Airlines May Suffer From Increasing Danger in Mexico

Most Americans have now heard about the increasing drug violence occurring along the Mexican border towns. While it hasn't spread to resort towns, the negative publicity is already starting to hurt Mexican tourism. Airlines are bound to suffer from this, and some will suffer more than others.

The change in safety across the border has been remarkable. When I was younger, I certainly never hesitated to head into Tijuana for the night. Now I wouldn't cross the border during broad daylight. And Juarez, across from El Paso, is now counting its murder rate on a daily basis. Since Mexico moved the military into town, the rate has dropped, but much of the damage has been done. Many people are afraid to go to Mexico.

The resort areas closer to the border will suffer most. Places like Rosarito Beach and Rocky Point will probably be hit hardest. San Felipe has already seen a Spring Break tour operator pull its sun-seeking kids and put them in Palm Springs instead.

But now I have friends with plans to go to Cancun asking if it's safe. And Cancun is not even mentioning it's in Mexico anymore. The first time there's a high-profile killing in one of those towns, I imagine we'll see massive changes in plans. So which airlines are going to suffer most from this? American and Continental both have large operations to Mexico from their Texas hubs, but those are more business-focused. The airline I'm watching is Alaska.

Alaska has a very large operation in Mexico and it's nearly all to resort towns along the coast. A great deal of weakness in Mexico will have major implications for the airline, probably more than for anyone else based in the US. I'm sure the folks up in Seattle will continue to watch this one very closely.