affected by COVID-19.
The Querétaro-based airline, which operates a fleet of 11 Embraer ERJ145s, primarily offers schedule and charter flights, connecting midsize cities.
CCO Angel Garcia told Routes that the carrier’s business model and strategy remains the same as before the coronavirus crisis despite the depressed demand for travel. However, he warned that routes will be pulled from the schedule unless they are profitable.
“During COVID-19 we had to shrink our operations aggressively while reducing costs, to the extent that today we are operating seven aircraft,” he said.
“But we have focused on improving our fleet deployment and profitability, and we’re in much better financial health than some other carriers in Mexico.
“We’re basically concentrating on consistency, efficiency and connecting cities that currently have no services. Right now, about 73% of our capacity is deployed on these city pairs. We are therefore less exposed to competition.”
TAR Aerolíneas is currently operating 28 routes. About 50% of the airline’s capacity is aimed at business travel, with the remainder shared evenly between leisure and VFR traffic.
Although ongoing border closures and travel restrictions mean larger Mexican airlines like Viva Aerobus and Volaris are looking to domestic markets for growth, Garcia remains confident that TAR Aerolineas’ regional niche will win through.
“Most of the time, we share markets,” he said. “While the strategy of the low-cost carriers is based on volume, ours is based more towards convenience, which is yield driven.
“In the leisure market, it is a little more complicated—as the leisure traveler is consistently looking for low fares, rather than service or schedule—but we believe that there is a limited number of city-pairs that can justify services with more than 150 seats in an aircraft.”
Garcia expects that TAR Aerolíneas’ traffic will bounce back to pre-COVID-19 levels within one year, while it should take 18 months for the other market incumbents to recover.
Photo credit: TAR Aerolíneas