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November 15, 2008
Mexi-con-a?
GDL<->MEX, on Kayak
Shawn and I are planning a trip to our beloved Mexico City for Christmas, so we went to kayak to research the tickets. We found a great deal that was only $76 per ticket on Mexicana, round trip.
In Mexico, one does not have to pay up-front with a credit card to book tickets online. Although this is slowly changing, it used to be rare for Mexicans to use credit cards. People do not tend to write checks to pay bills here either. The postal service is not reliable enough for a system of bill payments where people send checks through the mail; everyone goes to various official payment centers to pay the gas bill, the light bill, the cable bill, etc. Luckily, most grocery stores and convenience stores are authorized payment centers for such things, so one does not usually have to travel too far.
With Mexicana, as with many airlines here, one can make the reservation, then pay within a certain period of time to keep the reservation. If the payment is not made in time, the seats are returned to general availability. Mexicana's web site does not even give one the option of paying when the tickets are booked. One has to book the tickets first, then go around through the home page again, using the confirmation number and last name of the ticketholder to look up the reservation and pay for it.
Mexicana accepts payments either online with a credit or debit card, or at any tienda Sanborns, and the allotted time for payment before the reservation expires is 24-hours. On the online form, it had a pull-down menu to indicate the country of origin for the card. As we were using a card from the United States, that is what we selcted, but on the following page, we received a notice that said that, since the card being used for payment was from a country that differed from the country indicated when buying the tickets, the price had to be adjusted. It then showed the adjusted price: USD $220 per ticket!
We called the customer service line and they more or less confirmed this; tickets that are indicated as being issued in Mexico have to be paid for with a Mexican source of payment, or one must pay a lot more. I would have thought that there should be no difference either way in our post-NAFTA world, but as we live here, we learn that the term "free trade" apparently does not mean what anyone would think it does.
I went back to the Mexicana web site directly to see the difference, as we had linked there from Kayak before. I had to go to Google and search for Mexicana to find the English pages of their web site; their main pages do not have any links to it.
I noticed a pull-down menu for "Select Country of Purchase" on the Mexicana form.
Buying Tickets on Mexicana
Yet this would seem to indicate that we, living in Mexico as we do, should select "Mexico." Given the previous trouble we had and what they told us over the phone, it means "Select Country of Issue of Credit Card Used for Payment." Maybe that is too much text to fit on their form.
I selected Mexico first, as I was going to compare the two. It should be noted that in Mexico, round trip tickets are always the sum of the separate trips. Therefore, prices shown are always by each leg of the journey. For space considerations and to keep things a little less confusing, I have only included images below for the results for the return trip, from Mexico City to Guadalajara. I indicate the price of the Guadalajara to Mexico city trip in the text, although as it turns out, the fares given were the same on both trips.
This was the price given to us for just the tickets, valued in Mexican pesos:
Buying a "Mexican" Ticket on Mexicana
Before I go into much more detail, I want to point out that for the sake of accuracy, I am going to use the Mexican Peso to US Dollar conversion ration that exists at the time of this writing (1 USD = 13.0600 MXN).
This is a much different ratio than the standard 10:1 ratio that gets used in many places as a rough guidline for converting pesos to dollars. It appears that the ticket prices as shown on the Mexicana web site are calculated using a 10:1 ratio, which may be the result of a built-in calculation that does not update with the real exchange rate. That in and of itself is a bit unfair, but I will give Mexicana a break and presume that this is just an artifact of their web site, not an intentional move to rip off American customers. Below when I declare what is at the time of this writing USD $17.23 to be close enough to USD $22, this difference between the old standard exchange rate of 10:1 and what it has been for the past month and a half, closer to 12:1 or 13:1, is what is causing the dollar price to be slightly lower.
The fare the site returned was MXN $225, which converts over to USD $17.23 at the time of this writing (which is notably a few days later than the price was quoted). The GDL->MEX trip price (not shown) was also MXN $225 (USD $17.23).
Continuing through the process, I found that the total price of both tickets, MXN $1958.92 was the sum of the MXN $450 fare (MXN $225 both ways), plus MXN $529.46 in taxes, times two.
Buying a "Mexican" Ticket on Mexicana
To put that into US Dollars at the time of this writing for comparison, that breaks down into a total of USD $149.99 for both tickets (USD $75 each), based on a fare of USD $34.46 each (USD $17.23 both ways) plus USD $40.54 each in taxes.
I started over again and selected the United States as the country of purchase. It brought up a fare of USD $22. Based on the standard 10:1 Mexican Pesos to US Dollars ratio, that was relatively close to what the fare was for the Mexican "Country of Purchase" tickets.
Buying a "United States" Ticket on Mexicana
The trip from GDL->MEX (not shown) was also USD $22.
Up to that point, it was looking the same, more or less. Continuing on however, the final results added up to something quite different.
Buying a "United States" Ticket on Mexicana
The fare was almost exactly the same at USD $44 for the round-trip fare per ticket (if still using the old 10:1 conversion ratio), but look at the taxes. Instead of the taxes charged for Mexican "Country of Purchase" ticket, which are MXN $529.46 (USD $40.54) per ticket, the taxes were USD $186.96 per ticket. That is a difference of USD $146.42 per ticket between the price paid by Mexican customers and those in the United States. Since we were buying two tickets, the total difference we were being asked to pay was USD $292.84 - almost USD $300 extra - just to pay with a credit card from the United States.
Fortunately, we could opt to pay instead at our local Sanborns instead of with a credit card, but customers who live in the US are not so lucky. Nor would be gringos who live in cities without Sanborns locations, although it is hard to think of any places that meet both of those conditions.
It is unclear why there is this difference in the tax amounts. It would seem, because the fares are comparable, that Mexicana is not ripping off Americans, but that the Mexican goverment is. It could be the case too that Mexican airports, which for the most part have all been privatized in the past decade, are charging additional fees for gringos, just because they want to. "Gringo tax" goes on a lot here, as does exploitation of foreign visitors in every country, it seems.
I am going to try and find out more about this tax difference, and as I do, I will report it here.
Posted by crispy at November 15, 2008 01:56 PM