Valley officials pin hopes on new AmWest Mexico route - East Valley Tribune: Business

Valley officials pin hopes on new AmWest Mexico route

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Posted: Saturday, October 18, 2003 5:48 am | Updated: 2:21 pm, Thu Oct 6, 2011.

America West Airlines will begin once-a-day service Monday to Monterrey, Mexico, the nation’s third largest city with enough industry that Valley economic officials hope to expand trade between the two markets.

The Tempe-based airline will offer nonstop service between Phoenix Sky Harbor International Airport and the city of about 1.5 million people. Only Mexico City and Guadalajara are larger than Monterrey.

On the inaugural flight, a Valley delegation will make the trip as part of a trade and protocol mission.

"I’ve always viewed Monterrey as the industrial center of Mexico," said Gilbert Jimenez, Arizona Department of Commerce director.

"It is the center of several of Mexico’s largest international conglomerates who are world-class in their capacities and capabilities in producing package meats, fibers, glass, cement, auto parts and steel."

Surrounding the city is a number of maquiladoras, or in-bond, assembly plants that specialize in automotive equipment, building products and other industry, said Jimenez, a former international banker who lived in Mexico City and did business in the country for 20 years.

The population of Monterrey and the surrounding area is 3.2 million, about the same size as the Valley, Jimenez said. And there are other similarities too.

"It has a strong influence and focus on the bio-sciences and expanding technology," he said, adding the city has a world-class university that already has alliances with Arizona State University.

David Cavazos, Phoenix assistant aviation director, said preliminary estimates show the economic impact of the flight will be $18 million to $20 million a year.

Officials hope to divert some of the trade that exists between Monterrey, which is two hours south of the border, and cities in Texas, California and Florida. American companies with operations in both countries have made airports in Dallas, Houston, Atlanta and Miami, Fla., their hubs, Cavazos said. For example, there are eight flights a day between Houston and Monterrey, he said.

But there is a need to travel between Monterrey and western cities, including Los Angeles, Phoenix, Seattle, Portland, Ore. and Vancouver, B.C., he said.

"There’s really no way to connect using a fast, direct line," Cavazos said. "So this is where Phoenix comes into play. Now people can go direct to Phoenix and for a little bit over $300, they can get a round-trip ticket, and then they can connect to all that other stuff. We believe the first thing you do is change people’s perception and if everybody in Monterrey is used to using medical facilities in Houston or used to shopping in Miami, . . . they’ve never really seen what Phoenix has to offer. If they have a direct flight, they’ll start coming here, start enjoying us and start using the Mayo Clinic and start building trade relationships with one of the fastest growing cities in the nation."

Rick Weddle, president of the Greater Phoenix Economic Council, said Arizona already has a good trade relationship with Mexico. Exports are about $3 billion, and imports are roughly $4 billion.

"It is not what you normally think of when we think of the Mexican economy," Weddle said. "It’s a very commercial, corporate and industrial area, almost European in its feel. Some of the largest companies in market segments are there."

While trade opportunities exist, getting to Monterrey by road or transit is difficult and can take a day each way from the border, Weddle said, That’s why commercial activity has mostly been between Monterrey and San Antonio and Austin, Texas, he said.

"The America West flight will open that up and change that," Weddle said, adding he and others took a trip to Monterrey in August and talked to a number of companies that have interests in California.

"But they find California an onerous place to do business," he said.

There are already some local ties to Monterrey, Jimenez said.

Cemex, the third largest cement company is world, has operations near Tucson, he said. Gruma, the largest corn tortilla and corn product producer in Latin America, has a flour mill in Tempe. Phoenixbased Swift Transportation has its Mexican headquarters in Monterrey and Honeywell has operations in both places as well. Monterrey also boasts General Electric and several auto plants.

Weddle said its too early to tell how much economic impact the new air route will bring.

"The impact would be significant, but you’re going to have to walk before you run," he said. "What we hope to do is build some relationships with their business leaders, get them to come up here and visit and shop and become familiar, and there will be opportunities to talk about production facilities later on."

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