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Oil Report

Low-cost airline taps coveted Mexico City market

MEXICO CITY, July 31 (Reuters) - Low-cost Mexican airline Interjet has bought the rights to use Mexico City’s airport from a smaller struggling rival in a move to tap a highly profitable market even as fuel costs soar.

Interjet is one of several airlines that have emerged in the industry, which until recently was controlled by a couple of carriers -- Aeromexico and Mexicana -- dogged by financial troubles.

Interjet acquired landing and take-off slots and other operations in the busy Mexico City airport from Aero California, a small airline recently grounded by the government after it failed to pay some flight rights.

“We bought the rights from Aero California in the Mexico City airport, the slots, the counters ... but we did not enter into any (additional) deal with them,” Interjet President Miguel Aleman Magnani told local radio on Thursday.

The move will allow Interjet to compete directly with Aeromexico’s Connect regional carrier and Mexicana’s Click low- cost airline for customers using the capital’s airport.

Aleman Magnani expects Interjet to kick-off operations in the airport by mid-August but gave no details about the number of routes it will run.

Interjet will continue to fly from its hub in the central city of Toluca near the capital, he said.

According to the company’s website, Interjet has a fleet of 13 Airbus 320 aircraft and has a pending order for 20 more over an undetermined number of years.

Mexico’s airline sector, like everywhere else in the world, is struggling with high oil prices. The Mexican government is also refusing to subsidize jet fuel, which is making it harder for local carriers.

High fuel prices have forced industry heavyweight Aeromexico and smaller rival Aviacsa to cancel 11 routes this year. (Reporting by Cyntia Barrera Diaz; Editing by Andre Grenon)

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