31 March 2006

Nothing stingy about low-cost airline

Story by : David Agren

The airport departure lounge in Toluca featured few amenities, the plane arrived in Guadalajara a little late, and a large spot made viewing one of the small in-flight entertainment screens a pain, but virtually everything else about Interjet Flight 218 went off without a hitch. And for just 600 pesos one-way, who could complain.

A flock of discount carriers, led by Interjet, took off late last year, driving down prices on some of Mexico's most heavily traveled air routes. And although inexpensive, the new airlines offer a level service comparable to their domestic counterparts – and head and shoulders above any U.S. or Canadian carrier.

The fares on the new discount carriers compare favorably to buying a seat on one of Mexico's long-distance bus companies or paying expensive highways tolls on the nation's autopistas. An ETN one-way bus ticket between Guadalajara and Mexico City costs 570 pesos; the journey lasts seven hours.

An Interjet ad reads: "Give yourself the luxury of paying less." It humbly omits mentioning the additional luxuries of flying Interjet. The airline shows in-flight entertainment, hires cheerful and helpful staff, flies modern Airbus A-320 jets and even serves complimentary beverages, including the alcoholic kind that carriers north of the border charge five dollars for. Additionally, it sells tickets via the Internet, allows customers to choose their seats and even permits last-minute itinerary changes for as little as 100 pesos.

Prior to Interjet's arrival, Mexicana and AeroMexico, which were until recently majority-owned by the same government holding company, effectively carved up the map and code shared on many routes. The competition prompted recent action from the incumbent airlines: fares between Guadalajara and Mexico City now go for as low as 999 pesos on Mexicana and AeroMexico.

Somewhat ironically, a family tied to Mexico's old guard and several titans of industry, who profited handsomely from monopoly businesses, helped bust up the old system of genteel competition. Miguel Aleman, son of a former Mexican president, founded Interjet – perhaps an appropriate line of business, considering his family's infamous role in Mexican aviation. Former president Miguel Aleman Valdes allegedly enriched himself in the 1950s by purchasing vast tracks of land in Acapulco and then having an airport built in the burgeoning resort. Carlos Slim, the world's third-richest man, and billionaire Televisa owner Emilio Azcarraga Jean milked lucrative monopoly cash cows for years, before founding Volaris, another discount carrier.

About the only real inconvenience in using new airlines: the upstarts almost exclusively use Toluca, State of Mexico as a base, meaning travelers to Mexico's capital must bus from the airport to the big city and tolerate flying from a somewhat under-developed airport. (Click, a subsidiary of Mexicana flies from both the Toluca and Mexico City airports.)

Due to congestion at Benito Juarez International Airport in Mexico City, the discount carriers base themselves in Toluca, 70 kilometers west of Mexico City. The federal government had planned to build a new airport east of the capital in Texcoco earlier this decade, but machete-wielding campesinos (peasant farmers) refused to be relocated, forcing all new airlines to use Toluca. Although a popular base for cargo flights and private jets, passenger service only recently became popular in Toluca.

The sudden surge in popularity shows. The Toluca airport still lacks many things; it only has only a few gates and no jetways for boarding flights. Set at an altitude of more than 8,000 feet, passengers can freeze while waiting for early morning flights in the winter and spring. And forget sipping a hot coffee (unless its purchased elsewhere); no kiosks operate in the Interjet and Volaris check-in areas.

On the plus side, catching a flight in Toluca requires little walking; passengers can be dropped off less than 25 meters from the check-in counter. Security, while visible, is decidedly laid back; no announcements about destroying unattended bags are read. Some motorists park their cars right next to the doors. Upon receiving their boarding passes, passengers proceed to the lone security checkpoint, which overlooks the glassed-in departure lounge. A kiosk inside hawks the usual assortment of overpriced gum, magazines and drinks, although complimentary copies of Milenio (the Mexico City version of Publico) litter the area.

Going to Toluca may seem inconvenient – and expensive, as a toll-booth near Santa Fe dings motorists with an 80-peso fee – but fortunately, the Caminante bus line motors between the airport and Mexico City's Observatorio bus station every hour for 80 pesos. A typical trip takes about an hour, although traffic conditions – always unpredictable in the Mexico City area – determine the arrival time. The buses carry on to the Centro Historico from the bus station. Volaris, a discount carrier that started Guadalajara-Toluca service on March 24, offers a free shuttle to the upscale Santa Fe district on the Federal District's western edge.

A journey from Mexico City to Toluca might fray nerves, but once aboard the airplane, the flight is anything but stressful. Passengers on Flight 218 luxuriated in comfortable leather seats – although the headrests could have used additional cushioning – that afforded plenty of legroom. The flight attendants poured complimentary shots of domestic liquor and supplied entire cans of pop and juice for mixing. In fact, the beverage cart rolled throughout the entire flight. Instead of showing an in-flight movie – the 55-minute jaunt was too brief – Interjet broadcast a brief news and entertainment report from, appropriately enough, TV Azteca. (Televisa owner Emilio Azcarraga Jean partially owns Volaris.)

After Flight 218 touched down in Guadalajara, the only real unpleasantness surfaced: the taxi monopoly was waiting to extract a minimum 150-peso fare for a ride home.

23 March 2006

Aguascalientes' experience provides insight into polemic ‘public or private’ water debate


Story by : David Agren

The faucets in Hector Carrera's small home in Aguascalientes used to run dry every morning around 10 a.m. Nothing but air would gush out. The service would usually return after 6 p.m. Nowadays water flows on demand, thanks to an upgrade in the municipal waterworks brought about by a private company.

"It's expensive, but it's a good service," he explained, echoing a common complaint about the price, but also expressing appreciation for the convenience. "The service fails less often."

Aguascalientes, a fast-growing industrial city of one million people, lacked an efficient waterworks 13 years ago. Located on a semi-arid plateau 250 kilometers northeast of Guadalajara, Aguascalientes also faced long-term water supply problems as an expanding population and new factories – most prominently a giant Nissan plant, where all of the manufacturer's Sentras are made – put increasing pressure on the aquifer the municipality draws water from.

To arrest its problem, the municipality unveiled a polemic solution in 1993: It asked a private company to provide water and sewage services. The then Institutional Revolutionary Party (PRI) municipal government granted a 20-year concession (since expanded to 30 years) to Proactiva Medio Ambiente CAASA, a French, Spanish and Mexican consortium, which operates under the name Concesionaria de Agua de Aguascalientes, S.A. (CAASA).

Critics called the arrangement privatization, but CAASA's management disagrees.

"It's not privatization, it's a partnership." said Marco Antonio Ponce, planning manager for CAASA.

Private-sector water management, a practice panned by anti-globalization groups and a host of critics gathering at this week's World Water Forum in Mexico City, has improved efficiency, fixed leaky pipes and increased conservation in Aguascalientes, but the gains have come at a cost, which customers see reflected in their monthly water bills – some of the most expensive in the country.

Under the terms of the concession granted in Aguascalientes, the municipality still owns the waterworks, but CAASA manages the day-to-day operations, billing and long-term planning.

Prior to CAASA's arrival, the Aguascalientes municipal government ran a fairly typical public waterworks – by Mexican standards. The system lost more than 60 percent of the water it drew from a rapidly shrinking aquifer during delivery – mainly due to leaky pipes. Many water bills went unpaid. Theft via clandestine connections was rife. Approximately 30 percent of city residents lacked service. Less than half of all neighborhoods received 24-hour water service. The government subsidized water delivery and CAASA's predecessor charged a rate that failed to cover the cost of providing the service. The water utility was also deeply in debt.

Since assuming responsibility for the waterworks - and its debt - CAASA has extended the system's reach; 99 percent of Aguas-calientes residences now receive water, including many homes built without proper permits. CAASA improved sewer service; it treats 98 percent of all wastewater (only 20 percent of sewage in Mexico is treated, according to the National Water Commission). Per-capita water consumption dropped by 20 percent. The utility also reduced the periods certain neighborhoods go without water.

Most controversially, it increased the price, forcing users to pay for the actual cost of the water. It also began demanding payment from delinquent customers.

CAASA measures its success in terms of efficiency; it draws less water from the waterworks' 181 wells than its predecessor, but provides service to nearly twice as many customers. CAASA's concession allows it to extract 110 million cubic meters of water annually. Due to efficiency improvements, though, the company won't surpass that figure until at least 2033.

"There are more users (but) less water is being used ... and the service is always improving," said Julian Lili Bravo, CAASA's commercial manager.

He took issue with critics, who advance the notion, "Because less water is drawn [from underground wells] the user has less water available in his home.

"The opposite is true, it's part of the efficiency that we're looking for in Aguascalientes."

The price increase brought the biggest objections from Aguascalientes residents. They pay 97 pesos for 10 cubic meters of water and 6 pesos for each additional cubic meter. (Rural customers receive 30 cubic meters of water for the same price). The rate climbs every few months to keep pace with inflation. In comparison, the average Mexican household pays 5 pesos per cubic meter – a price that includes sewage and drainage.

Some residents initially balked at the increase; previously they paid a low fixed rate, allowing them almost unlimited water. The rate hike also coincided with Mexico's 1994 peso devaluation, a period of extreme financial hardship. CAASA's involvement in Aguascalientes' waterworks became a political issue in 1995, with The National Action Party (PAN) promising to nix the deal and lower water bills.

"Logically, the public began to resent the price increase," said Otto Granados Roldan, the PRI governor Aguascalientes from 1992-1998.

According to Granados, the PAN, which won the municipal election in 1995, attempted to carry out its campaign promises, but ran into legal difficulties. Ultimately the PAN administration accepted the deal and later extended the concession.

For CAASA, changing attitudes towards water delivery proved as difficult as fixing infrastructure and implementing a price increase.

"In the beginning, we were speaking of a paternalistic culture, which said the government will cover everything," Lili said.

Improving efficiency required updating the padron (customer list). Prior to 1993, 10 percent of the water was simply stolen. It also required a change in the state law, allowing CAASA to suspend service to customers with overdue water bills. (SIAPA, Guadalajara's waterworks, is forbidden from cutting service to residential customers; only 60 percent of its accounts are up to date). Nowadays, only four percent of CAASA's water is stolen and more than 90 percent of its bills get paid.

"If the user doesn't pay in Guadalajara, nothing happens," Lili explained. "Here in Aguascalientes, if you don't pay, the service is suspended."

With time, the protests died down, but when asked, many customers still grumble about the price and the intermittent service in some parts of town.

Victor Ramos, an Aguascalienetes cab driver who lives on the city's southern outskirts, endures regular service disruptions, which he said last longer than promised.

"Sometimes there's water, but often there's no water for days at a time," he said, adding that he pays around 120 pesos per month. "We often go to a family member's place to bathe."

According to CAASA, water shortages, which still occur in approximately 20 percent of all Aguascalientes homes, have become less frequent and by 2009, the practice should end. (Many residents own cisterns to supply water during outages).
Jose Luis Hurtado, a restaurant manager, also complained about the price.

"For Mexico's income level, (water prices) here are expensive," he said, but he also recognized the improved coverage and service since 1993. "Now the neighborhoods on the outskirts of town have water."

CAASA officials acknowledge their water rate is "one of the highest in the country," but, according to Ponce, 4.6 percent of revenues are set aside for users – mainly seniors – who are unable to pay their water bills.

"The tariff," he added, "Covers everything."

"Everything" in Aguas-calientes includes water, sewage and drainage. Many Mexican municipalities charge separately for the three services and sometimes include sewage and drainage fees in property taxes. Government subsidies keep the costs low, although, Ponce pointed out that users still end up footing the bill.

"At the end of the day, people either pay through their water bill or their property taxes," he explained.

Instead of relying on capricious government support, CAASA reinvests earnings into its infrastructure – something rare in Mexico, where water projects depend almost exclusively on federal and state grants.

"There are no subsidies here," Ponce said, adding that Aguascalientes still receives federal infrastructure grants like other municipalities, but doesn't exclusively depend on the money.

Other Mexican municipalities with inefficient utilities, including Saltillo and Cancun, have also turned to private water providers over the past decade. The concession agreements in each municipality differ; fees paid by the luxury hotels in Cancun largely subsidize residential water rates in the resort city. Complaints about rising water bills and a lack of accountability surfaced in Saltillo.

The Guadalajara-based Mexican Institute for Community Development objects to private-sector water participation. In an information kit on the subject, it contends that privatization leads to price increases, a reduction in water quality and job losses.

Although more expensive than before, the water CAASA delivers has won quality awards. Still, bottled water sales remain strong in Aguascalientes, something Ponce attributed to a lack of confidence in Mexican waterworks.

As for job losses, the change in management brought about layoffs. CAASA presently employs 602 people, a smaller number than when its concession began. In some instances, automation made jobs redundant. Additionally, superfluous support positions were eliminated, including chauffeurs.

"At the other water companies, all of the directors and sub-directors have drivers," Ponce pointed out.

The public versus private management topic promises to dominate this week's World Water Forum, but Ponce downplayed the issue's importance to the general public, saying, "People don't really care whether or not the service is public or private so long as they receive good service."

09 March 2006

EduCanada takes aim at Mexican students

El Universal
March 04, 2006

Isabel Sandoval, 24, wants to learn English in a foreign country.

Ten years ago, she probably would have traveled to the United States, where the vast majority of Mexicans, wishing to pursue a foreign education, used to study English.

Instead, she´s looking further abroad, following the recommendations of her brother and several friends, who enrolled in English courses at Canadian schools.

"If you want to learn English, you go to Canada or England," the Zacatecas native commented, adding that neither she, nor any of her friends, ever considered heading to the United States.

"(People) might go to the United States to pursue a master´s degree, but not to learn a language."


Over the past decade, a growing number of Mexicans have passed on studying in the United States, instead opting for Canada, which has been actively courting foreign students by simplifying visa requirements and offering incentives for graduates to stay in the country after completing their programs.

Approximately 10,000 students enroll each year in Canadian colleges, universities, high schools and language schools, according to the Canadian Education Centre Network (CEC Network).

Most sign up for short-term language training; the average sojourn lasts 3.4 months.


Along with positive attitudes toward Canada and the ease of obtaining a visa, which isn´t necessary for programs lasting less than six months - an entry visa isn´t required either - lower prices and Canada´s relative proximity to Mexico also help lure students north.

"Canada is now the player in international education," said Miguel Ángel Tenorio, Guadalajara manager of the CEC Network, an organization that promotes Canadian education and the EduCanada fairs.

"People generally try to avoid the United States."

He listed two reasons: "The visa issue and the perception of Mexicans in the United States isn´t always the best."

Last week at the EduCanada fairs in Mexico City, Monterrey and Guadalajara, more than 60 Canadian universities, colleges, school districts and language schools pitched Mexican students on coming north, playing up Canada´s reputation for friendliness, safety, high standard of living and education quality.


EduCanada began rather quietly in 1997.

According to Tenorio, Canadian education institutions initially encountered two key objections from prospective students: distance and the weather.

"When we started EduCanada, people thought of Canada as very distant and very cold," Tenorio recalled.

Unable to change the weather, CEC Network officials promoted Canada´s proximity - Toronto is only a four-and-a-half-hour flight from Mexico City.

As for the weather, the prospect of experiencing a cold Canadian winter actually appeals to some potential students, including Sandoval.

"I want to see snow so deep that it buries the house," she joked.

Intrigue and a lack of familiarity also work in Canada´s favor.

"I already know the United States," Sandoval said, adding she wasn´t especially fond of the lifestyle there, having visited relatives north of the border on numerous occasions.

"I´d like to discover Canada."


After nearly a decade of steady - and highly-effective - promotional activity by Canadian education officials, Tenorio described the market in Mexico´s three largest cities as "mature."

Approximately 10,000 people attended EduCanada´s three fairs last week, a decrease from the 14,264 who attended the 2005 events. Fewer schools participated in 2006 as well.

Tenorio attributed the decreases to familiarity with Canadian education; many students now go based on word-of-mouth advertising. Some previous EduCanada exhibitors now have sizable alumni populations in Mexico.

"The market is very reference oriented," Tenorio said.

The Canadian dollar has also climbed over the past three years, increasing the attractiveness of other countries, most notably Australia, which has stepped up its recruiting in Latin America.

"Australia . has better prices and offers the possibility of working," Tenorio explained.

He added, though, that Canadian schools pioneered the market, which other countries are now exploiting.


Even with a surge in the Canadian dollar, tuition fees in Canadian high schools and post secondary institutions still compare favorably with their Mexican equivalents.

"Tuition [in Canada] is more or less the same price," Tenorio said.

Some longtime exhibitors also noticed the decrease in traffic at last month´s fairs, but still considered participating in EduCanada a fruitful endeavor.

"It´s still absolutely worthwhile coming here," said Janet Cacchioni, external promotions manager for the Vancouver Film School.

"Mexicans are some of the hardest working, most creative students in the world."


To maintain growth, the CEC Network has started hosting fairs outside of Mexico´s three largest cities. Its recent fair in León, Guanajuato, attracted more than 3,000 people. Future fairs are planned for regional centers like Culiacán, Mérida and Morelia.

"Canada is the only country interested in covering the whole of Mexico," Tenorio said.

Jody Rosen Spearing, Guadalajara director for Enlaces Mexico-Canada S.C., an agency that promotes international education, foresees Canada remaining the top choice for many Mexican students, even though competition is increasing and many of his clients are now inquiring about traveling to more exotic locales.

"People want diversity, but Canada will always be one of the top countries," he said, explaining that the desire for English-language training will keep the market strong.

"It´s not based on interest, it´s based on necessity."

05 March 2006

AMLO's yellow army turns out in force

Photograph by : B. Miller

Presidential aspirant Andres Manuel Lopez Obrador drew 7,000 supporters to a rally held in Guadalajara's Plaza de la Liberacion last week.

Story by : David Agren

Andres Manuel Lopez Obrador (AMLO) supporters in Guadalajara showed some bravado last Thursday, brandishing T-shirts that proclaimed: "I don't turn yellow, yellow's my color," a reference to the sunny-yellow logo of the Democratic Revolutionary Party (PRD). The presidential frontrunner struck a bold tone in Guadalajara last Thursday, speaking forcefully - into a warped sound system - on the themes that have kept him atop every public-opinion poll since the campaign began; namely: ending poverty and discrimination, reworking "neoliberal" economic policies and increasing social priispending.

A consummate campaigner - AMLO's been on the hustings since resigning as Mexico City mayor in July 2005 - he tailored his message for a Jalisco audience, invoking the memory of state icons, including the recently deceased artist Juan Soriano, and explaining how many jaliscienses would benefit from the PRD proposals.

Topping the list of promises - he rattled off 35, covering virtually every theme imaginable - a nationwide payment scheme for the elderly, similar to the program he introduced while serving as mayor of Mexico City. Other politicians - from all parties - have adopted the theme too, putting similar planks in their campaign platforms.

"When we introduced it in Mexico City, President (Vicente) Fox called it 'populism,' " AMLO chortled.

He also promised more places for students in the Universidad de Guadalajara and healthcare for the 40 percent of Jalisco residents he said lack coverage. Somewhat vaguely, he pledged to ensure Guadalajara has an adequate supply of drinking water and that Lake Chapala stays healthy.

Once again, he promised to pull Mexico out of parts of NAFTA in order to protect corn and bean farmers, who he said "have confronted the neoliberal politics of the [Revolutionary Institutional Party] PRI and the [National Action Party] PAN.

The message predictably played well at the rally - even though Jalisco is often a PRD wasteland. Ignacio Orozco, an organizer for the Workers Party (PT), one of the two minor parties in AMLO's coalition (dubbed, "For the good of all"), predicted it would attract independent voters.

"We're searching for those voters that aren't involved with any political party," he explained.

AMLO leads some opinion polls by nearly 10 points, easily outpacing the PRD's normal popularity level. He attributed it to voter disappointment; Mexico's economy has stagnated and poverty is still rife. "The only thing that's changed in the last few years ... is the mentality of the community," he said.

Civic officials figured approximately 7,000 supporters attended the rally, blanketing the Plaza Liberacion in PRD yellow, spare a few adherents of the Convergencia Socialista (another small-party backing AMLO) clad in orange. Many showed off yellow T-shirts with a variety of slogans, including, "AMLO es mi gallo!" (Gallo is colloquial for go-to guy). Or in place of an official shirt, some came wearing Club America jerseys. Young perredistas (as PRD members are known) sported yellow bracelets: some had original Lance Armstrong bands, leftover from last year's craze; others wore similar ones with the slogan, "I support AMLO."

Besides delivering a nearly 60-minute speech, AMLO feted the local PRD candidates for municipal presidencies and governor. Eugenio Marin Hernandez, a lone protestor at the rally, holding a sign accusing the PAN, PRI and PRD of all being the same, rebuked the local candidates, saying, "(The PRD) is full of ex-priistas ... Their acts show they haven't changed."

Of the local PRD leadership, he commented, "They're always working towards the next election, not for the people."

Still, despite his disenchantment, he plans on voting for AMLO.

"He's the only hope."

From the Guadalajara Colony Reporter

04 March 2006

Getting sun on the Gulf Coast

I visited the Northern part of Veracruz state last Christmas and discovered Villa Rica, a little-known and maddeningly-difficult spot to find. It's not the most pristine place - Veracruz beaches are understandably not famous - but Villa Rica, with its nearby Totonac ruins and sprinkling of inns, makes a pleasant place to stop for a day.