Today we will look at what happened to Mexican low-cost carrier TAESA Lineas Aéreas and why it ceased operations after only 12 years. Headquartered at number 27 of hangar zone C at Mexico City International Airport (MEX), TAESA (Transportes Aéreos Ejecutivos S.A.) was established on April 27, 1988.
Owned by Carlos Hank González and legally represented by Alberto Abed Schekaiban, the idea was to create a private business jet charter airline. The business plan, however, soon changed, and a year later, it was decided to offer regularly scheduled low-cost flights to the general public.
The airline began operations with Boeing 727s
In late 1989 TAESA Lineas Aéreas received its first Boeing 727-100. More Boeing 727s were to follow, and in 1991, the Mexican carrier became the first of the country’s airlines to operate the Boeing 757-200. That same year, buoyed by exceptional growth, TAESA Lineas Aéreas added several Boeing 737-300s, more Boeing 757s, and a sole Boeing 767-300 to its growing fleet of aircraft.
During the early 1990s, TAESA Lineas Aéreas continued to grow, thanks partly to cargo contracts with DHL and Serpaprosa. The airline also leased several of its Boeing 737s to Indonesian national flag carrier Garuda Indonesia and won a contract to fly charters for Apple Vacations.
By 1992 TAESA Lineas Aéreas was flying from Mexico to Canada, Europe, and the United States. Confident in its future, TAESA Lineas Aéreas decided to compete with Aeroméxico and Mexicana by offering inexpensive domestic flights within Mexico.
In 1995, the airline launched what it called “crediTAESA”, a program that allowed its passengers to book tickets based on 12 monthly payments. The same year it also launched a frequent flyer program that offered customers one free ticket for every five flights flown. Innovatively TAESA Lineas Aéreas opened booths in supermarkets and shopping malls and, at one point, had cornered 27% of the Mexican marketplace.
In December 1994, disaster struck when the Mexican government suddenly devalued the peso against the dollar. With TAESA Lineas Aéreas debts all in dollars, the airline needed to downsize and cut costs to survive. The first thing they did was remove all the newer jets from their fleet and concentrate on flying older Boeing 727s.
The airline declared bankruptcy
The carrier came under scrutiny for maintenance issues following the crash of TAESA Flight 725. The aircraft was a 29-year-old DC-9 en route to Mexico City on November 9, 1999, from Tijuana when the plane crashed shortly after takeoff from Uruapan International Airport (UPN), where it had a stopover. All 18 passengers and crew died.
The Mexican government ordered an immediate investigation into the airline and found over 43 serious safety violations. Following the loss of its operator’s license and with debts of $400 million, the airline declared bankruptcy on February 21, 2000.
A last-minute deal to save the airline by Continental Airlines ultimately failed, and TAESA Lineas Aéreas ceased to be. Some airline employees found jobs with startup airline Líneas Aéreas Azteca. The Mexico City-based airline took over some of TAESA Lineas Aéreas’ old domestic routes but operated them using new Boeing 737-700 aircraft.